Foreign Owned Single Member US LLC for IT Services

[signal11]

Hello,

First of all, thanks for the forum. I've learned impressive stacks I had never heard of before. I've also read through the forum to find similar cases to my case. Nevertheless, I have some questions about my stack.

I plan to have a Wyoming LLC (foreign-owned single-member LLC) for professional IT services (including getting crypto payments from my clients for crypto-related development services) and keep it non-ECI non-ETBUS. We are talking about 50-100k per year revenue.

1. As far as I understand, US banks (Mercury specifically) don't comply with CRS. Is this still true?
2. Can I open a company account at the Mercury (Especially asking for non-ECI, non-ETBUS company)? Does having a bank account create any ETBUS?
3. I plan to have an iPostal1 virtual address for business purposes. Is it okay to use that US address with IRS filings? Does the address create any ETBUS?
4. At Form 5472 under the "Principal country(ies) where business is conducted" section, I'm planning to declare "TR" to support my non-ECI non-ETBUS status. Is this appropriate?
5. Also, does the IRS inform TR about those filings?
6. And what are the chances of getting into audit just because of being a non-ETBUS tax-free company?
7. Let's say I had to invoice a US customer and do ETBUS. Can I file that part as ECI on my returns and keep my overseas operation separately tax-free in the same LLC?
8. Can I convert my company cash from payments to crypto (mostly stablecoin) and keep it as crypto within the company? Does this exchange create any tax liabilities? Is it okay to withdraw crypto as profit distribution? Are they still considered tax-free?
9. Are there any reporting requirements for crypto holdings at the company level or my 1040-NR?

Please let me know if you want to know any further details. I really appreciate any help you can provide.

 

[Cloudbanck]

2) Mercury since recently will ask if you have investors, employees, locations, suppliers, or customers in the US. If you are a Mercury client and you say no to everything, they ll let you stay a client for 2 years, but after that you are out. If you are opening an account, they might only accept you if you answer yes to some of these. Having a US Bank account does not create ETBUS.

3) Yes, you have to have a US address for your US LLC. The address does not create ETBUS.

4) If you live and run the business from Turkey, that's appropriate yes.

5) Probably not. FATCA has some bi-directionality, but it seems the US only shares info with a limited set of countries - doubt Turkey is on the list, and seems it doesnt apply to company accounts anyway, see this thread The USA will not provide its ‘reciprocal’ FATCA partners any information about...

6) You dont get audited just because being non-ETBUS, there must be other factors.

7. You dont become ETBUS just because you have a US customer. You must have employees or a physical office in the US, or be a lot in the US yourself. See US LLC for Non-US Residents (Foreigners) 2023 Guide

Addition on 5), this a more detailed thread of the IRS sharing info with foreign governments. Turkey is actually on the list since 2021, but seemingly only for multinational groups, Do I understand that US financial institutions DO NOT report non-us person deposits in them?

IRS list of countries they report to, with links to agreements: Country-by-Country Reporting Jurisdiction Status Table | Internal Revenue Service

 

[signal11]

Thank you very much for the detailed answer.

2) Mercury since recently will ask if you have investors, employees, locations, suppliers, or customers in the US. If you are a Mercury client and you say no to everything, they ll let you stay a client for 2 years, but after that you are out. If you are opening an account, they might only accept you if you answer yes to some of these. Having a US Bank account does not create ETBUS.

So, shall we become ETBUS to stay with them, or few US clients are enough for them? Sorry, I haven't seen the questions, but I assume.

7. You dont become ETBUS just because you have a US customer. You must have employees or a physical office in the US, or be a lot in the US yourself. See US LLC for Non-US Residents (Foreigners) 2023 Guide

I know it is vogue, but is there any guess for what percentage of US income creates ETBUS and ECI? (Let's say they are not regular nor continuous)


For others, I am still looking for answers to the 8th and 9th questions. Thanks.

 

[Cloudbanck]

So, shall we become ETBUS to stay with them, or few US clients are enough for them? Sorry, I haven't seen the questions, but I assume.

No need to become ETBUS, it s sufficient for Mercury to have some US providers and at least one US client.

I know it is vogue, but is there any guess for what percentage of US income creates ETBUS and ECI? (Let's say they are not regular nor continuous)

You can have 100% of your clients in the US (including regular clients) and still not be ETBUS. See the startfleet.io link.

 

[signal11]

Can I convert my company cash from payments to crypto (mostly stablecoin) and keep it as crypto within the company? Does this exchange create any tax liabilities? Is it okay to withdraw crypto as profit distribution? Are they still considered tax-free?

Are there any reporting requirements for crypto holdings at the company level or my 1040-NR?

Still looking for these.