Form LLC in USA that owns an LLC in Kazakhstan so the investors invest in a US entity. Crypto mining.

[resident101]

Hi all.

I want to start a crypto mining business in Kazakhstan. The labor is cheap, electricity is cheap, the business environment is pretty friendly, I speak the language.

In order to attract investors I would like to open an LLC/Corp in USA that would own the Kazakh company that does the mining.

I want the investors to be dealing and investing in a US company and not in a Kazakh company, it increases my credibility.

I am a non-resident alien, non-ETBUS, not green card, not US citizen. My nationality is EU. I know hot to open LLCs in the US I am just not familiar with this 2-layer structure.

Have you guys ever dealt with this structure? Would there be any complications with taxes?.. What if I sell assets in Kazakhstan, how would that impact my balance sheet in the US?

If you could point me in the right direction it would be great.

All the best

 

[Sols]

If you plan to raise money, go for a Delaware C Corp. LLCs are not suitable for fund raising and multiple investors. Delaware C corps are what 90%+ of US-based or US-wannabe companies use.

The Delaware company can own the Kazakh mining company directly and control it that way, and/or have a service agreement (with or without exclusivity).

Regarding taxes, speak with attorney/tax advisers. You need to navigate the tax laws of US/Delaware, Kazakhstan, and wherever you live.

Generally speaking, the Kazakh company would operate independently as its own business. It would remit profits to the US holding company, in line with the applicable rules and regulations in Kazakhstan and be received and taxable (if at all) in US federally or Delaware on a state level. The Delaware company might be considered tax resident where you live but I can't remember seeing this happen and for a company acting just as a holding company, with multiple investors, the risk is probably quite low.

 

[resident101]

Thank you for your reply @Sols !

Yes C-Corp in Delaware looks good, thanks for the suggestion.

I have another question, do you have an idea of how much it would cost quarterly to do taxes for a C-Corp that is moderately active? I saw something in the likes of 800 USD/Q and that's a lot. In this case I would just open an LLC and then convert it to a C-Corp when thing really take off, since in the 1st year it's likely that the company will be setting up and not much activity will take place.

Best!

 

[Sols]

It depends and varies a lot. If you want something dirt cheap, you can probably find someone who will do your accounting for under 100 USD/month if you barely have any activity at all. I've never looked for budget accountants in Delaware, though, so I'm not sure. I'd be worried about quality, especially if you plan to bring in investors. Investors won't accept sloppy books.

 

[resident101]

Fantastic, @Sols, thank you for your inputs! Will take a closer look at accountants in Delaware.

 

[tyrexoid]

You can try to use Stripe service for making a new LLC, it works well, I was able to register LLC (Delaware too, that's what they provide) and a bank account for it, fairly simple and cheap, it is just 500$ including first year of reporting, something like that.