Legal structures of a company in USA

In the US there are two important legal types of structures to choose from; LLC and Corporation.

 

Key information regarding a Corporation structure :

Shareholders completely insulated from liability if the corporation stays in compliance. Resident- and non-resident-owned corporations pay the same tax rate, although foreign-controlled corporations have to file extra information on their tax returns. Tax treaties were usually designed with corporations in mind, so many foreign-owned US companies are corporations. Shareholders are the owners. The shareholders elect the directors, who govern the corporation and set policies and goals, and review the activities and progress of the company. Directors appoint the officers, who run the corporation on a day to day basis. Only officers can bind the company and sign contracts.

 

Key information regarding a LLC structure :

Members are insulated if they are not managing the company as well, and follow proper procedure to separate personal and business matters. LLCs are fiscally-transparent by default, which can be a problem for non-resident-owned companies. An LLC can choose to be taxed as a corporation, but if they are planning to do this could just form a corporation instead.If the company will not be used to do business in the US, then an LLC is the better entity type. The treatment of distributions from LLCs to foreign owners may be hazy, so be careful of doing business in the US using an LLC. Members own the LLC, and control everything.

The Members create an Operating Agreement, which can be as long or short as the Members want, and which sets out all the rules of the company. The Members can appoint Managers to run the company on a day to day basis. If there are many Members, appointing Managers is a wise thing in order to control the structure (and spending) of the LLC.

 

How is it treated from tax perspective?

US tax law grants a classification option for some specific legal forms. This is exercised by ticking the tax form 8832 and is also referred to as the “check-the-box” procedure. It is possible to choose between three types of taxation : 1. As corporation, subject to US corporation tax, 2. The partnership (LLC), then the profit shares are subject to income tax, 3. In case of a one-person LLC as a “disregarded entity” in which the taxation is immediate takes place at the shareholder.

 

Major advantages for incorporating in USA

• - Quick account opening - physical presence required
• - Virtual office in Las Vegas, New York or Chicago

 

The biggest mistakes when starting a company abroad

Not all topics related to founding a company abroad are always free of prejudices and false information that have prevailed over the years. We give you an overview of the most important questions about founding a company abroad.

Founding a company abroad as a citizen of another country is legal?

Founding a company abroad as a citizen of another country is legal?

Yes, in most countries foreigners can be sole shareholder of a local entity.

Do you have to live in the country where you start a company?

Do you have to live in the country where you start a company?

No you can set up a company anywhere in the world, as long as the country in question allows you, as a foreigner, to acquire shares in local companies. If this is not the case, trustees can be used. Freedom of establishment applies within the European Union. However, it is important that the management takes place locally, in the country in which the company is registered. In addition, a permanent establishment must be set up. Without this, a German tax office will not recognize the company and, in the worst case, would demand back payment of corporate and trade taxes plus late payment penalties. We rent you a real office and set up a permanent establishment that meets all requirements without a doubt. In addition, we have real managing directors who run companies in the home country and are resident there.

Problematic law firms: closure is made more difficult

Problematic law firms: closure is made more difficult

Some law firms tie clients with gag contracts and apply pressure when the client wants to close their business. If you are a client of a law firm that has set up a legally unsound company for you, you make yourself vulnerable to blackmail. Because in the event of a tax problem, law firms without a license are not bound by a duty of confidentiality.

Changing offices is made more difficult

Changing offices is made more difficult

We receive many inquiries from customers who already own a foreign company and are looking for a new law firm. Switching to us is then often made more difficult. So horrendous final bills are made, which have to be paid before a change is possible. Therefore we have developed a trust principle. If you are not satisfied with us and want to switch, you can do so at any time. You will receive the necessary documents (resignation letter) from us in a standardized form after the foundation. This protects you from unexpected costs and you are free to go to another law firm at any time. So far we have not lost a client to another law firm.

Privacy Policy/Office Location

Privacy Policy/Office Location

Your accounting documents are safe with us. In addition, all electronic data is only stored in encrypted form and apart from us, who are bound by professional secrecy, no one has access. All accounting documents are also only stored locally. Neither authorities nor hackers can access this data.

No taxes?

No taxes?

There are certainly locations in the world that do not charge any taxes to companies and private individuals or only charge a very low flat-rate tax. However, this can rarely be used without a corresponding change of residence. If you are resident in Germany, the relevant double taxation agreement is decisive. Providers who promise otherwise will tempt you into tax evasion, which is usually severely punished if discovered. We advise you not to set up companies in countries that have already been blacklisted by the OECD. The foundation is usually very cheap, but the tax consequences in Germany can be devastating. Since the introduction of the automatic exchange of information between almost all major countries, an anonymous account or company no longer exists.