HACKER Q&A
📣 lihaotan

Where should I incorporate my startup?


Delaware seems to be a common place for people to incorporate startups but I don't have understanding of the tradeoffs incorporating in different places.

My understanding of incorporating is that Delaware is great for:

- investment rounds

- no corporate tax if revenue is not generated in Delaware but there is a franchise tax (not sure how much?)

Context: We are receiving our first significant revenue the following month so we do need to incorporate, not sure what factors should influence our decision other than ease of getting funding and tax-efficiency?

We are based in Singapore.

I have did some research and the information I have so far at some great(?) places to incorporate are: United States, Canada, Singapore or the Cayman Islands

Ref:

https://www.ycombinator.com/faq

https://www.ycombinator.com/documents

  👤 pier25 Accepted Answer ✓
> We are based in Singapore

Why not Singapore?

I incorporated in Estonia via the e-residency program because I can manage my company 100% remotely from anywhere in the world. Since the activity is not happening in Estonia, the only tax is when distributing profits with a flat 20%. I pay an Estonian company about €150/month to do the accounting and other stuff.

I considered Delaware too but IIRC just hiring a US accountant was much more expensive. Didn't make sense for a Bootstrapped startup.

👤 ciaovietnam
Don't worry about the Deleware franchise tax, what you should be worried is the US federal corporate tax which is significantly higher than that of Singapore. Cayman Islands? Good luck finding a credit card processor to process your customer payments.
👤 asdadsdad
UK is great