We're happy Stripe customers, but our Stripe account is based in an EU country, and our entire volume is in USD. For some Stripe policy reason, we can't transfer USD from Stripe to our EU bank account, it's not allowed. You can only transfer USD to US or Canadian bank accounts.

We've been in contact with Stripe support over this, and their recommended solution was to use Atlas and setup a US company and bank account, but that's the wrong solution for us. We already have a company which we're happy about, we don't want to become a multi-national entity with all the liability that follows.

So, question: Are you actively going to push Atlas as the solution to our problem as well? It seems completely misguided to me, we just want to be able to transfer the USD held in our Stripe account to our EU-based USD bank account, and not do any currency conversions at all.

You should try Adyen https://www.adyen.com/

It's an European company and it's the main competitor to Stripe on our continent. They are actually a bit older and ten times bigger than Stripe, however they don't advertise much.

Disclaimer: I am NOT affiliated with any of these providers.

Adyen does not work with startups.

I contacted their sales and they slammed the door shut immediately. They were actually quite rude and the tone was like an automated email.

Their wording was they only wanted to work with LARGE companies which already processed LARGE volumes.

Unless someone from Adyen wants to clarify?

Their pricing page says: "The minimum charge is 1,000 transactions a month, so the transaction cost will be at least €100 a month."

Doesn't look startup friendly at all.

True. Unfortunately, what their website says and what their sales staff say on email are completely different things.

Can't edit my comment.

For US company holders, adyen is totally out.

"Adyen being a European based acquirer has set the requirement of at least 50% of the transaction volume to be European based."

"This is a rule set forth in order to comply with card schemes such as Visa and MasterCard."

From their sales.

------

Honestly, talking to their sales was like pulling teeth.

I couldn't get anyone on the phone and neither would they call me. What would have taken a 5 minute call to go through the details. Turned out to be an all day event through email. /facepalm.

We used Adyen for a German-based startup about five years ago. I don't remember it being that difficult back then, but I just handled code. Our biz guys handled the account stuff. For what it's worth, they were both a little profligate and good at telling a big tale, so it may not have been an affordable or easy option back then either.

I'm going to look into this for you and will follow up by email. (If I find something which is useful for similarly situated companies, I will post what I learn here.)

Thanks!

I actually got a great response from the Stripe customer support team today where they said that it's not possible today because of your banking partner in Europe, but that you're working on it, and hope to have it done later this year.

So that's great news for us! :-)

two thumbs up if something can be done to improve this that makes my complicated solution below superfluous

What you're describing isn't unique to Stripe. Pretty much every payment processor works this way. I've looked into a lot of them have yet to find a mainstream one that will deposit USD to a USD account in Europe, HK, SG, etc. (If Adyen does specifically that without big fees then great, but it's news to me.)

What Stripe support is really telling you is that you need a US bank account to avoid the exchange fees. This is more or less correct. As you say, though, they're misguided is in pushing Atlas. It's probably the simplest way for you to get a US bank account, but in many ways it's the worst long-term option. That's because Stripe Atlas creates a C-Corp, which is liable for US corporation taxes and has to file them every year.

You have two other options: 1) Get a US Bank account for your foreign company directly. This is not easy, many banks won't do it, but some will. E.g. I have a SVB account for a foreign corporation (with an EIN) so I can use Stripe in the US for my subscription app.

2) Form a US LLC that's fully owned by your EU corp. A single member LLC can elect to be tax transparent in the US. That means you don't have to pay US corporate taxes as long as you don't have business operations (employees, basically) in the US. With a US LLC it's relatively easy to open a US bank account, though you may need to travel to the US. If you want some expert tax advice for the US component of this setup here's a good guy to ask: http://ustax.bz/

Once you have a US bank account sorted you may need to migrate your Stripe subscriptions. This is not something that Stripe officially supports or will do for you, but after lots of digging with their support I was told that it's possible to do without requiring any re-opt-in from your subscribers. It's just that you need to do the migration yourself by transferring the subscription data. (Details escape me. Please confirm this with them yourself.)

What's the benefit of all this, other than adding a few percent to your gross profits? Well, the market for online business buyers is much stronger in the US than anywhere else. I'm betting on the fact that it'll be significantly easier to sell a business with a US Stripe account than a business with a German / Irish / Hong Kong / Singapore / whatever stripe account.

Of course we're talking a few percent here and a few percent here. Before diving into this rabbit hole I would ask yourself if marketing & sales for a few percent increase might not be less effort than all of the above.

Right, that was a bit long-winded. I don't monitor my replies here much, but feel free to ping me if you have questions.

public @ my_hn_username . org

Thanks for the writeup, but we think that any US presence for the company presents unknown liabilities that simply aren't worth it at our size. The risk simply does not outweigh the potential savings of the few percent we lose in exchange fees.

I know other payment processors don't do this either, and I remember the bad old days when you had to have your own merchant account and separate agreements with the card companies, and I wouldn't have expected this flexibility back then.

But, the way Stripe presents itself to its customers is that payments are made in whatever currency of the user, and it all drops in a bucket over at Stripe. You can accept payments before you've setup a bank account with Stripe. After that, and unrelated to whatever currencies users paid in, you can then transfer your Stripe balance to your bank account, in a few select major currencies. It looks like those two activities are completely separate, and one would assume the normal rules for transfers from one bank account to another would apply, i.e. it can be done in any currency regardless of the nationality of the bank accounts. But apparently that's not the case.

To clarify, you managed to sign up for a US stripe account with a foreign corporation?

That's an interesting approach. Thanks for sharing.

Yep. The Stripe account isn't the hard part. All you need is a US Address (sorta) and an EIN (I think). You can go for a while without adding either to your account. The US bank account is the hard part, because they have some serious KYC checks, and most banks simply don't do it at all.

I managed to get it via SVB - just applied on their website. I originally spoke to them with the intention of doing it for a US LLC as described above.

It turns out that they were happy to open an account for the foreign corp directly without a US entity underneath. To qualify I had to demonstrate that we were potentially high growth and would be seeking accelerator / angel / VC investment at some point. (Would they fire you if you didn't end up doing that? Perhaps not.)

The monthly fees for this arrangement jump to a couple hundred $ per month maintenance after 2 years. Not sure if their deal with Atlas is different on that front.

Hello Patrick, thanks for answering questions.

From the looks of these most recent updates, and reading over this blog post, it seems as though Atlas is positioning itself to be an accelerator in its own right. Offering connections, assistance, setup help, guidance, and even access to investors. It seems like Atlas/Stripe is only missing a funding portion and perhaps access to a highly covered "demo day." Are those in the pipeline as well? If not, can you elaborate on what the end goal is here besides simply altruism? Is it just to get new companies in the Stripe pipeline faster?

Stripe's goal is to increase the GDP of the Internet. We're doing Atlas because we think it is instrumentally useful to achieving that. This isn't purely altruistic; we're increasing the GDP of the Internet both because it is a good thing to do and because we intend to capture a sliver of the value unlocked during this economic transformation.

In terms of what we'll build into Atlas: absolutely anything that is needed by ambitious technically-oriented companies, with a particular focus on things that we feel we have a comparative advantage in shipping. Sometimes we'll be building things ourselves, sometimes we'll be partnering with folks who have part of the puzzle already.

I appreciate how honest your reply was and how pure Atlas is in spirit. I am grateful I am part of the Beta because my personal GDP is too low to afford all the services provided by Atlas.

Cheers mate!

Do you have some sort of guide or FAQ which can give potential clients a guide as to the possible extra costs involved for internationals, like typical accountants and lawyers fees?

I've been interested in Atlas in the past, but the potential financial unknowns can be... intimidating.

For instance, how would this compare to opening a company in Hong Kong?

The TCO of a company depends heavily on your situation, which is one reason we find it difficult to have an official answer on that.

As a single data point, my personal tax situation involved US LLCs last year, as an American living in Japan. I spent about ~$10k on accountants to file taxes in both countries plus bookkeeping services. That's towards the high end among my friends; that's nowhere near the high end for "total amount spent on accountants in a year." For comparison, Atlas would have introduced me to an accounting firm offering the US side of that for ~20% of what I ended up spending on it. (This is difficult to do an apples-to-apples comparison even in this case, because C Corp vs LLC, but trust me when I say "I was pleasantly surprised where we got the numbers to.")

We're working on having an even better offering here for next year. We'll have more to say that closer to tax season 2017.

Where are you from? Have you answered the following questions?

a) What is my foreign affiliate reporting requirements? For a Canadian, you must file a T1134 annually. The T1134 for a controlled foreign affiliate (where you exercise control) is very onerous. It is not that bad for a non-controlled foreign affiliate.

b) What is my foreign affiliate taxation requirements, in that foreign jurisdiction? This is an answer that must come from Atlas I guess. But for a foreigner owning a US LLC, where the US LLC will be controlled from a country with which the US has a tax treaty, we get into many complexities.

c) Will I have an income pickup from active business income from owning a foreign affiliate? For Canada, this is a "no."

d) Will I have an income pickup from passive income earned in a foreign affiliate? For Canada, this is a "yes." Canadians should never earn rental income, royalty income, or other such passive income in a US LLC, for example.

e) How will I deal with the "place of central management and control?" Many countries deem a corporation to be resident in that country if you habitually exercise management and control from that country. For example, a Canadian that owns a US LLC will result in the following:

- US LLC is a tax resident of the US by virtue of incorporation, and must file a tax return to report earnings from the USA (no flow through). As the LLC will be a resident of Canada as well (see below), branch profits tax of 30% may apply (IRS 884).

- US LLC is a tax resident of Canada by virtue of being controlled, "mind and management," from Canada by a Canadian, and must therefore file a Canadian corporate tax return.

The situation is different for Canadians owning "C" corporations. However, it brings its own complexities and nuances. The reporting requirements are challenging.

For those seeking to own a foreign company, research your own reporting and disclosure requirements carefully.

Do you plan to offer incorporation in other business friendly countries - say singapore?

That would be very interesting because it would remove all risk for the founders of being considered "US persons", which has unexpected and unpleasant consequences such as not being accepted as a client by many non-US banks or financial services.

It is not clear to me at the moment if incorporating currently through Atlas makes a foreign, non-US resident founder into a US person, or not.

Have you considered http://startupr.com?

I am not affiliated with them, but are using them currently and they are providing great service.

Startupr looks nice but it doesn't seem to come with a bank account. Last time I've heard it's hard to get a bank account for a company abroad.

KYC rules require you appear in front of the bank officer to open a bank account. If you are going to spend money on opening a company, and are prepared to pay the annual maintenance costs going along with financial statements, tax returns, and other reporting, you should be prepared to travel somewhere and open a bank account. Running a company is NOT cheap.

I know that, yes. But it seems that Atlas somehow don't require you to travel to the US for KYC.

When might the LLC track be ready? I'm looking forward to that. Thanks.

We ship first and then announce dates because down the other path lies disaster, but LLCs are a great way to incorporate many tech businesses, and Atlas aims to incorporate most tech businesses.

Does this mean you're also hoping to expand into Delaware PBCs, too? Lots of open source projects are considering this approach due to a combination of poor response to open source nonprofits from the IRS and flexibility in figuring out their funding sources. There's only trivial differences to a C Corp in terms of filing.

I'd been planning to reach out to Stripe about this when it made sense; I probably should've just emailed you! We're advising folks we're bringing onto our Stripe Connect platform as managed accounts to go use Stripe Atlas where possible, but plenty have voiced support for having B Corps be part of that happy path.

Honestly, I might even just pay a lawyer at some point to open up some standardized set of docs for this.

Do you hope to have any way for Connect platforms with managed accounts to more directly refer people into Atlas? Having an API for the application process would be amazing.

I would also like to see Atlas expand to include B Corps.

+1 for Stripe Atlas support for Delaware PBCs

No offense but outside of our little HN/YC bubble I think it's the other way around. LLCs seem far more common than Delaware based C Corps for tech companies. For tech startups looking to raise venture capital (a subset of tech companies) a Delaware C Corp is far more common though.

I have a California LLC (sole prop) which is a disregarded entity for tax purposes. LLC is perfect if:

  a) you don't plan on raising investor capital
  b) are a single founder, who just wants liability and corporate benefits and protections
  c) want to easily pass money from the business to personal

Do be aware there is a flat $800 a year California LLC fee even if you don't make a cent (which is unfair and anti-small business), but is what it is.

FYI the $800 fee is forfeited during the LLC's first year of operation. BUT it's based on calendar year IIRC, so if you're penny-pinching, it may be worth waiting until January to file the paperwork. That way you get all 12 months' worth!

Aren't LLC's problematic for offering employee equity options?

I've done lots of startups, and you want a structure that makes it easy to put together employee pools, easy to raise funding with, and easy to sell/merge.

LLCs are easy to setup, but if they create lots of problems down the road it's not a structure you want.

LLCs are a swim army knife. You can basically do anything, with way less rules and fees.

LLCs can totally offer equity. LLC's are easier to sell than a C corp. Plenty of pluses. If you don't want to get VC funded, you should default to LLC.

Of course LLCs can offer employees equity. But it's not simple, and it's not easy.

And its not just VC funding, you should be wary of LLCs if you think it's likely you will need any kind of investors, as typically investors prefer not want to deal with partnership K1s.

If your startup is intended to be profitable quickly, and plans to distribute those profits to the founders, an LLC offers significant tax advantages. If you want to build a big business, it can offer some significant limitations.

> And its not just VC funding

Sure, I do not know many people getting non-VC funding, but I guess if that exists for you, you can consider it..

> If you want to build a big business, it can offer some significant limitations.

Not sure that is really true. There are some HUGE LLCs. Say, Koch or Cargil.

https://www.forbes.com/largest-private-companies/list/

Again, LLC is a great fit if you have a profitable business and want profits can be paid as tax efficiently as possible to you and your other founders. You'll never need investors, you'll be able to borrow money because of your great cash flows, etc. And once in a while one grows to the moon while staying private and never go public.

But for most startups, you can't know if you'll need to raise funding. And funding isn't just VCs. It's angels. It's friends and family. It's even crowd-funding now that you can crowdfund equity. And maybe you even get the opportunity to go public and want to be the most public market friendly cap structure.

I have a friend whose e-commerce startup just broke over $100k per month in revenue. He's an LLC, but he's starting to realize that he doesn't have enough positive cash flow to pay for the equipment needed to lower his product costs, so now he's thinking of finding investors. And he needs a simple, easy to create equity program with vesting for key employees. And since he has no plans to be profitable soon, he's moving to a C corp.

A C-Corp is $500. It's not expensive and is the most flexible foundation to build a startup business on.

I'm also biased against LLCs because a problem endemic with LLCs which isn't necessary a fault of LLCs is that it's so easy to just start and go. I see founders who never consider vesting as a requirement. Four founders start an LLC and agree to each getting 25% equity split. Then one quits after a month and the remaining three have a big liability issue if they try to squeeze the quitter out.

A C corp usually leads to a professional cap structure where founders are forced to think through these issues a little better.

The biggest problems I've seen for a startup going the LLCs route is negative tax consequences of reinvesting profits, and missing out on the first $10 million of Federal tax-free capital gains.

The fact that LLCs are indeed a 'swiss army knife' IMO also works against them. The LLC agreements tend to be bespoke documents which are far too "crafty" for my liking. I like straightforward cap tables with clearly defined rights and preferences and ISO options, whereas LLCs tend to reinvent the wheel and end up with opaque capital structures which require costly legal work to implement.

So it seems Stripe Atlas was set with highly-funded startups in mind.

Exactly the kind of startup that is not actually in need of Stripe Atlas.

I'd just like to echo the sentiment that it would be fantastic if Atlas supported LLCs. Hope it comes around soon!

I setup my company through Atlas, and overall I really liked the process.

My only pain point was, "why silicon valley bank"? They have high fees, is a pain to set up and manage, and it's basically the opposite of what I think of as a good experience.

As some people said in another comment thread, Capital One Spark is great. I'm actually going to switch to them as soon as I have time.

I do work for Capital One in my day job (for now), so if you want / need a contact I can provide one. I do realize they don't support foreign teams, but honestly anything is better than SVB.

I really love what Atlas is doing, but I too would love to see a LLC option because I never intend on raising capital. My two cents.