Costa rica Residence + New Mexico LLC

[Lucas32]

Hi Guys,
I want to ask about my actual set-up, i'm not US Citizen nor US Resident, I just had my residence in Costa Rica and I am going to form an LLC in New Mexico (as we all know for privacy and it is the cheapest and there is only one form to declare annually)

The purpose is to sell online using woocommerce store (Server in EU), the goods are stored in a third country (Not US & Not Costa Rica)

As you may know Costa Rica is a country with territorial taxation, but not that simple, so I know also that i will need an employee outside of CR to justify that the job is not made from CR

My questions

1 - I don't know if I will have to pay taxes for what I generate with the LLC (clients are from all over the world except US and CR)?

2 - What type of bank do you recommend (I already have a history of founding companies and businesses in Spain and in an Asian country) and in USD?

3 - Is it possible to incorporate another type of business in the statutes of the company, example: e-Commerce, Oil and Gaz Consulting, IT all together?

4 - I know that for whatever reason there is no business or movement using the LLC, the company remains alive, i will only have to present the form 547, but what about the bank account, if the bank does not see movements, for example, 1 year, it will proceed to close the account ?

4 - Is it easy to dissolve the company ?

Thank you

 

[troubled soul]

1 - I don't know if I will have to pay taxes for what I generate with the LLC (clients are from all over the world except US and CR)?

Whether you will have to pay taxes for what you generate with the LLC will depend on the specific laws of Costa Rica. However, as you mentioned, Costa Rica has a territorial taxation system, which means that you will only be taxed on income that is generated in Costa Rica. If your LLC is selling online to customers all over the world, and the goods are stored in a third country, then it is likely that you will not have to pay any taxes in Costa Rica. However, you should consult with an accountant or tax advisor to get specific advice on your situation.

2 - What type of bank do you recommend (I already have a history of founding companies and businesses in Spain and in an Asian country) and in USD?

HSBC or CITI bank

3 - Is it possible to incorporate another type of business in the statutes of the company, example: e-Commerce, Oil and Gaz Consulting, IT all together?

Yes, it is possible to incorporate another type of business in the statutes of the company. For example, you could incorporate an LLC that is involved in e-commerce, oil and gas consulting, and IT. However, you should consult with an attorney to make sure that the statutes are drafted correctly.

4 - I know that for whatever reason there is no business or movement using the LLC, the company remains alive, i will only have to present the form 547, but what about the bank account, if the bank does not see movements, for example, 1 year, it will proceed to close the account ?

If there is no business or movement using the LLC, the company will remain alive, but you will only have to file the form 547. However, if the bank does not see any movements in the account for a period of time, they may close the account. You should check with the bank to find out their specific requirements.

- Is it easy to dissolve the company ?

Yes, it is relatively easy to dissolve an LLC in New Mexico. You can do this by filing a Certificate of Dissolution with the Secretary of State. You will also need to close the bank account and notify any creditors.

 

[Lucas32]

Thank you so so much azb1

 

[SimpleGuy]

Hi Guys,
I want to ask about my actual set-up, i'm not US Citizen nor US Resident, I just had my residence in Costa Rica and I am going to form an LLC in New Mexico (as we all know for privacy and it is the cheapest and there is only one form to declare annually)

The purpose is to sell online using woocommerce store (Server in EU), the goods are stored in a third country (Not US & Not Costa Rica)

As you may know Costa Rica is a country with territorial taxation, but not that simple, so I know also that i will need an employee outside of CR to justify that the job is not made from CR

My questions

1 - I don't know if I will have to pay taxes for what I generate with the LLC (clients are from all over the world except US and CR)?

2 - What type of bank do you recommend (I already have a history of founding companies and businesses in Spain and in an Asian country) and in USD?

3 - Is it possible to incorporate another type of business in the statutes of the company, example: e-Commerce, Oil and Gaz Consulting, IT all together?

4 - I know that for whatever reason there is no business or movement using the LLC, the company remains alive, i will only have to present the form 547, but what about the bank account, if the bank does not see movements, for example, 1 year, it will proceed to close the account ?

4 - Is it easy to dissolve the company ?

Thank you

LLCs are "pass-through entities", therefore transparent entities. Corporate taxation takes place at the level of the owner of the LLC, in the owner's country of residence. The LLC is deemed tax resident in the owner's country of residence, so in your case, Costa Rica, at a rate of 30%.

If Costa Rica finds out, they will tax you on all of the LLC profits, because there is no distinction between you as a person and the LLC.

If you want to stay in Costa Rica, forget LLCs and offshore companies. You need a real company, which is tax resident in a country that has 0% tax. For example, Bahamas, Vanuatu, Anguilla, BVI, Cayman Islands. For more security, take a local employee to justify that you have a reason to be in this country other than generous taxation.

 

[JustAnotherNomad]

Just to add, LLCs can also have tax obligations in other countries. For example, if there is an office in the US, then the profit of this office would also be taxed in the US, even if the owner was properly living in a tax-free country.

 

[Lucas32]

LLCs are "pass-through entities", therefore transparent entities. Corporate taxation takes place at the level of the owner of the LLC, in the owner's country of residence. The LLC is deemed tax resident in the owner's country of residence, so in your case, Costa Rica, at a rate of 30%.

If Costa Rica finds out, they will tax you on all of the LLC profits, because there is no distinction between you as a person and the LLC.

If you want to stay in Costa Rica, forget LLCs and offshore companies. You need a real company, which is tax resident in a country that has 0% tax. For example, Bahamas, Vanuatu, Anguilla, BVI, Cayman Islands. For more security, take a local employee to justify that you have a reason to be in this country other than generous taxation.

https://dictionary.cambridge.org/dictionary/english/crystal-clear​

CRYSTAL CLEAR, Thank you

Just to add, LLCs can also have tax obligations in other countries. For example, if there is an office in the US, then the profit of this office would also be taxed in the US, even if the owner was properly living in a tax-free country.

ah yes this i know, thanks

 

[Deepbarrels]

Whether you will have to pay taxes for what you generate with the LLC will depend on the specific laws of Costa Rica. However, as you mentioned, Costa Rica has a territorial taxation system, which means that you will only be taxed on income that is generated in Costa Rica. If your LLC is selling online to customers all over the world, and the goods are stored in a third country, then it is likely that you will not have to pay any taxes in Costa Rica. However, you should consult with an accountant or tax advisor to get specific advice on your situation.

I believe that if he is a resident of CR, he has to pay tax on worldwide income. source: https://www.roberthalltaxes.com/blog/news/tax-guide-for-americans-living-in-costa-rica/

Costa Rica taxes residents on their global income. For the 2023 tax year, the progressive tax rates for residents are:
​

Earnings in CRC	Tax Rate
0 to ₡929,000	Exempt
₡929,000.01 to ₡1,363,000	10%
₡1,363,000.01 to ₡2,392,000	15%
₡2,392,000.01 to ₡4,783,000	20%
Over ₡4,783,000	25%

​

Non-residents’ salaries and self-employment income are taxed at flat rates of 10%, 15%, or 25%, depending on the income type.​

 

[Deepbarrels]

LLCs are "pass-through entities", therefore transparent entities. Corporate taxation takes place at the level of the owner of the LLC, in the owner's country of residence. The LLC is deemed tax resident in the owner's country of residence, so in your case, Costa Rica, at a rate of 30%.

If Costa Rica finds out, they will tax you on all of the LLC profits, because there is no distinction between you as a person and the LLC.

If you want to stay in Costa Rica, forget LLCs and offshore companies. You need a real company, which is tax resident in a country that has 0% tax. For example, Bahamas, Vanuatu, Anguilla, BVI, Cayman Islands. For more security, take a local employee to justify that you have a reason to be in this country other than generous taxation.

What about if the person has residency in Panama and stays in Costa Rica on a tourist visa. Does Panama treats US LLC the same way as Costa Rica? And does Costa Rica taxes tourists at some points who do visa run and stay in Costa Rica more than 183 days/year?

 

[aniglo22]

What about the digital nomad visa in costa rica ? You are exempt from paying income tax and import tax

 

[mraleph]

I believe that if he is a resident of CR, he has to pay tax on worldwide income. source: https://www.roberthalltaxes.com/blog/news/tax-guide-for-americans-living-in-costa-rica/

Costa Rica taxes residents on their global income. For the 2023 tax year, the progressive tax rates for residents are:



​

Earnings in CRC	Tax Rate
0 to ₡929,000	Exempt
₡929,000.01 to ₡1,363,000	10%
₡1,363,000.01 to ₡2,392,000	15%
₡2,392,000.01 to ₡4,783,000	20%
Over ₡4,783,000	25%

Non-residents’ salaries and self-employment income are taxed at flat rates of 10%, 15%, or 25%, depending on the income type.​

It's contradictory

Costa Rica taxes residents on their global income

vs

Costa Rica operates on a territorial tax system

All details about Costa Rica's income tax at

https://taxsummaries.pwc.com/costa-rica/individual/income-determination

where income is taxed when earned abroad only if it's related to Costa Rica.

 

[Deepbarrels]

It's contradictory

Costa Rica taxes residents on their global income

vs

Costa Rica operates on a territorial tax system

All details about Costa Rica's income tax at

https://taxsummaries.pwc.com/costa-rica/individual/income-determination

where income is taxed when earned abroad only if it's related to Costa Rica.

ok but if its not taxed in the US since its pass through, and you live in Costa Rica.. I don't know.. seems sketchy a little. Maybe someone here has more experience with this kind of setup..?

 

[AlicaFunk]

LLCs are "pass-through entities", therefore transparent entities. Corporate taxation takes place at the level of the owner of the LLC, in the owner's country of residence. The LLC is deemed tax resident in the owner's country of residence, so in your case, Costa Rica, at a rate of 30%.

this should be pinned on all US LLC related threads, it is one of the most sked and misunderstood questions on OCT.