Stripe is a highly-desired credit card processor, and if you are not one of the 23 supported countries, you are left dead in the water. With the Stripe Atlas program offering a US-presence and a bank account, international users with big startup dreams came rushing in.
Unfortunately, the bad news may come to these companies before it’s too late. Operating a company in the United States becomes a huge compliance and tax liability that probably hadn’t been conceivable in developing countries.
STRIPE ATLAS CAN BE YOUR WORST NIGHTMARE
What Stripe Atlas offers is basically help to register a Delaware C-corp and bank account with Silicon Valley Bank. While this is something you could do on your own, Stripe has made it streamlined so that the user doesn’t have to take a trip to the US.
With a US company comes US Tax compliance, which is considered to be the most oppressive in the world if you live outside of it. Aside from overcomplicated filing processes, the IRS will snoop on your assets worldwide (thanks mostly to FATCA and FBAR).
If your financial situation is complicated, so will be your tax returns. You will have to account for assets and bank accounts you have around the world with a harsh corporate tax to boot.
Failure to meet filing obligations could result in hefty penalties and even criminal charges. You are right in the crosshairs of the IRS with a Delaware C-corp, so take it very seriously.
Also, be aware of the 30-percent withholding tax when sending payments to countries without a tax treaty with the United States. If you need to apply for a Stripe Atlas account, this may very well apply to you.
INTERNATIONAL ALTERNATIVES TO STRIPE
Processing credit/debit cards isn’t rocket science and there are plenty of options out there, albeit being a bit more expensive. You may find it cheaper and/or easier to register your company in your home country and applying for a company to handle international payments.
Some popular options include:
- Paypal (if your country is supported)
We don’t mean to scare you off completely from Stripe Atlas, especially since your business plan requires a presence in Silicon Valley with plans to go public. For companies that are quite small-scale or just testing the waters of receiving US customers, it’s better to be pragmatic and try a solution with few legal obligations.