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Wyoming LLC —> Avoid Tax?

banafinfodafuggiano

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Jun 18, 2020
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I am a resident of a rich country.

To avoid paying 40%+ tax on my online income (e-commerce) I was thinking about opening an LLC in Wyoming since my customers are non US residents (and me too) and therefore there is no income tax on foreign sourced income.

My questions are:

1) Can I buy things with the bank card of my LLC in my residence country? For example paying rent on name of the company, rent cars, pay flight tickets, etc...

2) The LLC company would be anonymous in any case. Will I still need to report this company and company income even if 0% taxes, to my home residency country?

3) what is the best way of getting paid to my personal account of my residency country and pay taxes only on these transfers?
 
1) Can I buy things with the bank card of my LLC in my residence country? For example paying rent on name of the company, rent cars, pay flight tickets, etc...
Yes, you can, but it doesn't become any less of a taxable income.

2) The LLC company would be anonymous in any case. Will I still need to report this company and company income even if 0% taxes, to my home residency country?
The company will be tax resident where you live and be required to pay taxes like any other local company.

Start researching terms like tax residence, substance requirements, and permanent establishment.

3) what is the best way of getting paid to my personal account of my residency country and pay taxes only on these transfers?
Move to a tax haven.
 
Can I buy things with the bank card of my LLC in my residence country? For example paying rent on name of the company, rent cars, pay flight tickets, etc...

Yes you can, but good luck finding a bank account for a US company if you're not a US citizen or permanent resident. But if you've identified a banking solution for this, please share. Contrary to Sols reply, I don't see how paying such expenses from your company would be taxable income for you personally. o_O

Will I still need to report this company and company income even if 0% taxes, to my home residency country?

Legally speaking, that would depend on the reporting requirements of your country of residence (which you have not yet specified). But if my resident country used a territorial tax system and I owned a foreign company that generated foreign income, I personally wouldn't worry about reporting the company or its income to my resident country unless there were extreme consequences for not doing so. Do check the tax laws of your resident country.

what is the best way of getting paid to my personal account of my residency country and pay taxes only on these transfers?

I'd just send payments from my company's FOREIGN account to my personal account via wire transfer. Again, this is assuming that you're able to acquire a bank account for your US company :cool:
 
Yes you can, but good luck finding a bank account for a US company if you're not a US citizen or permanent resident. But if you've identified a banking solution for this, please share. Contrary to Sols reply, I don't see how paying such expenses from your company would be taxable income for you personally. o_O

That’s not a problem. The problem is that you don’t know anything about the taxation of US LLC’s, let alone things like economic substance, permanent establishment and CFC rules. Very dangerous/wrong advice you’re giving.
 
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Yes you can, but good luck finding a bank account for a US company if you're not a US citizen or permanent resident. But if you've identified a banking solution for this, please share.
TransferWise is well known for accepting non-resident US LLCs. You can also find other EMIs that will take on US LLCs.

Contrary to Sols reply, I don't see how paying such expenses from your company would be taxable income for you personally. o_O
If he's paying his own rent, his own car rentals, and his own flight tickets, it's for personal benefit and therefore taxable as if it had first been paid as personal income. If it's for company purposes, it might be deductible.

LLCs are designed to be tax transparent much like a partnership, owing no corporate income tax by itself.
 
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What do you mean by this?

When you don’t properly separate your own affairs from the company, it can lead to what is known as “piercing of the corporate veil.”
What that means is that since you used the company funds as your personal money, what the company did was actually also done by you as an individual, and not by the company, since it’s not possible to distinguish who did what - then you may suddenly find yourself personally liable.
 
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what other EMI's will do that, any hint?
From what I've seen, it comes down more to the company itself (directors/UBO country, business activities, business partners) than that it's a US LLC. For example, I have seen Paysera accept some US LLCs but they are very selective. Others worth speaking with are Bilderlings and MoneyNetInt. But you can try contacting nearly any of them.

But you'll be limited to SEPA and EUR in many cases. It can be hard to get access to other currencies and payment networks (SWIFT, CHAPS, BACS, FPS).
 
Sols didn't reply to my comment, you did. And if Sols' reply was sufficient, why did you put in your little two cents afterwards [brown noser]?

I submitted a reply b/c I don't agree that a personal tax liability will be applied for a company expense and if you think it will, then YOU are the one that knows nothing about taxation. But I understand you now - you're as much of a brown noser as you are an a*****e so enjoy your life. I won't continue to misdirect this thread by entertaining you any further, and you shouldn't have started this mess in the first place.

Dude, @JustAnotherNomad is right in what he said and you gave a wrong advice. I don't understand why you went so sensible about his answer, you clearly gave a bad advice and he just pointed it out... what's the problem with that? We all make mistakes, we just need to accept them and keep learning.

About the topic, I know that everything was answered but let's group them a little and expand them a little too

1) Can I buy things with the bank card of my LLC in my residence country? For example paying rent on name of the company, rent cars, pay flight tickets, etc...

Yes you can do it since is a free world BUT if is for personal uses then they won't be deductible from the LLC income (which at the end of the day it's your income), remember that all profit from the LLC will be taxed as a personal income in your home country. Also if you mix personal expenses then you loose the whole point of an LLC: The limited liability, and this is not because of a offshore thing, it's because that's how LLCs work (and a lot more types of companies too).

If they are BUSINESS expenses then you could do it so those expenses are not part of the profit BUT some countries have laws about this, for example if you rent an office in your country and also rent a car for business reasons they will consider that the company have local presence and they could have special requirements.

2) The LLC company would be anonymous in any case. Will I still need to report this company and company income even if 0% taxes, to my home residency country?

The LLC is not fully anonymous, the IRS knows about you, banks will know about you (and these are the ones who share data), money services will know about you and probably your home country will know it too. Remember that LLC profits will be taxed as personal income in your home country because the LLC will be a disregarded entity (I assume that's the kind of LLC that you want) so you will need to declare that income. It's a 0% tax for the business, not for you unless you move to a place that don't tax the foreign income even if the job is being done inside the country. All serious members of this forum will tell you that you should not try to fool the tax man.

3) what is the best way of getting paid to my personal account of my residency country and pay taxes only on these transfers?

A disregarded entity when it comes to taxing, it's like it doesn't exists at all which means you are taxed at the total of profits not only the money you send to your country (there are countries that only tax you in the total that goes to the country but if your country is taxing you 40% then I don't believe that's the case).


Remember that a US LLC is a cheap solution and if you want to use it to reduce your taxes then you need to move to a tax haven (or a country like in answer 2).
 
Just one thing to add, some countries do tax all LLC’s as corporations. So even if the US says “you should pay tax in your home country (not in the US) as a sole proprietor”, then your home country can say “an LLC is a corporation and you have to pay corporate income tax”.

Long story short:
In practice, if you live in a high tax country outside the US, you probably shouldn’t use a US LLC, unless you absolutely have to (or unless you’re willing to commit a crime, trying not to get caught - which is stupid, in my opinion).
 
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Thread cleaned, please make sure to keep the conversation around the topic and do not get personal otherwise I am forced to give warning points and possibly. use the BAN button.
 
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Since @mistaphi insisted on being corrected: Territorial taxation obviously wouldn’t help you at all if you work in that country. That’s why it’s called territorial taxation. Common sense should tell you that otherwise every business would simply register abroad and not pay any taxes. Just thinking about it for half a minute should tell you that can’t possibly be how things work.
 
How would your home country know what expenses there were, what might have been personal etc? They would have zero idea

Personally I would drain it every which way with cards etc and claim all as business expenses leaving little to no profit
 
How would your home country know what expenses there were, what might have been personal etc? They would have zero idea

Oh, don’t worry. Your home country’s rules would require you to register the business per domestic law. And then your comment becomes “How would your home country know what expenses there were for your local company?” - they will simply audit you. And if you don’t register the business, you’ll get charged with tax evasion and sent to jail. It’s really quite simple.

(No, of course, it’s not! You’re all geniuses and nobody in the government or tax authorities has EVER thought of this before! Yawn.)