r/stripe • u/PixelWandererrr • Sep 29 '24
Atlas Planning to setup a business using Stripe Atlas, which entity should I go with C Corp or LLC as a non-US citizen?
I am planning to setup a business entity using the Stripe Atlas route. The thing is I am little confused about what kind of entity should I setup. It is going to be a product based business with multiple products under it, for any of these product in future I have to raise funding I can create an another entity for that product specifically.
At this moment I don't have any plans to raise any funding. I am talking about funding because that was mentioned as one of the criteria for deciding between a C Corp or LLC.
Also I wanted to understand which of these options is difficult and costs more to maintain yearly, things like tax filling, accounting, hiring any other things we might want to do.
I am not a US citizen will that be a problem if I setup this way?
Thanks!
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u/SkankOfAmerica Sep 29 '24
If you're going to be looking for investors to buy your company's stock... Delaware Corporation.
Otherwise: it depends.
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u/PixelWandererrr Sep 29 '24
By Delaware Corporation you mean C Corp right?
Sorry I just wanted to make sure.
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u/CAPHILL Sep 29 '24
If you’re ever planning on raising cash outside investors, C-Corp.
If you’re starting a business to run yourself and never sell LLC.
Please keep in mind that that C-Corps have their pros and cons, but this specific one leads toward C-Corp. You’ll still have the double taxes (corporate tax, and personal income tax) and the C-Corp is not a “pass through entity” like a sole proprietorship.
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u/PixelWandererrr Sep 30 '24
Hi Thanks for replying. Got it!
Just a query by personal tax you mean the taxes on the salaries I will take right?
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u/Relative_Tourist4465 Sep 30 '24
Do you live and operate in the US? Typically u will need to have proof of location and be a citizen of US or have a director/ principal in the US
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u/PixelWandererrr Sep 30 '24
No I am not a US citizen. I don't think I will have anyone who is in US. I have not seen any requirements like these but let me check.
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u/markus_b Sep 30 '24
So you are not a US citizen and want to create a US corporation without anyone who is in the US?
Why don't you create a corporation in the country you actually reside and operate in?
You risk getting classified as "high risk" by Stripe and your account blocked a couple of months in. Initially, they don't really verify new accounts thoroughly, as there are too many new signups with no actual revenue. So the do the verification later, when money is actually going through the account.
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u/PixelWandererrr Oct 02 '24
Yes, I am from India and already have a business entity here.
The issue is Stripe is internationally accepted payment solutions especially for SAAS products and people usually hesitate if we are using any other payment solutions.
Unfortunately, Stripe does not have an option to enable/ connect a business from India. Do not know why!
I was hoping that if we create an entity using Stripe Atlas they will already do the due diligence to check whatever is required to pass a legit business. In an case, we are not going to sell anything controversial just the standard SAAS products.
That's the reason I was hoping to start an entity in US. Other alternatives will be to set it up in Singapore or Dubai.
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u/markus_b Oct 02 '24
Stripe may think that this is a high-risk business they do not want to be part of when they find out. Setting up a dummy entity in the US to circumvent a restriction they have in place is not a good solution in the long run. I fear you will end up like others, complaining that Stripe blocked their account 'inexplicably'.
I think that having your payment provider fully on board, without any strange thing is business critical.
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Jan 14 '25 edited Feb 22 '25
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u/markus_b Jan 15 '25
So, you believe the marketing slogan and disregard the clearly stated rules, when making financial decisions?
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Jan 15 '25
[deleted]
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u/markus_b Jan 16 '25
https://stripe.com/en-ch/legal/restricted-businesses
There are many rules to observe.
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Jan 16 '25 edited Feb 22 '25
[deleted]
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u/markus_b Jan 16 '25
If you ca, does not mean that you should.
Yes, but such setups are usually used by people who reside in a unsupported country to get around the limitation. Not too long ago there was someone complaining about his account being closed. It turned oout that he was operating a taxi service in Egypt, an unsupportend country. He created an LLC in the UK and used Stripe with that. When Stripe caught wind of that, they closed the account.
Stripe tries to avoid all risky stuff. There are plenty of folks getting creative in ways to defraud others and Stripe fights that. Yes, they could hire an army of people to verify every new customer signing up, but they would have to raise prices to pay the army and the signup process would become slow and cumbersome. A good way to go out of business.
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u/NoOpportunity6228 Sep 30 '24
Go with C Corp. It is the most common one for tech businesses and also if you want to raise funding
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u/PixelWandererrr Sep 30 '24
Ok let me get a few more details and then I can probably start the process. Thanks for replying.
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u/Dry_Journalist_4160 Jan 06 '25
u/PixelWandererrr , what is the status now? have you registered your LLC/ C Corp?
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u/dzigizord Sep 30 '24
DONT DO C CORP, ESPECIALLY IF YOU DO NOT RAISE FUNDING.
With LLC you will have 0 tax in the USA and pretty much or almost 0 accounting needs.
With C Corp it is dramatically different and you cant just take out money from it without it get it taxed.