Anyone with experience creating a LTD in Europe to incorporate?

Discussions
#1

Hi guys,

I’m new in this forum, a friend of mine invited me a few weeks ago and this place is starting to be a nice place to participate :smile:

I’m interesting in learning about the best ways to incorporate a small company in Europe. I know that it’s easy to create a LTD in Ireland or even in UK, but the not-easy part is to stay aware about the legislation, taxes, etc, and filling every year precise report.

Any experience there? Tks!

#2

I’m actually looking for the exact same thing. We’re close to charging for our SaaS app (will have to do an introduction post sometime soon), but before we do we want to have all of this stuff covered. So the time I’ve spent looking into this is pretty limited, but this is what I know and what we’re considering (will 100% contain inaccuraries, but this about helping each other figure it out, right? :D):

  • If you’re a citizen of the EU, you can incorporate in any country that is a member of it. Even though it’s not sure whether it was the EU’s intent, a ruling of a judge in Holland a couple of years ago determined that, because of the rights to live and work anywhere you want within the EU, that this meant you can also have a company in any country as well. So far, most companies just require an address, and that’s about it.

  • I’m originally from Holland (living in Brisbane, Australia right now) and the guy I’m starting our company with is from the UK, but currently living in New York. As a result of the point made above, it’s a lot cheaper nowadays to incorporate the equivalent of an Limited in Holland (you used to have at least € 18,000 in capital), and if I have to believe recent documentaries and a good friend studying economics the corporate taxes are very low compared to elsewhere, some call it a ‘tax haven’. The downside is, however, that my partner doesn’t speak or understand a word of Dutch. And because we really are in this together, as a team, we both want to understand what’s going on. So we’re limiting ourselves to English speaking countries, just to keep it simple. Also for the outside: Limited sounds more familiar than BV… if that still matters at all anyway.

  • The UK’s government website on how to go about incorporating your business is among the best I’ve ever seen. I’ve ran my sole tradership in Holland for a couple of years now and wish the websites I had to deal with were anything like it. If anything, they seem to take informing starters quite seriously. https://www.gov.uk/business-legal-structures/overview

  • In the UK there are plenty of services that will help you incorporate and will also provide an address to register with. Not sure if that’s a way you want to go, or if it’s all shady.

Now for the experts to prove me wrong on all accounts and saving the day!

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#3

I have no experience in anything other than UK Limited Companies, but I would doubt there was a better option in the EU given that:

  • Takes about an hour to setup
  • No up-front government capital deposit
  • A lot of documentation online and in paper books (official and unofficial)
  • Very little of substance changes from year to year
  • Huge market in accountancy services, both for humans and web-based tools
  • Everything is in English - less fragmentation of discussion
  • Relatively sane company law
  • Company bank accounts are easy to setup
  • Merchants accounts, whilst not trivial, are actually possible (I do hear stories…)
  • Taxation level isn’t crazy
  • Essentially zero corruption / rubber stamping fees (hello, Italy)
  • VAT doesn’t kick in immediately
  • For whatever reason, the general population will–on average–percieve a UK company as being more legitimate than, say, a Slovenian one. This probably goes double if you are planning to trade with the US.
  • Possible earlier access to services and technologies compared to other EU countries (eg. Stripe UK).
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#4

Thanks for the feedback.

I agree that UK is one of the bests places to incorporate. I agree with most of your points, however, i don’t have enought information about accountancy laws. Can you recommend any accountacy services agency there?

It’s easy to start, but it should be easy to continue after the first year. Also, I’m living in Europe (Spain) and my concern is related to getting money out of there, how taxable is it.

#5

Very related to the topic:
http://blog.gogemba.com/post/58534526652/choosing-a-payment-provider-for-your-europe-based-saas

#6

Hey Pablo! nice to see someone else from Spain around here.

(I am not an accountant or lawyer)

You really need to talk about this with a local accountant with experience in international businesses; there is some information here:

http://www.agenciatributaria.es/AEAT.internet/Inicio_es_ES/La_Agencia_Tributaria/Campanas/No_residentes/No_residentes.shtml

However, see for example:

http://www.agenciatributaria.es/AEAT.internet/Inicio_es_ES/La_Agencia_Tributaria/Campanas/No_residentes/Impuesto_sobre_la_Renta_de_No_Residentes/Cuestiones_sobre_residencia/Persona_juridica_residente_en_Espana.shtml

The above would seem to imply that if you are managing the company from Spain, the administration is allowed to consider you a “resident” for tax purposes and subject you to the local tax regulations even if you are incorporated somewhere else. It is not clearly worded either, hence my recommendation to talk to an accountant.

In any case, I believe you would have to pay income tax whenever you transfer money from the company to your personal account, and declare it as income as if it came from any other client.

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