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If I have a Saas business in my own country (Brazil), which is purely online and uses API licensing as the revenue model, would I have to set up a business in the US to be able to offer the service there? Or would it be necessary in order to advertise and get more business users?

Answer 8224

I am not a lawyer or an accountant, so keep that in mind.

Typically you would not need to incorporate in the US as long as you do not have what is called a "permanent establishment" in the US. For example, owed property or an office for you and/or your employees.

Here is an except from a good article at gdblaw.com I found in relation to tax liabilities:

If the internet seller is a foreign entity or person, and there is a income tax treaty between his/its country and the USA, normally the seller will not be liable for US federal income tax its internet sales unless it has a “permanent establishment” in the USA (“PE”) with which the internet sales income is effectively connected.

However, there may be cases where you may still have to file some paperwork, but that would depend on your circumstances. The US tax and business law can be complex. Do not take my answer as the final word, of course.

Answer 8231

The corporate taxes for a 'small' tech company in Brazil using the SIMPLES system are between 6% to 17,42% and the dividends are free from the personal income taxation ..YAY..!

If you register a company in the US you will be paying US corporate taxes. Roughly 34% AND, since you are brazilian, you will be paying 27,5% when you nationalise the money.

So short answer is NO.

You don't want (and don't need!) to set up a legal entity in US in order to sell software (SaaS) to them.

Reasons would make you open a legal entity in the Uncle Sam's Land:

But remember you'll need a gateway that operates with international payments and credit cards.

+90% of Brazilian companies does NOT have a corporate credit card. That's not the case in US :)

About Invoicing

As a Brazilian myself we normally think that invoice is a legal requirement, but invoice is not required before billing a customer in U.S. (very few SaaS products send one), but you would need to send your customers a receipt (aka confirmation of a transaction) for every renewal.

It's such a common practice that your customers are very likely to expect it.

About Government Support

If you still have questions, you should schedule a meeting with Apex-Brasil.

It's the Brazilian Trade and Investment Promotion Agency and their work is to promote Brazilian products and services abroad, assisting Brazilian entrepreneurs like yourself in the internationalization process - most of their help is free of cost.

They even have an office in San Fracisco to support Brazilian startups:

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Good luck!!

Answer 8256

No it's not.

I run Bugclipper - a SaaS product for developers that's purely online. We comfortably sell, advertise & support online and we have customers from US and many other countries. Legally we are based in India. Few reasons mentioned above hold true, like - if you are looking to raise money in the US, having a US entity will help.

I'd like mention one thing that we faced - Being an Indian entity and selling SaaS software product on subscription model (i.e. Monthly recurring fee) billed via credit card was complex. As Indian laws do not allow payment gateways to charge a credit card automatically on recurring basis - so we couldn't Indian payment gateways, and other payment services like Stripe and many more are not available for India.

You should check for regulations on payments for your country.

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