Anyone tried Stripe Atlas to set up a U.S.-based company?

Question

I just came across https://stripe.com/atlas and what they offer sounds too good to be true.
Has anyone used these services?
If yes, how was your experience? any cons?
Their claims are pretty high:

Atlas helps you incorporate a U.S. Delaware company in a couple of days. You just fill out a simple form; we generate the necessary paperwork and handle the rest.

Stripe Atlas opens a business bank account for you with Silicon Valley Bank, the world’s leading bank for tech companies. There’s no need to visit a bank branch in person to get set up.

Cherry on top:

Stripe Atlas entrepreneurs will have access to guidance on U.S. law and taxes from Orrick, the international tech law firm, and PwC, the global accounting firm. Every Atlas entrepreneur will be able to chat–for free–with a professional from PwC.

We set up a Stripe account that you can use to start accepting payments from customers in 100+ currencies right away. You can take advantage of the complete Stripe product suite, including Connect and Relay.

grum · Accepted Answer

Given it only was announced a couple of hours ago, the likelihood of someone already using it is quite low. Those who have been Alpha testing would have been required to operate under an NDA.
Similar companies exist already and don’t cost as much. Not entirely a game changer.

working_9to5 · Answer

Anyone tried their service by now?
I’m thinking of using it as a non-US resident. Because I can’t get Stripe with my current company and paypal also seems to have better terms.
The way I see it though, I have to open this LLC in my personal name and not do any business in the US to not owe taxes (in the US).
Because at first I thought it would be interesting to put it under an existing company as a daughter company in the US. But apparently this will make the IRS consider it as a branch and you are on the hook for worldwide income of the LLC?
If anyone is using it yet, any idea on the upkeep costs (assuming no business in the US)?

adrienbetweets · Answer

antonsekatski:

First, I wanted to open a company in Estonia using e-Residency but for doing that you need to prove your connection to Estonia. You can open a company easily but they don’t guarantee you’ll get a bank account… this is just silly, I think. Why do I need a company without a bank account?

Thought many nomads already went through that process successfully though. For all I know, you need to come in person to Estonia to open a bank account.

antonsekatski · Answer

I filled an application and now I’m waiting for an answer.
First, I wanted to open a company in Estonia using e-Residency but for doing that you need to prove your connection to Estonia. You can open a company easily but they don’t guarantee you’ll get a bank account… this is just silly, I think. Why do I need a company without a bank account?
So I decided to go with Stripe Atlas for now.
Similar companies exist, yes, but there are a lot of scams out there so Stripe is a huge difference because of the brand.

wfaler · Answer

While this is really an amazing set-up IF you want a US presence, as in expect to have US staff, seek VC funding from US VCs etc, that is also it’s greatest catch.
They’ll set up a US C-Corp, which means you are on the hook for 35% corporation tax (some of the highest in the world) before you can even begin thinking about distributing profits to yourself, and full US reporting requirements.
If you live or are based in most modern countries, you’ll also be in for a world of complexity with double taxation agreements etc, and are likely to end up in a situation where both the US and your home country will want to tax the company (the latter by virtue of it being controlled from where you are).
I’d say Stripe Atlas seems a great set up if you are US based, or intend to become US based. It might be an option if you are from a politically unstable & corrupt country and are looking to base your business in a more stable jurisdiction.
For anyone from a stable developed western country, I’d suspect you are better off just sticking to having a business registered in the country of your tax residence.

antonsekatski · Answer

Thanks, I know about visiting personally. I talked to the e-Residency support and they said it’s really not guaranteed that you’ll have a bank account, there are cases where banks rejected applications even when a person has a company because they can’t prove their connections to Estonia.
Here is the article about it: https://medium.com/nomad-gate/estonian-e-residency-ultimate-guide-banking-taxes-cc27fe39c368

bavals · Answer

LeeRosen:

Can’t you pay yourself any funds remaining in the corporation as wages (paying taxes on those wages where you are obligated to pay such taxes) and therefore have zero profit - and, thus, zero corporate tax? Are you suggesting otherwise?

The way I understand it, reasonable amounts can be deducted as consulting fees, etc, as long as you can justify it. Of course, you’ll have to pay taxes on that where you live, but that has nothing to do with the corporation itself. Where it becomes tricky is when your C-corp has a lot of profits in a particular year. The IRS looks askance at transactions that imitate salary/consulting fees but are really just profit distribution. But somehow I doubt many people here will even encounter that situation except in a relatively rare (and hopefully, fortuitous) instance of selling a web site for a huge sum in cash.
Also, the 35% rate applies only to the portion of the annual profit over 10 million dollars * (note that it’s a tax on profit, not revenue). If you have to worry about being in the 35% corporate profits tax bracket, you have a good problem on your hands, at least from where I am sitting. C-Corps with annual profits under $50K are taxed at only 15% of those profits.

Ok, I looked it up: it’s a bit more complicated; the rate goes up and down, but anyway – that’s the general idea.

kaspar · Answer

@antonsekatski thanks for raising this e-Residency bank account question.
I’m MD of e-Residency. a few updates:

We changed the law that as an e-resident no previous connections necessary anymore
if you open business bank account then the “connection to Estonia” means that you have Estonian company, address. This is enough.
We changed the banking law that you can open it remotely now, so you never need to visit Estonia to have it all. First banks promised to offer this end of this year.

btw, a general note that Estonian income tax is 0% if you reinvest your profits, if you take the money out then 20% flat rate, just saying 
Kaspar

leerosen · Answer

When you say “They’ll set up a US C-Corp, which means you are on the hook for 35% corporation tax (some of the highest in the world) before you can even begin thinking about distributing profits to yourself,” - what do you mean?
Can’t you pay yourself any funds remaining in the corporation as wages (paying taxes on those wages where you are obligated to pay such taxes) and therefore have zero profit - and, thus, zero corporate tax? Are you suggesting otherwise?
Thanks

gustavkotkas · Answer

AdrienBe:

Thought many nomads already went through that process successfully though. For all I know, you need to come in person to Estonia to open a bank account.

The opening bank account part can be easily managed if you use a service provider. And the banks now have gotten more used to e-Residents by now.

opt · Answer

I think it’s more for companies outside the US, and offers the package with Stripe and banking integration:
“We expect Atlas to be most beneficial for entrepreneurs who have a
global customer base, plan to raise money from global investors, or who
plan to build an operational presence in the U.S.
While incorporating in the U.S. can make many things much
easier, it also comes with long-term legal and tax implications. You
should think carefully about whether it’s best for your business and
consult advisors as necessary.”
The FAQ section has a fair amount of info: https://stripe.com/atlas/faq
A $15k AWS credit during the beta period sounds nice.
The tax and legal help doesn’t sound like much more than an introduction to service providers who’ll charge a bucketload of money.
I still wonder if it might not be a bad option for an American nomad. Of course if you’re not based in DE you’ll still be a foreign entity (and required to register) in whatever state wants to claim you for tax purposes, right?
(Which brings us back to the permanent address thing again.)

adrienbetweets · Answer

@grum did not know this was so new.

Similar companies exist already and don’t cost as much. Not entirely a game changer.

Which ones?

opt · Answer

Any update on this service? Anybody here using it?

bananaeatsmonkey · Answer

Can’t you just set up a Delaware C Corp all by yourself? Why is it that Stripe Atlas cant provide you cannot do it yourself? Are you currently in US?

db8871 · Answer

C-Corp is pass-thru, taxed at individual rate only.

richlitt · Answer

We’re going to have to see what the first few bloggers // people who get it say. I also applied.

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Anyone tried Stripe Atlas to set up a U.S.-based company?

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