Do I need to incorporate in the US?

Both of my startups that ended up raising outside funding were started as either an S-Corp or an LLC (for tax purposes) and then later switched to a C-Corp.

For a self-funded startup, a C-Corp is likely overkill in the early days.

Note: I'm not a lawyer and this is not legal advice (I'm another entrepreneur and sharing my experience)

Get the simplest possible business form now. It's very easy to switch later, and there's no penalties for switching (i.e. no tax problems, no extra fees).

Even just a DBA in America would be fine! If you want something slightly more solid, LLC.

@Dharmesh, do you remember the legal fee to convert from LLC -> c-corp?

@manuel omar, you'll likely have an easier time raising money from US based angels if the company is incorporated in the US.

does the VC funding you fund US-based/incorporated entities EXCLUSIVELY? If not, you might want to look into lower-taxed entities - try the Private Limited entities in Hong Kong.

First, as a business owner, you may be exposed to personal liability for activities related to your business. As such, your personal assets may also be exposed to the risk of attachment, seizure and sale. To reduce the risk of personal liability, consider creating a separate legal entity for your business.

CHOICE OF ENTITY. There are several ways you may create a separate legal entity, including, establishing a Corporation or a Limited Liability Company [LLC]. Factors involved in deciding which business formation is right for you, include, the following: is there foreign or US ownership of the business; how many owners of the business; is the business involved in international or domestic transactions; and other related issues.

If there will be any owners that are not individuals and US residents, an LLC may be a better choice, for reasons including that the flow-through tax benefits of an S-Corp will not be available to your entity if there are any non-resident owners or any owners that are not persons (for example, owners are other enitities/companies).

Remember that simply filing the Articles of Organization or Certificate of Organization with the State and paying the filing fee is not enough to maintain corporate or LLC protection. I have posted related information at www.contactmylawyer.com/corp.htm

Disclaimer: The above is provided for informational use only,is not intended to be and is not legal advice. Consult an attorney with regard to the specific details of your situation.