explore partnership with MangoPay

[chadwhitacre]

re: #126

Just had a good first call with Pierre from MangoPay. They basically are the European Balanced. Whitelabled, user experience wouldn't need to change much at all in terms of adding credit card and bank account details, we just switch under the hood based on country. They work with Visa, MC, Amex, and various national card brands. Deposits are via free SEPA wire transfer. Outstanding questions:

• Can an American company come under their licence or would we need a European entity?
• Gittip would at least need a European bank account. Pierre recommended HSBC and Bank of America (which works with BNP Paribas) for free or cheap wire transfers.
• Can we make the flow work from Balanced escrow to Gittip's U.S. bank account to Gittip's European bank account into MangoPay escrow and out from there? (pic below)
• He's going to get me detailed pricing and card information. It varies by country and card (amex).
• MangoPay is targeting GPB and USD by June.

I suggested that we could have a three-way call with @balanced if needed.

[chadwhitacre]

I just spoke with our legal team and you need to be registred as a European company to be able to use Mangopay (and have a bank account in Europe).

[chadwhitacre]

CEO of MangoPay would be "happy to help" (Twitter).

[Celinelz]

Hi Chad! Would be happy to discuss the subject with you and find a way to help! We can set up a conversation with Balanced, when you want! Cheers. C.

[chadwhitacre]

@Celinelz Thanks for jumping in here! The absolute ideal for me as a business customer would be if you and @balanced were able to strike some sort of partnership where customers of one could do transactions on the other as well. It's a huge burden for me to have to set up a European company with a European bank account before I can serve my own customers in Europe. I've created a ticket over at balanced/balanced-api#357 to introduce the conversation to @balanced. Let's pick up there ...

[chadwhitacre]

@mvdkleijn @daankortenbach Want to help start an EU subsidiary so we can make this happen?

[mvdkleijn]

I'm game. Going to bed now. We'll talk details later.

[ghost]

Interesting development. Gotta go too and we'll talk later.

[kyzh]

Do you need a business partner to administer a legal entity and a bank account only or you also need someone hands on with code?
Are you looking for a tax heaven Gibraltar, Guernsey,Jersey,Isle of Man,Luxembourg, Monaco,Andorra, or just a country with a laxer tax regulation like Ireland, Switzerland, to a certain extend UK an Netherlands.
Also, have been advised on what type of entity you would rather deal with?

[chadwhitacre]

@kyzh Not looking for code (on this ticket). Looking for a business partner to administer a legal entity and bank account. Doesn't need to be a tax haven. All the advice I have so far is on this ticket. :-)

[chadwhitacre]

@mvdkleijn @daankortenbach Sweet, thanks! Let's chat soon ...

[ghost]

Netherlands can be a tax heaven for non-Dutch entities. Setup costs for such international tax planning structures are about USD 3000 for the first year and USD 1500 per year after that. These involve registering a Trust and several holdings in differect countries. Not sure you would want to do this as there's a fair amount of resistence by the EU for these structures. Large entities do however all use this method as it is fully legal. Laws regarding this do tend change though, not only in the EU but also in the USA. This is however the way to go if a "tax friendly" structure is what is needed. You could in fact use this to collect all global payments and distribute from there virtually tax free. A royalty structure can be applied as Gittip could be seen as receiving royalties for software, it doesn't matter if it's open source. Legal ownership of Gittip would be the trust in this case, which can have benefactors but not owners, it would own itself. EU and USA frowns upon these structures, take that in consideration.

Cheaper and different entities/structures are also possible, a Limited (UK company) can be registered everywhere in the EU in a few hours for less then USD 300 and has full legal status. It is however advisable to at least register two Limiteds where one is a holding company to protect the legal owners.

Stuff like this is not to be taken lightly and if I am to join in such a venture the legal stuff needs to be clear.

[mvdkleijn]

@daankortenbach @whit537 I have to agree completely. The legal stuff needs to be worked out in detail. I for one am willing to help set things up, but I'm a little uncomfortable to say the least at the thought of possibly being held liable for things done by Gittip LLC. Acting as a legal / paperwork go-between I have no problems with though.

In the end, legal ownership should clearly fall to Gittip LLC, not to any EU-based representatives.

Some nice reading can be found here: http://europa.eu/youreurope/business/starting-business/setting-up/united-kingdom/index_en.htm

[mvdkleijn]

@daankortenbach @whit537 Another option would be to setup a non-profit? Since AFAIK Gittip is intended to be non-profit, that would work fine?

[chadwhitacre]

Thanks for the pointers. I wasn't thinking in terms of a tax-friendly structure. The UK Limited structure sounds like what I was thinking (we're using an LLC here in the U.S.). Here's a page on setting up a UK Limited which seems quite helpful:

https://www.gov.uk/limited-company-formation/overview

[chadwhitacre]

There's also this:

https://www.gov.uk/register-as-an-overseas-company

I may call the phone number listed there.

[chadwhitacre]

@Celinelz If I register a UK Limited company, will that be sufficient to get a bank account I can use with MangoPay?

[kyzh]

@whit537 it is certainly a pre-requisite to open an account, sometime you can do all the paper work over the Internet.
Usually they require to meet you personally once they have all the details in hands, maybe you can do it over the phone.

Also if you have time to enquire the charitable incorporated organisations (CIOs), maybe it is closer to the idea of what you need.It is relatively new, so documentation might be a bit scarce .
It will probably be a little more complex than a limited company though: http://www.charitycommission.gov.uk/frequently-asked-questions/faqs-about-charitable-incorporated-organisations-%28cios%29/

The good point of the limited status with your vision of the the company is you will likely reduce the paper work http://www.hmrc.gov.uk/factsheet/limited-company.pdf

[chadwhitacre]

Sounds like a UK Limited company can work with MangoPay. I'm encouraged by how good the www.gov.uk website is and how streamlined the process seems to be. Let's explore this option further over on #1379.

[mvdkleijn]

@whit537 I believe Gittip's escrowed money is actually escrowed with Balancde? Was it worked out how to do the money transfer from Balanced to MangoPay when we have an account there? (perhaps I missed that part)

[chadwhitacre]

If we do end up with a European bank account, maybe we should look at TransferWise (cf. #592) to do transfers?

[kyzh]

transferwise is quite good, they have a fast and professional support.
It is quite good if you want a good exchange rate and know what is going on.
Then it depends on whether or not they find someone to match your order at the price you want.

[chadwhitacre]

Data point:

Starting a company in the UK is incredibly easy, but setting up a bank account in the EU is not.

http://pastebin.com/VSjCpYxt

[mvdkleijn]

@whit537 - I read it, It is one person's experience. He's mentioned none of the banks he's applied to and there's a big difference between banks in say the UK and NL. It also depends on timing, what with the crisis and all.

Let's not assume its difficult until we actually try it. If you need me to ask questions around here, give me a shout. I still believe an EU bank account with the MangoPay guys in backing would be the preferred option. If only because of lower fees.

Perhaps @Celinelz / MangoPay can help out here somehow?

[mvdkleijn]

@whit537 See http://www.ukbusinessforums.co.uk/forums/archive/index.php/t-283699.html

True, this is about an EU based director but it means that you too should be able to use any EU based bank with the UK Limited. So if there's a bank within the EU that'll open an account for Gittip, you're set.

[mvdkleijn]

@whit537 - Sorry if I'm annoying, but I'll keep bugging you on this. 👅

What's the status/goal on this? Is MangoPay and a UK ltd. still an option or is Gittip going solely for TransPay?

[mvdkleijn]

whoops... click close & comment by mistake... 👎

[chadwhitacre]

Is MangoPay and a UK ltd. still an option or is Gittip going solely for TransPay?

MangoPay is still an option. Gittip is not going solely for TransPay. I raised TransPay (#417) to an IRQ for a few weeks because of the perishable opportunity presented by the CrowdConf conference. Now that that opportunity has expired, #417 is no longer an IRQ (per #417 (comment)).

[chadwhitacre]

From @Celinelz over at #417 (comment):

Hi Chad, just a quick not to let you know, we are about to launch Mangopay v2 for GBP. So it would be interesting that you take a contact with our sales team ([email protected] - Ask to test the V2 for GBP), to open you an account on the beta version of mangopay v2 (We already have couples of clients testing it).
Please note that you need to have a european company to contract with us. You can of course start the implementation of Mangopay while you create the company. Céline.

[chadwhitacre]

From @zwn at #126 (comment) :

I've asked in my bank under what conditions can foreign entity get a bank account. The response is that in general it is possible when some documents are supplied (depends on what is available) and it needs to be approved by the legal department of the bank.

So, would a bank account for Gittip LLC in an EU country move this forward somehow? I'd like to say that this bank account is free of charge and also transactions within Czech Republic are free of charge.

[chadwhitacre]

Dropping to ★★☆.

[chadwhitacre]

Waffling ... back to ★★★.

[chadwhitacre]

Over on #67 we've ended up going with a piecemeal solution, with Braintree for payins, and PayPal/Zipmark (hopefully; #3491) for payouts.