Benefits Of Setting Up A US LLC: Setting up a company based in US allows you to access many services like PayPal, Stripe, Amazon, Kickstarter, etc. If you are a foreign entrepreneur, you may want to consider forming a Limited Liability Company (LLC). A US LLC offers numerous benefits, including limited liability protection, pass-through taxation, flexible ownership and management, and easy market access.
Limited Liability Protection: Just like an Inc, a LLC provides limited liability protection for its members. The members are not personally liable for the debts and obligations of the company, and their personal assets are protected in case of a lawsuit or bankruptcy. This is especially important for foreign entrepreneurs, as it can provide an extra layer of protection for their assets in their home country.
Pass-through Taxation: In most states of US, LLCs are not taxed at the state level. Instead, the income and losses of the company are passed through to the members, who report them on their personal tax returns. Here is where it gets interesting. If the members of the LLC are non-US tax residents, it is possible to use the LLC as a tax-free entity legally. Although there may be no applicable state taxes, it is essential to note that members are still required to register and file taxes with IRS at the federal level, regardless of their tax residency status. Non-US tax residents may be subjected to a withholding tax at the federal level. Therefore, it is highly recommended to consult with tax advisors for specific guidance.
Flexible Ownership And Management: A US LLC can have any number of members, including just one, and these members can be individuals or other corporate entities. One way to potentially reduce tax overheads is to use a corporate entity in a tax-friendly country as a member of the US LLC. It is strongly advised to seek the expertise of a professional to set up the LLC in a tax-efficient way. Remember, tax evasion is illegal, whereas tax reduction is perfectly legal.
Low Cost And Easy Maintanence: Another benefit of using a LLC is that the costs of formation and maintenace are relatively inexpensive. Some states do not even charge an annual fee for mantaining the LLC!
Read About » Guide to Understanding the Cost of Forming and Maintaining a USA LLC by State.
Disclaimer: This is not financial advice. This is not tax advice. The information is provided “as is” without any warranties nor guarantees. Some links in this post may generate a small referral or affiliate income.