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Digital Nomad / Perpetual Traveller - 0% tax with US LLC

#21
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rowena said:
@orangekangaroo
I didn't write it for specifically Cyprus residents. This kind of setup works well if you're a resident of a tax-free country. For example, US LLC or UK LLP + UAE Resident owner = tax free setup but you need have no business activity in the US or UK(you can sell to US or UK).
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But you replied to this answer.

If your income comes from US sources and your LLC is one member you pay taxes for the income earned from US sources regardless of where you are staying. If your LLC is two members any income received is taxable.

This is what happens when you have two members of an LLC. I think a lot of us know what an LLC can do when you have one member.

UAE resident owner has to stay 183 days to meet tax residency requirements. We are talking about a setup for digital nomad and Cyprus comes up with its 60-day tax residency requirement for EU citizens.
 
#22
orangekangaroo said:
If your income comes from US sources and your LLC is one member you pay taxes for the income earned from US sources regardless of where you are staying. If your LLC is two members any income received is taxable.
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No.

Non-US citizen or resident can set up a Wyoming LLC and sell your products to US people, it will not create any tax liability in the US. Wyoming LLC is a tax-neutral structure. It does not matter the count of the members. If you open a store, hire an employee or manufacture your product in the US then it will create US tax liability.
 
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#23
Agreed with rowena, you don't have to pay US taxes if you sell to US customers. You pay US taxes only if your income is effectively connected with a trade or business in the United States (ETBUS). Selling to US customers doesn't create ETBUS no matter how many members LLC has. LLC can pay US taxes if it chooses to be taxed as C-corp, which almost no one chooses to do.
 
#24
nardulfo said:
I'll only invest in crypto. Regarding banks, I can say that I'm travelling which is true or I can provide new residence data such as utility bills. All my money is from legit sources which I can prove without any issues I don't see why the bank would ask again what country I'm a tax residence of (All my bank accounts are already opened).


According to Spain tax Agency, and a supreme court ruling 183 days rule is the only thing that matters (aside spouse and children which I don't have).
Hacienda IRPF Rule (Spanish tax agency)
Supreme Court ruling (Spanish)


There's no law stating that I have to be a resident in another country to not be considered a tax resident in Spain, so what are the legal grounds to do so?
If I get arrested which I won't because I won't do anything illegal in any country I'll call a lawyer I won't call any embassy I don't trust corrupt governments.


I have international health insurance, and also Argentina citizenship and there's public healthcare there (I'll use international health insurance though)

Thanks for all the comments, what's the best EU country to live with a US LLC and have a reduced tax bill (5-10%)?
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where did you get intl insurance? I want one too
 
#25
orangekangaroo said:
Cyprus has a good setup for guys like you. You only need 60 days to become tax resident. This is to keep Spain or any other country of your back as long as you do not spend 183 days there. It will cost a bit to setup though. Cyprus company to get yourself employed in Cyprus. Another offshore company to turn your Florida LLC income into dividends. Dividends are slightly taxed in Cyprus at 2.65%.

As your Cyprus company will pay you a minimum wage 10K, you will pay social security contributions of about 2500. You will also need a permanent address.

Benefits are you are getting basic healthcare, your international healthcare insurance costs drop considerably.
The EMIs will eventually start questioning your source of funds and where you pay tax. They will want to see a tax certificate.

As for the countries you travel to, just stay in AirBnBs and be the tourist.
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social security contributions of about 2500.
200 euros per month can buy you a super global medical insurance :)
 
#26
This is from another blog and it explains well why an LLC does not work with Portugal and Cyprus with the Non-dom option. This is for Cyprus and Portugal only.

Finally, we would like to clarify an important point which is often misunderstood and could potentially cause enormous tax damage: the tax status of an LLC in combination with residencies where dividends are tax-free.

Cyprus and Portugal with their respective non-dom and NHR programs are some of the most popular places to have tax residency in the European Union. These programs offer complete tax freedom on any dividends received (dependent on meeting certain requirements, of course).

Unfortunately, an LLC does not distribute dividends unless it operates as a C-Corporation, in which case it loses all of its tax advantages and dividends are subject to heavy withholding taxes.

An LLC is considered a “Disregarded Entity for Federal Tax Purposes” and is therefore fiscally transparent. That is to say, the owner pays income tax in the country where he has his tax residency. The problem with Portugal and Cyprus is that the personal income tax to be paid can rise considerably.

If you’ve been paying attention, you’ll say, okay, but this problem can be solved by having a tax-free offshore company which owns the LLC. The LLC’s income goes to the offshore company and from there is distributed as dividends to all the partners. After all, there are still enough offshore jurisdictions which are tax-free, despite the annoying guidelines on economic substance.

The problem with this is that the US LLC is only considered “disregarded” while it’s owned by a single individual. An LLC can have as many managers as it wants, but there can only be one owner, if not it will lose its special status and will have to pay taxes in the USA.
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#29
Currently doing some research for a friend who wants to establish a LLC. I noticed the IRS form 5742 asks for

1. A foreign taxpayer identification number (FTIN)
2. A country(ies) under whose laws the related party files an income tax return

While my friends definitely wants to establish a tax residence somewhere in the future, he wants to go fully nomadic for a year or two. Theoretically he won’t have a FTIN or tax residence during that time. What is he supposed to fill in the form then?
 
#30
rowena said:
@orangekangaroo
I didn't write it for specifically Cyprus residents. This kind of setup works well if you're a resident of a tax-free country. For example, US LLC or UK LLP + UAE Resident owner = tax free setup but you need have no business activity in the US or UK(you can sell to US or UK).
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I get that all, it is the Digi Nomad / PT stuff that does not work with an UAE company. UAE is 183 days. I would use a Panama residency setup with territorial tax and only 1 day a year needed for tax residency.
 
#31
orangekangaroo said:
I get that all, it is the Digi Nomad / PT stuff that does not work with an UAE company. UAE is 183 days. I would use a Panama residency setup with territorial tax and only 1 day a year needed for tax residency.
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How about Paraguay tax residency..?
I understand you dont really need to be there, ever
 
#32
orangekangaroo said:
I get that all, it is the Digi Nomad / PT stuff that does not work with an UAE company. UAE is 183 days. I would use a Panama residency setup with territorial tax and only 1 day a year needed for tax residency.
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Are you sure only 1 day/year for tax residency ? I think it is only to keep your residence card but not tax residence
 
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#33
Piano said:
Are you sure only 1 day/year for tax residency ? I think it is only to keep your residence card but not tax residence
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The before mentioned is not right. To keep the residence visa active and with that the bank accounts active - you have to be in the UAE 1 day in 6 months. Because of the residence visa the local banks consider you as resident and no CRS reporting happens that's why the peaople get away with it even if they don't spend time here to get the tax certificate.
Same goes for Panama. Maybe one day less to be there within one year but for sure you don't get a tax certificate just for staying 1 day there. In theory the banks in Panama consider you a resident as well an no CRS but in pratice it's close to impossible to get a Panama bank account if you don't stay there the whole year - that said keep the bad reputation of Panama in mind. You won't have any fun transfering money around with a bank account in Panama.
 
#35
Fred said:
The before mentioned is not right. To keep the residence visa active and with that the bank accounts active - you have to be in the UAE 1 day in 6 months. Because of the residence visa the local banks consider you as resident and no CRS reporting happens that's why the peaople get away with it even if they don't spend time here to get the tax certificate.
Same goes for Panama. Maybe one day less to be there within one year but for sure you don't get a tax certificate just for staying 1 day there. In theory the banks in Panama consider you a resident as well an no CRS but in pratice it's close to impossible to get a Panama bank account if you don't stay there the whole year - that said keep the bad reputation of Panama in mind. You won't have any fun transfering money around with a bank account in Panama.
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What issues would you have with Panama banks in specific ?
 
#36
Piano said:
What issues would you have with Panama banks in specific ?
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Go and send from Panama bank account to somebody in Europe and see how the receiver bank asks questions, rejects the transfer or simply closes the bank account. Panama has very bad reputation and beside of that it's close to impossible to open an account or to bank with the banks in Panama. High fees - not transactional at all. Just search the forum for user expereince with Panama banks and you will see.
 
#37
Fred said:
Go and send from Panama bank account to somebody in Europe and see how the receiver bank asks questions, rejects the transfer or simply closes the bank account. Panama has very bad reputation and beside of that it's close to impossible to open an account or to bank with the banks in Panama. High fees - not transactional at all. Just search the forum for user expereince with Panama banks and you will see.
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I get that, and I get that you are promoting Dubai. I think the Panama set up in this thread was all about being a perpetual traveller with a US LLC. The Panama company is just setup to meet the friendly nations visa requirements, there will not be massive transacting or non at all. The US LLC will have a US bank account, all you need is a reputable bank elsewhere to receive your personal income. Panama banks play absolutely no role in this whatsoever. You keep the residency alive as you would in Dubai, that is all. With Panama 1 day every year, if you do so over the new years period, one trip every two years.
 
#38
orangekangaroo said:
I get that, and I get that you are promoting Dubai. I think the Panama set up in this thread was all about being a perpetual traveller with a US LLC. The Panama company is just setup to meet the friendly nations visa requirements, there will not be massive transacting or non at all. The US LLC will have a US bank account, all you need is a reputable bank elsewhere to receive your personal income. Panama banks play absolutely no role in this whatsoever. You keep the residency alive as you would in Dubai, that is all. With Panama 1 day every year, if you do so over the new years period, one trip every two years.
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The point is the non-resident banking. What you mention is good in theory. Try and find a bank outside Panama that is willing to take you with Panama residence.

Keep us updated.
 
#40
orangekangaroo said:
With being a Perpetual traveller, I am sure people can set up a variety of personal banks accounts. That is the least of my worries.
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Keep us updated. I'm very interested about the banks that will onboard you with Panama residence.
 
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