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Where to set up offshore LLC (as an American)?


by @gnefkow4yr  | 8 comments

Hello,

Iโ€™ve been searching through the forum, but most of the information Iโ€™ve found seems a little old and Americans, unfortunately, seem to be exceptions to a lot of things.

Situation:
Iโ€™ll start a new job with a 1-2 year contract outside the US in about a month, I:

  • am a US citizen - it is the only passport I hold

  • have been using my parentsโ€™ address (Texas) as my official address for the past few years.

  • will be on-sight in South East Asia, but officially billed as a private contractor for the company.

  • will make less than the cut-off amount for the American tax exemption in next year. It is realistic to assume based on my career, though, that in the coming years I will be over that mark.

  • plan to qualify for the 330 rolling days outside of the US

  • Donโ€™t plan to return to the US for at least the next several years, maybe ever for residency.

From research so far, it looks like the best options for me are Belize, though I see a lot of people talking about Hong Kong or Singapore. I know that within the US, Delaware LLCโ€™s are easy to set up, and may be a good short-term option since Iโ€™ll likely qualify for the foreign tax exemption in 2018.

I would love to talk to anyone that has some experience with this as my head is spinning a little bit. Website recommendations would also be great (there is a lot of information out there, but figuring out what is and isnโ€™t sketchy is a bit harrowing - has anyone worked with, like Nomad Capitalist or Flag Theory before?).

Thanks!!

Nomad Capitalist: http://nomadcapitalist.com/
Flag Theory: https://flagtheory.com

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@flipchan3yr

Hey i have gone down this road and can tell you this: all the major banks in the caribians and around that area charge a lot for transactions like 70-200usd per transaction, a huge problem after finding a banking partner is to find a payment service merchant, My tips would be to find a good and cheap(and good!, dont use a shady one) payment merchant, flag theory is pretty good for setting up a company to try the offshore stuff, but trust me the Banking for offshore companies is a REAL pain

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Iโ€™m also an entrepreneur. I spent a bit of time looking into this. One option is to renounce your US citizenship but then where do you go, Dominica? There arenโ€™t many countries that you want to be a citizen of that are easy to citizenship in. For example, Switzerland is great for tax and Visa purposes but hard to become a citizen of. An LLC is a pass through entity so it doesnโ€™t matter where you set up your LLC. In fact, Delaware is a bad option if you donโ€™t live there. Believe me, I made that mistake. The best place to set up an LLC is a place you have an address in. Iโ€™m trying to do the 330 day exemption so I use my parents house in Pennsylvania as the address. If you set up in a state you donโ€™t have an address in (PO box doesnโ€™t count) you have to pay a yearly fee to someone to have an address, usually $300 plus extra paperwork. Some states have onerous LLC reporting, like California so if you have an address there donโ€™t bother. Yearly reporting, even if you have an address there, is $900. Pennsylvania has no yearly reporting or cost for LLCs.

I plan to not take more than $100k as personal income per year thus having no federal taxes and any extra profit I will reinvest in my company or buy land or something. Better to let the profit compound than pay taxes. Down the road I can take the profit or give the money away or invest in something else. That way I donโ€™t pay tax on it. Why do I need more than 100k a year while Iโ€™m living in developing countries?

I hope that helps. This is not legal advice, obvi. Just a guy talking from personal experience.

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It may be worth it if youโ€™re paying $10k after FEIE allowance. There are maintenance fees and paperwork though. Steward Patton can help. http://ustax.bz

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Why do you need an offshore company? Iโ€™m an American. Iโ€™ve lived outside the U.S. for nearly ten years. And Iโ€™ve considered setting up a business in another country. But I couldnโ€™t figure out any benefit to having another company, and there is a cost to maintaining a company as well as dealing with the paperwork. Am I missing something?

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why wouldnโ€™t you want to setup LLC in Wyoming?
From what Iโ€™ve heard its kinda offshore which you can use within US.

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@levelsio4yr

Beware youโ€™re entering a legal and fiscal minefield which may not be worth the trouble.

The CFC laws in countries apply to controlled foreign corporations. They make you obligated to report all income from your foreign companies. Depending on the situation, the IRS may even double tax your foreign company and consider it a US company for fiscal purposes.

Additionally as an American citizen your global personal income is taxed in US. The FEIE exclusion helps you in that but only until $100k.

The only way to escape this is to renounce your citizenship. Even then US might exit tax you if they figure your reason to immigrate is fiscal. See Eduardo Savarinโ€™s case.

Anyone reading this whoโ€™s European like me: yes the CFC law probably also applies to you and your country has its own version of it. Luckily as a European youโ€™re NOT taxed globally in your country as long as you donโ€™t LIVE there (as a resident).

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@gnefkow4yr

Yeah, it kind of sucks to be American in that respect - theyโ€™ll tax you no matter where you go!

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@gnefkow4yr

Update:
I still donโ€™t really have an answer, but Iโ€™ve found this (rather scathing) article about Nomad Capitalist and Flag Theory: https://gregorydiehl.net/edmund-john-flag-theory-review/

I also bought this book which Iโ€™m only a few chapters in, but has been useful so far:


(it doesnโ€™t really answer the question so far, but since the American tax system is really complex - particularly for nomads - it helps break all of that stuff down).

The book was written by the people at 1040 Abroad, but I havenโ€™t worked with them, so if anyone has opinions about that organization Iโ€™d love to hear as well.

Thanks,
Kyle

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by @pixels3yr 2 years ago | 1 comment

Greetings Nomads,

I recently closed a US company that was used to sell cheats or hacks for popular games due to imminent litigation.

I have just recently embarked on a similar venture, but working as a contractor. Myself, and my lead developer have just found ourselves in the position of not being paid and will need to re-establish ourselves.

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Due to the nature and risk of litigation from large gaming companies I believe moving offshore will be the path I should take. I spoke with my attorneys, who basically made it sound like it would be impossible to set up without physically living somewhere, based on my past experience with these guys, and paying tens of thousands of dollars to protect myself just for them to say โ€œitโ€™s best to shut downโ€ the moment we were contacted by a gaming company, I am going to assume itโ€™s their lack of experience.

My questions are:

  1. As a service likely in the same realm as Adult Services or Gambling, with myself residing in the US and my Lead dev residing in Europe, what country would be a good option to set up with fair tax that cant easily be pressured by US or European game producers?

  2. In said country should I find and contact legal council there instead of using US attournies to fumble through this charging me exponentially more to just relay info and elongate the process?

Thank you in advance for any assistance.

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by @invictus_14yr 3 years ago | 3 comments

Hello everyone,

I am a resident of Canada and I just found this site. I have been involved in cryptocurrency since 2011. I have been taking a bit of profits and paying capital gains taxes on my withdrawals for the 5 years. The problem is, 2018 is going to be a big for me because I have some investments that I expect to 10x in value. If I proceed with active trading the gains are getting to be so much that they are really going to cut into my bottom line.

I would like to incorporate offshore somewhere so I can trade in a companyโ€™s name and then pay myself a wage through that company that I can pay taxes on. What would be the best location to do so?

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in Hong Kong by @prof5yr 4 years ago | 23 comments

Iโ€™ve just hit the 18-month mark of business in Hong Kong ready to submit by first Profit Tax Return. I also have the option of filing an Offshore Profits claim.

The Offshore Profits claim itself seems to be a convoluted, long drawn-out process with significant costs to bare in working with a certified CPA to answer Inland Revenue Department questioning.

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Hi there,
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by @neutron6yr 5 years ago | 3 comments

Hi,

Iโ€™m from the UK and looking at setting up a business offshore. However, Iโ€™m wondering is it possible to become an employee of this offshore company that I set up, while remaining a UK tax resident?

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Which bank can I use for my UK LLC in Colombia?


in Colombia by @matthieudrula6yr 5 years ago | 6 comments

Just phoned my current business bank in the UK(cashplus), they told me that I need to be in the UK to keep using their account.
Can I open a new bank account in Colombia and use it to trade for my UK LLC?
I have seen this : Non UK resident banks
But many requirements to open those bank accounts (having a UK resident shareholder, coming back to the UK, making a deposit of 20K).

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Should I elect my LLC as an S-Corp for taxes, I'm a US citizen in Europe?


by @robetus6yr 5 years ago | 3 comments

I have an LLC formed in Portland, Oregon. I am the only member and do not ever plan on adding more members. Should I elect to have my LLC treated as an S-Corp for my taxes? I am a US citizen living in Europe but I do not qualify for the foreign income exclusion yet. Can anyone give advice that has made this election? I know that as an S-Corp I can pay myself a reasonable salary based on the companyโ€™s income and then pay the rest to myself in dividends that are exempt from certain taxes.

If I chose to pay myself 70% of the companyโ€™s income as my salary am I required to pay myself the other 30% in dividends or can I leave that 30% in the companyโ€™s coffers for legal fees, large chargebacks, and the like? Thank you for reading and with any help provided.

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Hi, I'm Manu, an accountant turned digital nomad and offshore tax expert. AMA!

 

by @xiufensilver7yr 6 years ago | 39 comments

Wonder how to do your taxes as a nomad? Ask your question now!

About Manu:
Today Iโ€™m here to clear any misunderstandings about international taxation for digital nomads. There is too much wrong, outdated and irrelevant information out there.

I will answer any general questions, relevant to the community as a whole. You are welcome to give your own situation as an example. If you are looking for personalized and actionable recommendations or referrals, please contact me or someone else you trust in this matter privately.

About myself: I learned accounting for 5 years in high school, but became more interested in international management and programming at university. I worked as a director and purchasing manager for a 100m+ private trust in Europe and Greater China. In 2013, I resigned from this position to have a better work-life balance and travel more. Since then I have spent most of my time in Asia doing consulting through various companies.

My latest project is a crowdfunding accelerator that will take place in Shenzhen, China later this year.

ASK AWAY!

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