Opening a Delaware Corporation: an Incorporation Guide for Foreigners

http://myeverwrite.com/opening-a-delaware-corporation-an-incorporation-guide-for-foreigners/

by diegogomes • 15 years ago

68 42 15 years ago

myeverwrite.com

bernardoporto• 15 years ago

Very interesting! ;)

AmaralHerberth• 15 years ago

Tks a lot :)

lucianot2• 15 years ago

This is really helpful. Thanks for the post.

kennethologist• 15 years ago

Thank you for sharing! I've been researching this for quite some time and now I finally know how to do this. The StartupLawyer mentioned in the article should be releasing articles and guides like this!

diegogomes9• 15 years ago

Glad you liked! He is, have you seen his bloig startuplawyer.com? Helped us a lot!

mateusbicalho• 15 years ago

Thanks! Very useful :)

kseudo2• 15 years ago

On a similar vain we are thinking of incorporating in the US but we will also need a bank account there. Anyone know what the procedure/requirements would be for this?

diegogomes9• 15 years ago

On the next post we will publish about opening a bank account. We chose Silicon Valley Bank. Great entrepreneur support there.

kseudo2• 15 years ago

Cool... Im looking forward to reading it already, great work.

sanswork• 15 years ago

I did this in June. I'm from Canada and my partners are Australian so for us it was a bit easier. I took all the incorporation documents and my personal identification and drove across the border to open our accounts. The process was straightforward and simple and the business manager at the bank knew how to handle it. That said I think its easier for Canadians than people from other countries.

ajg1977• 15 years ago

You need a corporate resolution authorizing you to perform financial actions on behalf of the company, and this needs signed by officers of the company (which may also be you) and stamped with the company seal. There are plenty of examples online.

Take this, along with copies of your articles of incorporation and government issued photo id, to a bank of your choice and you're all set. To speed things up you may want to call ahead and make an appointment with whoever deals with new business accounts at the branch.

eusouomatt• 15 years ago

tks for sharing it, truly helpful!

jpresende• 15 years ago

Awesome guide! Will definitely help us in the future. Thanks!

alexpogosyan• 15 years ago

Thanks for sharing. As far as I know there is no double tax treaty between Brazil and the US. Does this mean you will have to pay income tax twice?

Also very interested to know how did you get a US bank account. As far as I know it is not possible to do it remotely since Patriot Act has been passed.

diegogomes9• 15 years ago

Since we're not in the U.S. (yet) we do not need to pay taxes twice. We work from brazil as contractors to our U.S. company. So the company pays taxes in the U.S. and the individuals pay income taxes in Brazil.

samdalton• 15 years ago

I managed to set one up last week with Wells Fargo. They wouldn't set up a credit account without a SSN, but I have check and savings. Granted, it was because I'm moving there next week, but the process only took an hour, and a few scanned documents.

diegogomes9• 15 years ago

In our case we have a board member that lives in the U.S. and helped us with the U.S. address. We also have a virtualpostmail address for mailing purposes only.

justincormack3• 15 years ago

The US doesnt have any double tax treaties. If you are Brazil resident, but have US income you may well be double taxed if you are employed in the US. If you are not Brazil resident then Brazil wont tax you. Only the US taxes non resident citizens I think.

jrmg• 15 years ago

The US doesnt have any double tax treaties.

That's not true. http://www.irs.gov/pub/irs-trty/

lucasarruda• 15 years ago

Very nice post! Thanks for sharing all the process and info.

cmer• 15 years ago

I wrote this for Canadian startups wanting to incorporate in the US, but it applies to most countries AFAIK. http://blog.carlmercier.com/2011/08/29/us-incorporation-for-...

chaostheory4• 15 years ago

Going on a tangent, what are the primary reasons people incorporate in Delaware as opposed to say Nevada or Wyoming? Is it mainly because more lawyers nationwide are more familiar with Delaware laws?

justincormack3• 15 years ago

No its about trying to pay less tax. It will cost more in fees etc.

chaostheory4• 15 years ago

If I understood you correctly, I don't believe either Nevada or Wyoming have state income tax. Though in the case of Nevada, given its state deficit, this may or may not change in the future.

jpdoctor3• 15 years ago

Delaware law is very favorable to the corp.

As an aside: Nevada used to be a big flag to the IRS, since it was one of the few states (the only?) that did not data share with the feds.

chaostheory4• 15 years ago

I agree with the Nevada statement.

diegogomes9• 15 years ago

check this out! -> http://news.ycombinator.com/item?id=2997975

chaostheory4• 15 years ago

good link: about the only things I disagree with are points 4 and 5.

1) I could be wrong but I believe Delaware is more expensive in fees compared to either Nevada and Wyoming.

2) It's not that hard to find corporate officer names in either Delaware or Nevada. I feel that this point is false.

tzs• 15 years ago

Note that the company being written about in the article is not based in the US, so their situation is different from that of most people incorporating a US company.

For most small companies in the US, the number one reason they pick Delaware is simple: fashion. They see that's where a lot of big companies incorporate, so they want to be there too. For the vast majority of businesses there is no real advantage over incorporating in their own state, and the latter is usually more convenient and often cheaper.

Delaware has some very favorable laws for banks, which is a big reason they are often there. They also have a court system that handles corporate matters in separate equity courts instead of through the regular jury-based courts. This streamlines complex litigation and gets you judges experiences in such matters. This can be a real advantage if you are the kind of company that is expecting complicated issues relating to shareholders or corporate governance, which is why many large public companies incorporate there.

Some prominent examples of big public companies NOT incorporated in Delaware are Apple (California) and Microsoft (Washington). (Microsoft has bounced around--they incorporated in Washington in 1981, then reincorporated in Delaware in 1986 and then reincorporated back in Washington in 1993 where they have stayed).

Nevada is popular for many small companies because it has good protections on privacy if you want to keep your name out of the public record associated with your company.

squeed• 15 years ago

Delaware is a the most common place for incorporation mostly because they have by far the most legal precedent. This reduces legal uncertainties. This also means that, in general, corporate lawyers are familiar with Delaware codes w.r.t. incorporation.

jpdoctor3• 15 years ago

Note: $2K is about $750 too high. (Hell, I think the whole thing is way high for what is a cut and paste exercise to a junior lawyer. I think this industry is ripe for a startup to make a boilerplate, perhaps open-source.)

diegogomes9• 15 years ago

I don't think so. The lawyer helped us a lot with incorporation, TOS, Stock options, so we spent U$2k. This is not directly related to incorporation, but we did some of this stuff in the same pack. Will clarify on the next post.

jpdoctor3• 15 years ago

> The lawyer helped us a lot with incorporation, TOS, Stock options,

I was guessing that's true; it's pretty standard for a lot of people.

bgrossi• 15 years ago

Great! Thanks for sharing...

markmccraw2• 15 years ago

It seems that this post may have been artificially upvoted by the author of this post.

The oldest comments are all at the bottom and are short, trivial and grayed out comments. One of those comments appears to be legit and another appears to be from a fellow Brazilian entrepreneur. However the rest are suspect.

The submitter/author of the post created his account 23 days ago.

The following accounts were all created 22 and 23 days ago and have only commented on everwrite related posts.

http://news.ycombinator.com/user?id=mateusbicalho http://news.ycombinator.com/user?id=bgrossi http://news.ycombinator.com/user?id=lucasarruda

These accounts were created shortly after this was submitted and have only posted on this submission with the same short, positive comments.

http://news.ycombinator.com/user?id=jpresende http://news.ycombinator.com/user?id=eusouomatt

These all do have real name formats, so perhaps these are all employees of everwrite and were asked to come vote this up? I'm not sure what the official rules are here, but it certainly leaves a bad taste in the mouth to send five associates here to vote this up and comment on the article in the early stages of the post, where five upvotes likely makes a large difference. And if it's straight up sock puppeting, it's simply unacceptable.

EDIT: I take back that one of the early comments seems legit, this account http://news.ycombinator.com/user?id=lucianot is also associated with everwrite in some way. http://twitter.com/#!/lucianot/status/114152173767639042

I hate to be the one who makes the drama, but the whole thing seems disingenuous to make all these fluff comments without disclosure and is not beneficial for the community. Imagine if a company with 2000 employees sent an army this way!

bobds• 15 years ago

Going to all this trouble to create accounts and upvote, then making empty blogspam-like comments... seems like a waste.

diegogomes9• 15 years ago

We shared the post with some friends, that's for sure. But everybody seems to have liked it. ain't that a good post? We thought that by writing about our incorporation adventures we would be giving back to the community. Sorry if you didn't like it, unfortunately we can't please everybody.

markmccraw2• 15 years ago

The quality of the article is not the issue. It's just that if everyone behaved the way you did, HN would merely be a contest of who can call in the most favors/have the most accounts under their control.

lucianot2• 15 years ago

If you feel that friends shouldn't upvote a post, fine. That's your opinion of how the community should work and you are entitled to it.

But don't accuse people of "sock puppeting" unless you have all the facts. Sock puppeting implies creating faking accounts, which is not the case and this should be easy for the admins to verify. Also, stating that they used employees to upvote is pathetic, because they have no employees!

The truth is much simpler: OP wrote a blog post about his experience, posted it on HN and shared the link with his network of friends/acquaintances (myself included). I enjoyed the post, upvoted and wrote a positive comment. Period.

What is wrong with that?? I am a real user (746 days old account) and legitimately thought the post was well written and very helpful for other starting entrepreneurs. It seems many other people also found this to be the case, as there were several links to the post in the local media, not to mention dozens of comments on the original blog. (Sock puppets too??)

In the future, I will disclose even a remote relation to an OP when I write a comment, just to be safe. But, please, don't go around making accusations based on loose facts and general suspicions. Witch-hunting is just as harmful to HN.

diegogomes9• 15 years ago

Check out the second episode of this series here: http://news.ycombinator.com/item?id=3018620

Opening a Delaware Corporation: an Incorporation Guide for Foreigners

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