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Offshore companies in USA

To set up an offshore companyor relocate your existing business overseas is a crucial step toward internationalizing yourself and your assets. Search for “offshore company” and you’ll find thousands of websites promising a quick company formation in Panama or the British Virgin Islands, with a range of other “benefits” for the jurisdiction in question.

There is a current misconception that offshore business is about evading taxes and hiding money from the government, which is certainly not the case.

There are 100% legitimate ways to structure your business interests overseas and realize significant benefits from an asset protection standpoint — as well as tax-standpoint.

Want an example? The last few years Google has cut its taxes by $3.1 billion in totally legitimate ways.

You too can do this.

Some say this is unethical and cheating, but not surprisingly, those who say this are most often not the same people as those who create value in society. If you’ve found your way to this page, chances are strong that you’re a value creator and want to keep more of the money you get back as a result of creating value.

Tax Advantages With Offshore Business

First of all, you don’t have to start a company offshore to save on taxes — just moving out of the US is a terrific first step. As a US expat, the first $91,500 in overseas income is tax exempt, meaning if you live outside the US you don’t have to pay any taxes at all on the first $91,500 of foreign sourced income (you still have to file your tax report though).

However, the real tax advantage from running an offshore company as a US citizen doesn’t come from direct tax savings. It comes from tax deferment, meaning you postpone the payment of taxes into the future. If you run a business overseas and reinvest profits within the company you can defer taxes indefinitely.

Let’s say you have a profitable company overseas. Now imagine that instead of paying taxes on your profits every year you can reinvest that capital in your offshore company every year for 30 years, and only pay taxes if you decide to sell the company after 30 years. Being able to reinvest your capital tax free combined with the power of compound interest makes this a truly exceptional opportunity.

Offshore Internet Business: Incorporating A Truly Global Business

It is a great idea to structure your business overseas, especially one that’s online-based. If you incorporate your foreign business properly, it provides a legal way to defer tax payments (similar to an IRA), as well as enabling much reduced liability.

An online business has no limits as to how and where it can do business, so why should you let your business be limited by a jurisdiction that is based on the old, geographically limited model?

Starting an offshore online business is a great way to build streams of income outside of your home country. Why would you want to have income streams outside of your country? Well, when inflation runs rampant in a country, having an income stream overseas in a stronger currency can potentially be a lifesaver. If hyperinflation would find its way to your country, which is a real risk with central banks all around the world is printing new money 24/7, earning only a small part of your income in a different country is invaluable.

An internet business based overseas, coupled with an offshore bank account, is the perfect medium through which you can do this.

Offshore Company Formation: Ins and Outs

There are dozens of jurisdictions, such as Hong Kong, Singapore and the British Virgin Islands that offer a great business environment with fully legal tax benefits.

The most important thing that you MUST do is ask for advice from a qualified tax attorney (someone who understands international tax law) in your home country. Additionally, learn enough to understand the benefits of particular offshore jurisdictions.

After you’ve done your due diligence, it’s possible to go through the whole incorporation process online in most jurisdictions, and you can often set up your offshore company in as little as a few days. You often start the process with registering a company name and sending in the right documentation. The next step, after incorporation, is often to open a bank account or merchant account for your business.

USA COMPANY FORMATION

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Non-resident US LLCs still maintain popularity on the market, for example as offshore holding companies or for international trading. If you want to expand your business to the United States, whether to run an internet-store for US based clients or open an art gallery in the Chicago area, an onshore resident structure must be established. US companies that partially conduct business in the United States turn to be a beneficial trading vehicle with liable presence in USA and US bank account. Moreover,  upon smart structuring non-US source income will not be subject to US federal tax.

One must distinguish non-resident LLCs and resident LLC:

Non-resident LLCs:

  • Have non-resident owners
  • Have non-US source income
  • The US federal income tax is avoided
  • File Report of Foreign bank and financial accounts (FBAR) and/or other reports if required, for example The Foreign Account Tax Compliance Act (FATCA)
  • Unlikely to open US bank account

Resident LLCs:

  • May have non-resident owners
  • Fully or partially conduct business in USA – have US clients, venders, etc.
  • Pay federal income tax on US-source income
  • Maintain bookkeeping as per US accounting standards
  • Can open US bank account.

If you wish to set-up a resident structure with US bank account, please provide us answers to the questions in „Popular Applications” sections.

POPULAR USA COMPANY APPLICATIONS

Non-resident LLC companies can be used as tax-transparent entities for holding and international trading purposes. Although it must be noted that it is becoming more and more challenging to open a bank account for those.

Resident LLC features advantages of territorial taxation whereas only US-source income is taxed after deducting of administration expenses.

We can assist in setting-up your presence in the United States. To obtain an initial, free of charge consultation on your set-up requirements, it is essential we receive your answers to the following questions:

  • What is the nature of the operations?
  • Does the Company plan to have employees, maintain inventory or / and occupy a facility in the US?
  • How does the Company plan to sell into the US?
  • In which country or countries do the shareholders reside?
  • What country / countries does the company currently operate in?
  • What is the company’s long and short term plan for cash profits generated in the US?
  • If a business plan with financial projections exist, please provide a copy

We provide the following services for US onshore companies:

  • Formation of a legal entity. Typically such entities are formed in the state of Delaware
  • Establishing a bank account and merchant account (no visit required)
  • Preparation of a shareholder agreement (if required)
  • Implementation of the US foreign structure
  • Preparation of US Corporate tax returns (annually)
  • Bookkeeping services for US company

 

USA COMPANY TAXATION

Non-resident LLCs that have non-resident partners and trade purely outside the US generally are not required to file federal or state income tax return. Although abbreviated reports may be required in some states, for example Maryland. As well particular IRS reports for non-resident entities such as FBAR (if bank account balance exceeds USD10,000 at anytime) and/or The Foreign Account Tax Compliance Act (FATCA).

We can assist overseas clients in obtaining tax id numbers (Employer Identification Number), and in preparing and filing annual trading accounts for any type of US LLC structure – trading solely outside of the US, trading in US or hybrid LLCs that have both US and worldwide income.
Companies that are set-up as resident entities and conduct business in United States are subject to US federal tax and must file US tax returns.

 

Belize offshore company formation 

Delaware offshore company formation 

 

 

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