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How to organize a startup, which contains different people from different parts of the world with no common office? Where to register it? How to deal with taxes? Which legal issues could arise?

For example: 1 member is in UK, 1 member in Germany, 1 member in New Zealand. All guys work together, creating a software product. Now, it's time to start web-based sales. No plans to relocation.

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4 Answers

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Giff Constable have written about his experiences here. Jeff Atwood (who's a founder of Stack Overflow which powers this site) has written about his experiences here.

Both very good posts, and they basically cook down to:

  1. No substitute for face time.
  2. Work with the best tools.
  3. Work with extremely good and accountable people.

Best of luck!

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up vote 1 down vote

I'll add a few high-level comments about legal issues (posts cited below are U.S.-oriented, so you should consider them illustrative rather than authoritative for your purposes):

  • Before you figure out where to register your entity, you need to determine the type of entity and its name. (Please see "Should I form an LLC or a corporation?".)

  • You need to enter into an agreement between the founders with respect to ownership of the entity.

  • You need to make sure that the entity owns the software and all associated intellectual property rights. (Please see "Securing IP Requires More than an NDA".)

  • You need to consider trademark registrations (for company and product names) and acquisition of associated domain names. (Please see "Licensing Trademarks? Think about Domain Names, Too".)

  • You should choose one country's laws to govern all of your agreements (probably the law of the country where the entity will be registered), and you should choose legal counsel who is familiar with that country's laws.

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

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up vote 0 down vote

I'm currently running a startup where employees are spread across Europe, Africa and Asia. The company is incorporated in Europe for the obvious reasons and work is done like in any other multi-national company using standard & recent communication tools including phone & email.

Now the challenging part is that you have an actual development team working on the same user stories on a large project. I don't recommend you that.

Unless you can split the product into well defined components, you'll face many organizational problems due to inefficiency of communication.

There are plenty resource online that explains how to do that, some more complete than others, but too much of them have been written by people that didn't actually test them on the long run. Therefore I won't recommend you any of them and warn you about them.

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what are the obvious reasons why it is incorporated in europe? – jimg Dec 10 '10 at 20:26
@jimg: because Europe is far less risky than Africa or Asia if we speak about laws and business environment – psihodelia Jan 12 '11 at 16:06
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If you employ people from different countries, you have to remember that your insurance obligations will be different in each of the countries. If you want to employ people from Europe, I suggest you have a look at http://ec.europa.eu/social/main.jsp?catId=851&langId=en and make sure you understand who and where will be responsible for social security of your employees.

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