A US-based LLC can have great tax advantages, especially for foreign entrepreneurs abroad. Even for US taxpayers, LLC taxes can be favorable. An LLC i

US LLC Taxes – A Potential Tax Haven For Foreigners, And Still A Good Option For US Taxpayers

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2022-01-20 13:30:08

A US-based LLC can have great tax advantages, especially for foreign entrepreneurs abroad. Even for US taxpayers, LLC taxes can be favorable.

An LLC is a pass-through tax entity. What this means is that the LLC is not taxed directly. Instead, the profits and losses of the business pass through to its owners, who report them on their personal tax returns.

A little known fact is that the US can be one of the biggest tax havens in the world. A US LLC opened by a non-US citizen or nonresident can arguably allow for earnings that are not taxed in the US.

Effectively, foreigners are only subject to US tax if they are “engaged in a trade or business in the United States” (ETOB). If your business is not ETOB, even if it generates income in the US, the income is not taxed in the US.

(1) you have at least one “dependent agent” in the US, which are employees or companies that work for you almost exclusively, and