This week was the week of Stripe Atlas, the new service offered by payment company Stripe that allows companies all over the world to (1) incorporate a Delaware C-Corp, (2) open a U.S. bank account with the Silicon Valley Bank and (3) immediately start using Stripe for payment processing. In addition, I’ve learned through our Slack community that AWS will be giving a $15,000 credit to all Stripe Atlas beta users. Talk about a great deal.
Stripe has also partnered with a number of startup incubators and accelerators, and I do hope, Startup Reykjavik will be one of them soon.
However big of a deal this is in general, the game changing effect this can have on Iceland is even bigger.
While under the capital restrictions, people are not allowed to found companies outside Iceland. However, the Central Bank has been known to grant retroactive exemptions to the restrictions, when people have done so. There are several notable Icelandic startups that have done this, often tied to investment from non-Icelandic investors who (obviously) don’t want to lock their cash in here.
Now, with the incorporation of a Delaware C-Corp, and a U.S. bank account both “one click away” creating a U.S. company will become much easier for Icelandic entrepreneurs.
That makes it easier for an Icelandic founder to incorporate in the U.S. than in Iceland. You need 500,000 ISK (~$3,800) in equity to start a limited liability company in Iceland. Of those 500,000 ISK, around 130,000 ($1,000) is just paying for the paperwork being processed. Stripe Atlas beta users will pay a $500 one-time fee, in addition to the filing fees needed for incorporation.
The Minster for Industry and Innovation announced last year that there were plans to make this easier and cheaper, but one could argue that it’s too late. Why incorporate in Iceland when you can incorporate in the U.S?
Obviously, it isn’t that easy. There’s paperwork in the U.S. just as in Iceland, and while Stripe Atlas has been announced, it still has the “too good to be true” ring about it. Norðurskautið will in the coming weeks look into if and how Stripe Atlas will truly be available to Icelanders, and try to gauge the bureaucratic effort needed to sustain a C-Corp from Iceland.
This development will hopefully lead to pressure on the Central Bank, in clarifying and communicating its strategy in regards to startups and the capital restrictions as well.