Ultimate guide to incorporation with Stripe Atlas
Shared by thisisrajat · 15d ago · 18 comments

Hi Pioneers, we incorporated our company (Rapidr, Inc.) this May with Stripe Atlas as non-US residents. There were so many gotchas and catches. That's why we've documented all of our learnings.

Here's our end-to-end experience.

manojranaweera · 14d ago

Not sure you knew, but we can give 50% discount. However, you would need to subscribe to our service first https://www.skilledup.life/perks/

As a UK tech startup, we are looking at what we could do to help companies register in the UK, as a result of one Pioneer company inquiry. Also discussing about providing soft landing - address and a hot desk for 12 months.

Hopefully, we will be able to offer more.

thisisrajat · 14d ago

Wow, that sounds really fantastic.

manojranaweera · 14d ago

Sorry to steal your thread. But my mind has gone into overdrive of how the UK can compete with Stripe Atlas.

There's also a FinTech here that offers free company registration. I'm gonna speak to their CEO to see how them + https://skilledup.life + a few others can put together a package to compete with Stripe and provide an alternative.

This actually got me into more thinking of what SkilledUp Life could be. I have a suspicion we are in the game to disrupt "accelerators" and not just in the game of providing "free talent". I had a hunch of this at the beginning but it's beginning to make a lot more sense as each day go past.

Just to share another story. A long time ago Spotify was a tiny tech startup. There were few others who set up similar startups at the same time. None were standing out as the true leader then. One of them was We7 founded by Steve Purdham, who was part of the old Techcelerate.

And I remember Steve throwing a heavy book he had on the floor very loudly when discussing his business once. We all thought him, Spotify and others were in the music business. They weren't then. They were in the business of "advertising" and music was just the enabler. Unfortunately, they lost to Spotify and sold for about £10m to Tesco - the same amount as the level of investment they raised.

I wish I recorded this.

Even more apologies... Ever heard of Buffer? Whilst I can't prove it (didn't use Google Mail then), I believe I was the first to see Buffer. Here's their founder speaking about Buffer in June 2011. https://www.youtube.com/watch?v=dVCt0evSM_c&list=UUGdQ9ofFuB6v0wwGQq65Xfw&index=3

Got lot more stories to share ...

macOS · 14d ago

plus if you become a UK Startup endorsing body that would be even better. You should diversify Manoj!

manojranaweera · 13d ago

What's your startup Julie? And the URL?

manojranaweera · 14d ago

Too much hassle though - but who knows!

macOS · 15d ago

Hey Rajat, thanks for sharing your Stripe Atlas journey. It reminds me Girishs' Freshdesk blog post. Hopefully you'll become like them soon. I have lots of questions to ask if you don't mind.

- Do you have any ideas why Stripe does not form/support US LLC's for non-US residents/owners?

- Were you able to open a US PayPal account?

- How are you handling your taxes? How much does it cost you?

- How do you pay yourself? How does that work with you being an employee from a different jurisdiction?

AndyDent-Touchgram · 13d ago

Do you have any ideas why Stripe does not form/support US LLC's for non-US residents/owners?

Just guessing, based on some of my research.

Pretty sure that the pass-through and notification requirements around LLCs are onerous for them, with little advantage.

There are similar good reasons why VCs won't back LLCs - US tax law is horribly complicated and if you fall foul of some of their gotcha stuff it's hard and expensive to fix.

As VC money won't go to LLC, that's a lot of the market for them so combination of pain and lower demand led to them simplifying it out of their offerings.

kendsouza · 13d ago

It is primarily the tax reason. VC can be on the hook for taxes in a LLC not so in C-corp. They just want to own stock. On the other hand, LLC's are favorable to small businesses/startups..very easy/quicker to setup and no corporate governance or reporting requirements as it is in a c-corp. Also you can merge it with your personal tax return, instead of filing 2 tax returns every year. If you grow in revenue and realize you can save taxes as a corp, an LLC can file as a s-corp without changing anything. Best of both worlds:)

thisisrajat · 13d ago

Right! Apart from the VC angle, nothing makes sense, since there are couple of startups that let you open LLC from abroad.

AndyDent-Touchgram · 13d ago

Just because someone else thinks that offering this service is worthwhile, doesn't imply Stripe should.

The other startups may be willing to take organisational risks that Stripe cannot.

Or, it just may be a lot of ongoing bureaucratic hassle which smaller companies think is worth as a marketing exercise but Stripe no longer need to bother with.

It is quite common for companies to drop minor product lines as they grow.

thisisrajat · 14d ago

Hey! We're just a tiny speck right now. Haha.

To answer your questions:

1. I don't know but they used to support LLCs for non-US residents. There are a couple of other startups like Firstbase, etc. which do allow LLC incorporation.

2. We didn't open a PayPal account yet, though I presume it'll be simple and straightforward.

3. Yet to complete our first year so I don't know much about the operating costs, but here's what I know: 21% federal income tax on profits, $300-$350 Delaware franchise tax, $100 registered agent.

4. Haven't taken a dime out of the business yet. We use the company debit card to pay for services, etc. In the near future when we do decide to hire ourselves, we'd use a service like Remote.com, Deel, Pilot.co etc.

I hope it's helpful.

kendsouza · 14d ago

I don't think it is up to Stripe Atlas or Firstbase to determine whether you can register as a LLC or Corporation in any state in the US as a non resident. You can go to each state's website and just fill in their forms as a foreign entity. Just pay their filing fee ..much cheaper or even free. Applying for a EIN is also extremely easy and free. Stripe Atlas just fills the forms on your behalf.
Stripe Atlas is laughing all the way to the bank with your $500 and Delaware too(annual tax costs) :)

thisisrajat · 13d ago

Yup, it's painful when you can do the same for a dime instead of paying dollars but it's the similar paradox: we'd have to understand a lot more things and get our hands dirty. Stripe is a business and they're not doing charity so it makes sense to earn from this transaction.

kendsouza · 13d ago

Yep.. Stripe is a business..they are not looking out for u:)
If you had done it on your own, you would have understood the process which at some point you would have to if you want to do business in the US. The Delaware corp thing is not meant for small businesses or startups. Nevada or Wyoming would be much better. Either Stripe does not comprehend the model they are selling or they are just preying on the gullibility of the foreign clients and the lure of VC funding. I believe it is the former or they are trying to hook folks in their payment processing business.
A lot of these small businesses end up dissolving the c-corp in a few years as they realize the cost,tax implications and the year end formalities.
I would advice folks to register as a Delaware corp, only if a investment opportunity comes around and the investor insists on it or you are absolutely sure you are going to become a unicorn:)

macOS · 14d ago

Thanks, Rajat! That was helpful.

thisisrajat · 13d ago

Glad to be of help!