Legal issues around forming an international game dev team

Question

A friend and I have been wanting to collaborate on a mobile app game. It's a 'start small but dream big' kind of venture, where neither of us has much experience, but we're hoping that if we succeed, we could build on it and become a proper full-time game dev studio in the future.

The main issue here is that we're both from different countries, and neither of us wants to risk personal liability in releasing a game without having first formed a LLC. I know the odds of ACTUALLY being personally sued for damages are very low, but it's just not a risk that we want to take.

There seem to be a lot of problems with forming a LLC when both people are in different countries, though. There are multiple laws against having a co-founder, director, or even an employee being someone from a different country.

How do game dev teams or studios consisting of people all around the world get around this problem?

Answer 1

In the long term you will not get around taking some financial risks. When your project becomes a failure, separating your personal financial future from that of your company will allow you to sleep much better at night.

The exact laws which govern limited companies differ drastically between different countries. That means a definite answer is not possible when you don't tell us where you and your co-founder are from, and even then the answer should rather come from a lawyer than a game developer. However, there are some options you might want to check with a lawyer:

• Register your company in a 3rd country with a more liberal stance. Yes, there are countries which allow to register a limited company even when nobody resides there. But keep in mind that this might look a bit suspicious.
• Instead of forming one company and hiring a foreign employee, both of you form companies, and then have one contract the other.