During the last months, the USA lost a lot of its attractiveness due to different decisions of the current government erratically changing direction every now and then and completely confusing not only tourists and the financial markets but also businesses around the world.
Still, even nowadays, US LLC as a valid option for doing business in nearly any country worldwide should not get out of sight.
The best values of this company form can fully emerge and be used when you are a digital nomad (without a tax residency) or reside in a country with territorial taxation or without local personal taxes. When establishing a US LLC as a disregarded entity for US tax purposes and not doing business with US-customers, you can live completely tax-free in this case.
Important point: an LLC as a disregarded entity may not have more than one individual shareholder. In this case, the LLC itself is tax-free. For US-Americans it does not bring much advantage taxwise, as they still have to pay their taxes in the USA. But for foreigners residing elsewhere in the countries not taxing income from abroad it can be a fair option to optimize their business, having a company in a renowned country and benefiting of the above tax advantages and LLC reputation (for example, for easier bank accounts and access to personal credit history in the USA – this is possible even if you do not reside there).
In the countries taxing the worldwide revenues (like the most – but not all! – of the EU countries) living there would mean that also the income from the LLC would need to be taxed in your residence country. The tax advantages vanish in this case. But can a US LLC be beneficial outside of the pure tax topics? The simple answer is: yes, it can.
You can use a US LLC for dropshipping business or Amazon FBA, as an example. As long as you do not have employees in the USA, no dependent agents working exclusively for you (Amazon, for example, works for a lot of other businesses, not only for you, therefore working with Amazon is not critical so far) you are pretty safe in regards of a local US establishment which could trigger tax obligations (corporate or VAT/ sales tax).
You can also use an LLC for (nearly) any kind of online business, like affiliate marketing (as an example).
LLC can be used for trading (also day trading) and investment of assets.
LLC can be useful as real estate holding. LLC is vested with legal capacity in most countries in the world and can therefore also purchase real estate in those countries and be entered into land/ cadastral registers as the real estate owner. It is nearly impossible that a US-American company would be expropriated which can be a good protection for your real estate, especially in times when some governments in the EU seriously discuss projects like additional property levy or (partial) expropriation of privately owned property.
In this regard it is useful to keep in mind that the USA have signed friendship treaties with different countries (like with Germany back in 1954) which strongly protect mutual business and property. Overall, it makes sense to check whether your residence/ home country has such friendship treaty with the USA as it can significantly increase the value of owning an LLC in this case.
LLC can be a good protection against any kind of dissuasion (imprint-LCC). Especially, in the EU countries where lawyers specialized in dissuasions trawl through websites and can start bombing you with warning letters adding their exorbitant invoices if they discover any small mismatch with legal requirements. You should just pay attention to the fact that 1) the domain name is registered to your LLC and not to you personally, 2) your name does not appear on the website as owner or operator of the website, especially if you still live in a EU country, else you could be suited personally in this case (piercing the corporate veil).
Depending on your needs, the location of the US LLC can be different. Therefore, it is crucial to understand what you plan an LLC for before offering you the right LLC in the right federal state. This surely triggers different fees and different processing times. Important to keep in mind that it is not done with the incorporation of an LLC. A day-to-day support, especially in regards of filing the required declarations in the USA, like the form 5472 or FBAR, is also important as omitting these kinds of obligations can lead to high penalties. Many agencies do not explain it to their customers when incorporating.
If you are interested in incorporating a US LLC, feel free to contact us and one of Singabiz agents or our partners (already incorporated higher 3-digit number of LLC in different US states, mainly for European customers) will be glad to assist you.
