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As a Non U.S. Resident you may choose between two major business types:
Limited Liability Company (known as: LLC)
Close Corporation (known as: C. Corp)
Founders will be protected by limited liability companies (LLCs) and corporations (C Corporations). Consider how you intend to organize the ownership and leadership of your firm, your goals, and prospective tax liabilities when deciding between an LLC and a C Corporation.
LLCs are referred to as "pass-through" entities. Pass-through taxation allows LLC members to deduct business income from their personal income taxes. Meaning that the LLC is not liable to Income Tax (Tax Free Company). The USA federal income tax will be $0 if you meet the following conditions :
1. All owners of the LLC are individuals non USA residents
2. The LLC does not have any presence (Nexus) in the USA. This means that the LLC does not have any USA employees, real office, shipping facility, warehouse or any other physical presence in the USA.
If you meet these conditions, your USA tax will be $0
For tax purposes, a Corporation is a separate legal entity. Corporations pay corporate taxes on their profits, whereas shareholders pay personal income taxes on the capital they receive.
When to choose an LLC:
For e-commerce companies, freelancers & creators, an LLC is a great option. LLC is considered as "tax free" (a pass-through entity). This means that the LLC itself doesn't pay taxes on business income. The members of the LLC pay taxes on their share of the LLC's profits. You won't be able to issue stock or go public because LLC has no shares.
When to choose a C.Corp:
C Corporations are appropriate for companies seeking funding from investors or venture capital firms. Shares of stock represent the company's ownership, and you can use them to raise funds and grant employee options.
You may also use our Business Type Optimizer™ to get help in choosing the right company structure for you.
You can find our Business Type Optimizer™ in the Founder App
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