Company Creation Questions

What documents do I need?

In order to create your company, you will need to fill out our online application and provide more information about yourself and your company.

The only other item you'll need to provide is a picture of your passport for identity verification with our partner bank..

How long will it take to file?

It depends on the country you choose. Creation usually lasts from 3 days to 40 days.

What banking service do you use?

It again depends on the country you have chosen, we work with several natural and online banks such as

Unicredit

Postbank

Eurobank

Mercury Bank

N26

Revolut

Societe Generale

Why do I have to pay annually?

Other companies might offer a one-time payment today but charge you later for fees to keep your business compliant. If you don't pay the fees, your business may fall out of compliance with the state and you'll be charged hefty penalty fees. We want to help you avoid that. That's why with us, your annual payment goes toward your registered agent service, maintaining your company address, and filing any required documents for your company to keep it current throughout the year so you don't have to worry about legal paperwork. Our goal here is to help you avoid dealing with any of the paperwork or headaches of maintaining compliance so you can focus on what you do best: your business.

Why do I have to pay annually?

Other companies might offer a one-time payment today but charge you later for fees to keep your business compliant. If you don't pay the fees, your business may fall out of compliance with the state and you'll be charged hefty penalty fees. We want to help you avoid that. That's why with us, your annual payment goes toward your registered agent service, maintaining your company address, and filing any required documents for your company to keep it current throughout the year so you don't have to worry about legal paperwork. Our goal here is to help you avoid dealing with any of the paperwork or headaches of maintaining compliance so you can focus on what you do best: your business.

Do I need to visit the USA or Bulgaria or Greece or another country to open a bank account?

It depends is the answer! We handle everything remotely but...

in some countries like Bulgaria if you don't want to travel to open a bank account then you need to authorize us.

This means that there is an extra cost.

Do you help with taxes?

Of course, we work with our partners to make your way easy to file your taxes. 

Do you help with taxes?

Of course, we work with our partners to make your way easy to file your taxes. 

If you have any questions about the process, please contact us at the help center here.

Which Entity Type to Choose?

When starting a new business, one of the first decisions to be made is deciding which legal structure your company should take. You have 4 basic entity choices:

1. LLC

2. C Corporation

3. S Corporation (U.S Residents ONLY)

4. NonProfit

LLC:

A Limited Liability Company (LLC) can be best described as a hybrid between a corporation and a partnership. It provides easy management and “pass-through” taxation (profits and losses are added to the owner(s) personal tax returns) like a Sole Proprietorship/Partnership, with the liability protection of a Corporation. It’s a relatively new form of business created in 1977 in Wyoming and now recognized in all 50 States and D.C.

Like a corporation, it is a separate legal entity; unlike a corporation, there is no stock and there are fewer formalities. The owners of an LLC are called “Members” instead of “Shareholders”. So in essence, it’s like a corporation, with less complicated taxation and stock formalities.

PROS: Provides the liability protection of a corporation without the corporate formalities (Board meetings, Shareholder meetings, minutes, etc.) and extra levels of management (Shareholders, Directors, Officers). Taxed the same as a sole proprietorship (1 Member LLC) or a partnership (2 or more Members).

CONS: Usually more expensive to form than a DBA, requires more paperwork and formal behavior.

Insight: 70% + of our customers choose LLCs as their entity types. (Why?: Liability protection without the corporate formalities; easy management and maintenance; simple taxation.)

 

C Corporation:

A corporation is a separate legal entity that can shield the owners from personal liability and company debt. As a separate entity, it can buy real estate, enter into contracts, sue, and be sued completely separately from its owners. Also, money can be raised easier via the sale of stock; its ownership can be transferred via the transfer of stock; the duration of the corporation is perpetual (the business can continue regardless of ownership); and the tax advantages can be considerable (i.e. you are able to deduct many business expenses, healthcare programs, etc. that other legal entities are not). Income is reported completely separately via a tax return for the corporation.

A corporation is set up in this structure:

  1. Shareholders own the stock of the corporation.

  2. Shareholders elect Directors (known as the “Board of Directors”).

  3. Directors appoint Officers (President, Secretary, Treasurer, etc.).

  4. Officers run the company (day-to-day operations).

In many cases (especially during the startup phase), you will be the 100% owner of the stock, therefore you elect the directors (usually yourself) and then appoint yourself as an officer (or all the officers: CEO, Treasurer, Secretary).

PROS: The oldest, most successful, and most prestigious type of business entity; provides personal liability protection; conveys permanence, can reduce taxes (lower tax rate on retained profits, items like healthcare, travel, and entertainment are deductible).

CONS: More expensive to set up than a DBA; more paperwork and formality required than an LLC (holding Shareholder/Board meetings, keeping minutes and resolutions).

Insight: Our clients mainly choose the corporate entity to set up their business for future investment or issue shares (most investors require a corporation before funding). Maintenance and compliance costs can be high, but the tax benefits are also available.

 

S Corporation (U.S Residents Only):

After a corporation has been formed, it may elect “S-Corporation Status” by adopting an appropriate resolution and completing and submitting a form to the Internal Revenue Service (some states require their own version). Once this filing is complete, the corporation is taxed like a partnership or sole proprietorship rather than a corporation. Thus, the income is “passed-through” to the shareholders for purposes of computing tax returns.

Most new small corporations elect S-Corporation Status (90%+) so profits and losses can be added to the shareholders’ personal tax returns without having to pay taxes on profits once, then again when they are given back to the shareholders as income (dividends). This is known as “double taxation” and is the reason why S-Corporations were created. An S-Corporation can also revert back to regular Corporation status fairly easily.

There are some limitations on S-Corporations: they cannot deduct some expenses like health insurance, travel, entertainment, etc. that normal corporation can. Also, they are restricted to 100 shareholders or fewer and those shareholders must be U.S. Citizens. Finally, S-Corporations may not own or be owned by other business entities.

PROS: Prestige of the corporation without double taxation. Ideal for “1 person corporations”.

CONS: More expensive to set up than a DBA; more paperwork and formality required than an LLC (holding Shareholder/Board meetings, keeping minutes and resolutions).

Insight: Though taxed in a similar manner to LLC’s, it ll requires the corporate formalities of a regular corporation (holding Board meetings, keeping minutes and resolutions).

*If you'd like to start a NonProfit, please contact us and we'll navigate you through the process.

What do most of our clients choose?

  • 80% of our clients choose the LLC.

    (Why?: Liability protection without the corporate formalities; easy management and maintenance; simple taxation.)

  • 10% of our clients choose the S-Corporation (U.S Residents ONLY).

    (Why?: Prestige and flexibility of the Corporation without double taxation.)

  • 5% of our clients choose the Regular Corporation.

  • 5% of our clients choose to file a DBA.

What State Should I Choose?

One of the unique features of incorporating or forming an LLC is that you do not necessarily have to form the company in the State where you do business. When deciding on which state to incorporate in, there are basically 2 choices:

  1. Your Home State

  2. Delaware, Nevada or Wyoming

For Non-US Residents, we highly recommend Delaware or Wyoming depending on your needs. Read about those in the corresponding sections below.

1. Your Home State

For the majority of small businesses, incorporating or forming an LLC in your home state is usually the easiest and least expensive option. This is because virtually every state has laws that require you to “re-register” a Delaware or Nevada company in the state where it is actually doing business. You need to re-register only if you have a physical presence such as opening an office, store, or warehouse in that State.

For example, if you form a Delaware corporation but your physical business is located in Colorado, the state of Colorado will want you to “re-register” as what’s called a “foreign corporation” (a company that was not originally incorporated in Colorado). This is especially true if you intend to get a physical bank account and business license or rent office space in your home state or in this example, Colorado.

In most cases, registering as a “foreign corporation” or LLC will subject you to all the same taxes and fees as an in-state company. So you will probably have not avoided any taxes or fees, plus there is the added expense of registering as a “foreign corporation” in your home state and any annual fees in both states.

This is not to say there are not valid reasons for choosing another State, we just like our potential clients to be aware of the additional steps required when choosing a State outside of their home State.

2. Delaware, Nevada, or Wyoming

 

Delaware

Delaware is where most large corporations (Fortune 500, Nasdaq, etc.) are incorporated. The reason for this is that Delaware’s body of law is more business-oriented and they have a large and advanced business court system (called the Chancery Court) to handle complex legal litigation. It is the state of choice for both large corporations, foreign corporations, and many fast-growing or high-potential companies (for example, Venture Capitalists typically require a Delaware Corporation before they’ll invest in your company).

Insight: We recommend Delaware only if you need to issue shares to investors, are looking for future investment from U.S investors, or require certain protections against some legal procedures. The high fees and annual compliance can deter some small businesses that don't need Delaware's specific use cases.

 

Nevada

Nevada has recently exploded in popularity for both large and small businesses. This is due to Nevada’s very pro-business climate, low-tax mentality and the lack of an information-sharing agreement with the IRS (all other States share company information with the IRS).

Pros:

  • No Corporate Income Tax.

  • No Franchise Tax.

  • No State Personal Income Tax.

  • Stockholders are not a matter of public record (though Officers, Directors and Members of LLC’s are)

  • Only 1 Director required (who can also be all the Officers and the sole Shareholder).

  • Nevada Corporations and LLC’s are legendary for being difficult to pierce the “corporate veil”. This means that it is extremely difficult for attorneys to go after the company owners, shareholders, officers or directors personal assets in a lawsuit – it’s only happened a handful of times in recent history.

  • In states like California, the “corporate veil” is regularly pierced in a large percentage of lawsuits – so you could lose your house, cars, etc. in a lawsuit. In many cases, simply having a Nevada Corporation or LLC may be enough to ward off a lawsuit or predatory lawyers.

  • Nevada has a very pro-business climate with no information sharing agreement with the IRS.

  • Officers, Directors and Members need not be US citizens or residents of Nevada.

  • Minimal annual requirements: all you need to do on an annual basis is a) maintain a Nevada Registered Agent and b) file your Annual List/State Business License (both of which we can handle for you).

Cons:

  • Nevada has recently raised their filing fees (check our order forms above for current pricing) that now are more than Delaware and significantly more than Wyoming.

  • You may have to “re-register” your Nevada company in the state where you operate (if you’re not based in Nevada or have not established “nexus”).

Lowdown: Despite what you may have heard on radio and TV commercials touting the benefits of a Nevada corporation or LLC, you can’t just form a Nevada company and not have to do anything else. Many times, as mentioned above, you’ll need to qualify your Nevada company in the state(s) where you have physical operations (we can assist with this). There are legitimate ways to obtain “nexus” for your company in Nevada as your primary source of operations, but we highly recommend further discussion with your attorney in this matter.

 

Wyoming

Wyoming has also recently exploded in popularity for its very business-friendly climate and has been called “Switzerland of the Rocky Mountains” by The Economist magazine. It features some benefits compared to a Nevada entity including:

  • Wyoming was actually the first state to create the LLC in 1977.

  • All the benefits of Nevada listed above but much lower filing fees (Currently only $100).

  • Lower annual fees (Currently only $50).

  • Minimal annual requirements: all you need to do on an annual basis is a) maintain a Wyoming Registered Agent and b) file your Annual Report (both of which we can handle for you).

  • Does not require listing the members of an LLC or the Shareholders of a Corporation.

  • Does not require a State Business License (Nevada does – even if you operate out of state).

Insight: Wyoming has lower fees, less disclosure requirements and the Wyoming Secretary of State is a pleasure to work with (compared to Nevada’s Secretary of State which tends to be overwhelmed and unorganized). This is the most common state for non-residents, those without a physical presence in any state such as e-commerce sellers, and small business owners that need very simple and easy to manage company formation.

 

Common Reasons for Choosing Delaware, Wyoming or Nevada:
  • Prestige:

    a Nevada or Delaware entity is the chosen business entity of the largest, most successful and fastest growing companies in the world. Wyoming has been called “Switzerland of the Rocky Mountains” by The Economist magazine.

  • Protection: 

    predatory consumers or lawyers who attempt to threaten companies may be more hesitant to deal with a Nevada, Wyoming or Delaware company knowing that the body of law protecting the company may be more business friendly and protect the owners/shareholders more effectively. Also the identity of the company owners may be more difficult to ascertain.

  • Convenience:

    in some cases, a business may find itself moving from State to State or having partners all over the country. In this case, some businesses find it easier to simply use a Nevada, Wyoming or Delaware entity as a sort of “headquarters” that maintains the company while it moves or expands to other States. This can be easier than continuously creating and dissolving in-state companies (and changing Tax ID Numbers, Registered Agent addresses, losing company credit profiles, etc.)

  • High Growth or High Risk Company:

    if your company is fast-growing or engaged in a risky industry (such as fireworks or children’s toys), then Nevada, Wyoming or Delaware may provide the liability protection you need. Also, if your company is fast-growing, choosing Nevada or Delaware now may prevent you from needing to inevitably re-incorporate there in the future when your company needs to go public or receive venture funding, etc.

  • Holding Property or Independent Contractor:

     a client who simply needs an entity and a bank account to purchase or hold property, accept payments as a contractor or receive investment money will form a Delaware, Nevada or Wyoming company for this purpose since they are really not “operating a business” in their home State. In fact, many of our clients simply form the company and leave it “on the shelf” until they are ready to engage in business.

  • Managing Side Projects: many of our clients like to use a business entity to keep side projects organized under one entity instead of many.

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