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Many US non-residents are forming companies
in the United States, some of which are operating
within the country, others of which are operating
entirely outside. With the proliferation of
the Internet, many non-US citizens are forming
US companies to own their web sites even though
they have no tangible connection with the US
other than the registration of their company.
In general, there are no citizenship or residency
requirements to forming a company in the US.
However. there are several factors that should
be considered.
NOTE: Most states will not require disclosure
of Director information at the time of formation
but almost all will ask for this information
at the time of filing the next year's Annual
Report. Please ask about our Nominee Services
if appropriate.
PASS-THROUGH TAXATION:
For many people, passthrough taxation, or the
ability to have their entity treated as a non-tax-paying
(transparent) entity is important. For US non-residents,
use of an S Corporation is not possible because
one of the requirements of becoming an S Corporation
is that all shareholders must be US residents.
This objective can be achieved by forming a
Limited Liability Company (LLC) instead of a
corporation. (See Corporation
v LLC.)
TAXED AS PARTNERSHIP OR CORPORATION:
The LLC can, with the filing of it's Application
for Employer Identification Number (TaxID),
elect to be taxed as either a partnership or
a corporation. This election, with certain restraints,
may be changed in subsequent years.
FILING A US RETURN:
For a corporation formed in the US, there is
an absolute requirement that it file a US tax
return regardless of whether there is US income.
In contrast, the LLC is taxed as a partnership
and the partners (principals) must file and
pay individual US taxes only if they operate
a trade or business in the US or if they have
US-source (effectively-connected) income.
MIXED US AND NON-US SOURCE INCOME:
In this situation, it will usually also be more
advantageous to form a Limited Liability Company
instead of a corporation. With a US corporation,
it is taxable on its global income whereas the
LLC will be taxed as discussed above.
APOSTILLE:
An Apostille is a seal legalizing a public document
for use in international transactions according
to the Hague convention. Many countries will
require that official documents created in another
country bear an Apostille as evidence that they
are what they purport to be.
WHERE TO FORM YOUR COMPANY:
In the US, you can create your company in any
state you choose. If you plan to eventually
have an office in the US, it may be cost-effective
to form your company in that state. The majority
of US non-residents without a strong reason
to form in any given jurisdiction choose Delaware
or Nevada because of their business-friendly
environment and easy compliance requirements.
WHAT'S MY ADDRESS?
Every state will require a Registered Agent/Registered
Office with an address in that state for receipt
of service of process or other official communications.
We will serve as your Registered
Agent / Registered Office. However,
this is not your business address or mailing
address which can generally be anywhere you
wish. Please remember NOT to use your RA/RO
address for anything other than official purposes
as described above.
NOTE:
In many cases, you may have other factors which
will strongly compel the choice of a corporation
instead of a Limited Liability Company in your
choice of structure. For example, you may want
to unequivocally establish tax residency in
the US. Or you may be planning to sell stock
to investors or eventually plan for an Initial
Public Offering (IPO.)
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