[US Corporation] (1) Incorporating, Opening a bank, and Doing business in the USA without physical presences in the USA with ‘Stripe Atlas’ - Global Startup - Continued

Incorporating, Opening a bank, and Doing business in the USA without physical presences in the USA with ‘Stripe Atlas’ - Global Startup (1) Continued

Stripe Atlas

Starting a company in the USA can be needlessly complicated—lengthy paperwork, bank visits, legal complexity, numerous fees, and non-obvious decisions about what services to use. Stripe Atlas makes this fast and easy: a tool to handle everything involved in establishing an internet business, opening the new business bank account within days without the physical presence, and keeping track of everything in one place. Stripe Atlas generates the legal documents and files the paperwork and incorporates your new company in Delaware, which is the most business-friendly state and opens Silicon Valley Bank(SVB) on your behalf.

Stripe Atlas is designed for founders of internet and technology businesses. Thousands of entrepreneurs from more than 130 countries already use Stripe Atlas. Stripe Atlas have found it to be particularly suited to:

*  U.S. startups

*  Startups outside of the U.S. building global companies

*  Startups outside of the U.S. raising money from professional investors

*  International companies expanding their operations to the U.S.

C Corporation VS LLCs

Type	C Corporation	LLC (Limited Liability Company)
Nature of business	Stock company	Pass-through entity
Ownership	Shareholder (Individual or Corporation)	Members (Individual or Corporation)
Residency requirement	No required. Permitted to resident or non-resident owner	No required. Permitted to resident or non-resident owner
Legal entity	Separate entity to limit the liability of owners and officers for the acts of the company and for debts which the company may have.	Separate entity to limit the liability of owners and officers for the acts of the company and for debts which the company may have.
Operation	Most major actions of a C corporation require some procedures, such as formal resolutions of the company or votes of the stockholders.	LLC Operating Agreements empower the owners and/or managers to simply act.
Tax Treatment	Double taxation: Company income is taxed at corporate income tax rate; shareholders also pay tax on dividends or profits distributed.	Single taxation: Each member of LLC must file income tax return (e.g., individual income tax return) on profit or loss which LLC passes through each member

※ A certain type of an investor may not be interested in (or may be legally barred from) investing in LLCs because of the income and loss pass-through nature.

※ You may converse LLC to C Corporation or vice versa.

Where to incorporate

Available in Only Delaware State (Available in either the US or Foreign address)

Fee

One time fee

Ongoing costs

$500 for all successful applications including: * C-Corporation or LLC Incorporation * Signed Certificate of Incorporation, Bylaws, and Board Consent or Operating agreement * Tool to issue stock to founders * First year of registered agent fees * IRS Tax ID Employer Identification Number (EIN) * Open a bank account in and debit card with Silicon Valley Bank * Set up Stripe account and networking in an Atlas forum with other founders, other entrepreneurs, 200 investors, accelerators, and companies around world * Free post-incorporation templates * Access up to $5,000 in promotional credits from Amazon Web Services (AWS)

* $100 per year to renew Delaware registered agent (renewed automatically) * $25 per month for your business bank account (the fee is waived if you maintain a minimum average balance of $25,000 per month)

※ The Stripe Atlas LLC is designed to make conversion to a C Corporation as simple as possible at discounted and flat-rate packages fee.

※ The required documents for incorporation may vary depending on the type of business you establish.

Procedure

(1) Invitations

Stripe Atlas is available to join by an invitation only.

Invitation	Existing Stipe Atlas founders	Direct application for a Stripe Atlas
Method	Existing Stripe Atlas founders can invite other entrepreneurs to join in Stripe Atlas immediately	Anyone can still apply directly for an invitation request, for which Stripe Atlas will respond within two weeks.

(2) Application

Once you're invited to Stripe Atlas, you'll need to provide Stripe Atlas with the following information about your product, team, and how you'd like to set up your new company.

Category	Information
Company	New company’s proposed name
	A physical business address: 1) Is not necessarily in the U.S. 2) can be a business address or personal residence.
	A contact phone number
	The number of shares of stock to be authorized
	If it is a subsidiary, the parent company’s name, type (e.g., corporation), tax ID number, and a copy of the company’s government-issued registration document
Business and products or services	Website showing the products or services, price, contact, terms of service, and more
	If website in progress, screenshots, wireframes, detailed description
	Founders, investors, and other relevant history
Team (yourself, anyone else that owns more than 25% of the company, and anyone else filling the primary company roles.)	Email address
	Phone number
	Legal name
	Date of birth
	Personal, physical address
	Percent of company ownership
	Government-issued identification document

(3) Incorporation

After you submit the application and Stripe Atlas creates your Stripe account, it’ll generate the legal documents to start your corporation as the following.

Category	Description
Legal documents	Certificate of Incorporation
	Bylaws for your corporation
	Board Approval of Organizational Resolutions
	A Bank Deposit Agreement and Online Banking Enrollment with Silicon Valley Bank, for opening a bank account
	IRS form SS-4, to request an EIN for tax-reporting purposes
Bank account	Open a USD-denominated business bank account for your new company at Silicon Valley Bank (SVB)
	Once the bank account is opened, a temporary password is sent to log in online and you can find the login user ID in your Banking Enrollment Form in the Stripe Dashboard.
	Stripe Atlas users are also eligible to receive a debit card linked to their SVB account. If you opt-in for debit cards when you complete the application, you will receive an email from SVB after you receive your EIN, with instructions on how to complete your debit card application.
Incorporation	Registering your corporation in Delaware generally takes a couple of business days. Once your company is incorporated, you’ll receive your Certificate of Incorporation via email. It notes that the original is in electronic format; no hard copies are created.
	Stripe Atlas will email you with information about issuing stock to founders after your company is incorporated. New corporations can issue stock with standard terms using its free tool within 30 days of incorporation.
Corporate tax ID	When your incorporation is complete, your new company can be registered with the IRS to create a U.S. Federal Employer Identification Number (EIN). Stripe Atlas will automatically send form SS-4 to the IRS to request an EIN for your new company. It usually takes up to 2 weeks to receive your EIN via email; 6-8 weeks to receive it via physical mail.

Reference

From San Francisco to Sri Lanka, thousands of entrepreneurs in 124 countries have used Stripe Atlas to get their businesses off the ground in the USA.

Company	Detail
METAFUSED (https://www.metafused.com)	Led by Madhuban Kumar, Metafused’s mission is to make data meaningful. Their product applies artificial intelligence to let users know what customers and prospects are going to do next
During, Inc. (https://during.com/)	Zach Holman, one of the first engineers at GitHub, is building During, a calendar that helps you plan and collaborate on everything that needs doing.
IRIS (http://getiris.co/)	Iris is your modern day emergency alert for mobile, founded by Cat Noone in NYC. Iris provides hospital detection, a digital health card and rapid alerts to your loved ones in the critical moment when you need it most.
TRESS (http://www.tressapp.co/)	Started in Ghana, Tress is a social community for black women to discover and share hairstyle inspiration, information and tips. Founders Priscilla Hazel, Esther Olatunde, and Cassandra Sarfo participated in Y Combinator’s Winter 2017 batch.
PASILOBUS (https://www.pasilobus.com/)	Pasilobus builds apps and e-commerce solutions for clients on Shopify. The company is headquartered in St Louis and has employees around the world.
ZUMROD (https://www.zumrod.com/)	Zumrod is an e-commerce platform that supplies health and beauty products to women in the Arab World. Co-founder Said Hassan also leads Gaza Sky Geeks, the first startup accelerator in the Gaza Strip.
LUDUS (https://ludus.one/)	Vincent Battaglia, the Belgian founder of LUDUS, established his business in Delaware by Stripe Atlas because his business is 100% SaaS with potential customer everywhere on the globe and desire his business to become a global company. The company provides presentation tools for designers on SaaS basis.

* How the business law in Delaware is the most business-friendly

* What you do for US Taxation

(Continued in 2nd edition) Click here

The following tax information is for your reference, and is not legally binding.

Source: Stripe, IRS, and State of Delaware

[Korean Foreign-Invested Company] Introduction of limitations on tax deductibility of multinational companies’ interest expenses and Increase in dispatched workers’ withholding tax rate and expansion of scope of withholding agents

Major revisions to this year’s tax laws II for Korean Foreign-Invested Companies (Continued from last month) - March 2018

※ Introduction of limitations on tax deductibility of multinational companies’ interest expenses (Article 15-2 of the Adjustment of International Taxes Act, newly inserted)

□ Overview

○ Applied to: Domestic companies (including the domestic place of business of a foreign company) having transactions with an overseas special related party

- Finance and insurance companies are excluded.

○ Limitation of deductibility: If net interest expense accounts for a certain percentage (30%) of tax-adjusted income, the excess interest expense shall not be recognized as deductible expense.

-Calculation of adjusted income: Depreciation expense on fixed assets and net interest expense are added to the income of each business year.

-Interest expense applied: Net interest expense for overseas special related parties (Interest payment-interest received)

○Between the thin capitalization system and the limitation of deductibility of interest expense, the regulation that produces the larger amount of non-deductible expense shall apply.

(Reason for revision) To prevent multinational companies’ tax evasion through excessive deduction of interest expense.

 (Applicable period) Starting from the business year commencing on or after Jan. 1, 2019.

□ Background of introduction

○The OECD recommended introducing regulations limiting the interest expense/earnings ratio to a set percentage, in order to prevent multinational companies’ tax evasion through excessive interest expense deduction (OECD BEPS Project Action 4).

○Korea has been operating the thin capitalization rule since 1997, but the current rule only applies to borrowings from overseas controlling shareholders and therefore does not apply to borrowings from overseas subsidiaries. Also, the rule does not directly restrict the ratio of interest expenses to earnings.

○In this regard, in line with the OECD recommendations, regulations limiting the interest expense/earnings ratio was introduced for overseas special related parties including overseas subsidiaries.

- However, considering that Action 4 is a common approach (i.e., a recommendation) and is in the early phase of introduction, the revision was made as simple as possible to reduce the burden on companies.

○The existing thin capitalization rule and the new limit on interest expense/earnings ratio shall both be applied, and the regulation that produces the larger amount of non-deductible expense shall be applied.

* Japan, France and the U.S. also operate both regulations.

※ Increase in dispatched workers’ withholding tax rate and expansion of scope of withholding agents (Article 156-7 (1) of the Income Tax Act, Article 207-10 (1) of the Enforcement Decree of the Act)

□In order to tighten control on the tax source from foreign dispatched workers, the following revisions will be made:

○Expansion of scope of withholding agents:

-Current: A domestic company whose total payment in return for labor provided paid to a foreign company exceeds 3 billion won per year

-Revised: A domestic company whose total payment in return for labor provided paid to a foreign company exceeds 2 billion won per year

○ Expansion of scope of businesses subject to withholding

- Current: Air transportation, construction and professional, science and technology services

- Revised: Vessel construction and finance businesses added to the list

○ Increase in withholding rate: 17% (current) → 19% (revised)

(Reason for revision) To strengthen management of tax source from foreign employees dispatched to Korea

(Application) Applied to payment for labor provided paid on or after Jul. 1, 2018

☞ The following tax information is translated from Korean for foreign-invested companies, and is not legally binding.

☞ Source: Korean National Tax Service

[US Corporation] Tax accounting update for an US Corporation taxpayer for 2017 and 2018

Tax accounting update for an US Corporation taxpayer for 2017 and 2018

※ Deadline of corporation income tax returns for 2017

For S-Corporation or Partnership

• Original due date: March 15th, 2018

• Due date by application/approval for automatic extension: September 17th, 2018

For C-Corporation

• Original due date: April 17th, 2018

• Due date by application/approval for automatic extension: October 15th, 2018

※ Corporation Tax revision by ‘Tax Cut and Job Act (TCJA)’ for 2018

1) Domestic Production Activities Deduction

For a C-Corporation, this deduction was repealed.

2) Executive compensation

For a C-Corporation, a publicly held corporation may not deduct compensation expenses in excess of $1,000,000 paid to the CEO and CFO as well as to the three other most highly compensated officers (covered employees). Previous exceptions based upon qualifying commissions or a performance-based plan of the company no longer apply.

3) General−Business Interest Expense

For a C-Corporation, all interest paid or accrued during the taxable year on indebtedness incurred for business purposes is limited to the sum of (1) business interest income; (2) 30 percent of the adjusted taxable income of the taxpayer for the taxable year (EBITDA through 2021, EBIT all years after); and (3) the floor plan financing interest of the taxpayer.

4) Business Meals and Entertainment

For a C-Corporation, business meals are 50% deductible to the corporation and business entertainment is no longer deductible. Food, beverages or meals at eating facility is 50% deductible through 2025 and nondeductible after 2025. The transportation for employee is repealed as exclusion for individual and deductible by employer.

5) Lobbying and Political Expenditures

For a C-Corporation, direct-type lobbying expenses in connection with local governmental lobbying are also not deductible.

6) Net Operating Losses (NOL)

For a C-Corporation, there are no carryback of NOLs but NOLs may be carried forward indefinitely. The NOL deduction will also be limited to 80% of taxable income. No charitable contribution deduction is allowed in calculating the NOL. The dividends received deduction is allowed to be deducted before calculating the NOL.

7) R&D Amortization

For a C-Corporation, R&D inside U.S.A is amortized in 5 years and R&D outside U.S.A does in 15 years, starting 2021.

8) Dividends Received Deduction (DRD)

For a C-Corporation, the percentage of DRD changed.

Percentage Ownership	2017	2018
0% to <20%	70%	50%
20% to <80%	80%	65%
80% or more	100%	100%

9) Bonus Depreciation

For a C-Corporation, the current law allows a 100% deduction for new or used property placed into service after September 27, 2017 and before January 1, 2023, and the deduction phases down after December 31, 2022 (80%, 60%, 40%, and 20%).

10) Section 179

For a C-Corporation, the current limitations for tax years beginning after December 31, 2017 allow maximum property expensing of $1,000,000, which phases out as property exceeds $2,500,000.

11) Businesses with average annual gross receipts of $25 million or less:

For a C-Corporation, are allowed to use cash basis, are exempt from UNICAP, or may use completed contract method.

12) Tax rate changes

For a C-Corporation, the federal tax rates changed.

Taxable Income	2017	2018
$ 1 – $ 50,000	15%	Flat rate 21%
$ 50,001 – $ 75,000	$ 7,500 + 25%
$ 75,001 – $ 100,000	$ 13,750 + 34%
$ 100,001 – $ 335,000	$ 22,250 + 39%
$ 335,001 – $10,000,000	$ 113,900 + 34%
$ 10,000,001 – $15,000,000	$ 3,400,000 + 35%
$ 15,000,001 – $18,333,333	$ 5,150,000 + 38%
$ 18,333,333 over	35%

* Moving from the worldwide tax system to the territorial tax system, effective January 1th, 2018, the USA is going to have Deemed Repatriation Toll Charge, Global Intangible Low Taxed Income(GILTI), Foreign Derived Intangible Income(FDII), and Base Erosion and Anti-abuse Tax(BEAT).

* Personal Service Corporations Tax Rate Change: Flat rate 21%

13) Corporate Alternative Minimum Tax (AMT)

For a C-Corporation, for tax years beginning after December 31, 2017, the corporate alternative minimum tax has been repealed. The AMT credit is refundable for any taxable year beginning after 2017 and before 2022 in an amount equal to 50 percent (100 percent in the case of taxable years beginning in 2021) of the excess of the minimum tax credit

14) Excess Business Losses

For an S-Corporation, the excess business loss of any non-C corporation taxpayer is limited to $250,000 ($500,000 for married filing jointly filers).

15) Section 199A Pass-Through Deduction

For an S-Corporation, its shareholders are eligible for the Section 199A pass-through deduction.

Note: This is for an US taxpayer’s reference and is not legally binding.