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Why incorporate in the USA and which State is Best for Non-Residents?

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Why incorporate in the USA and which State is Best for Non-Residents? The USA has many advantages for non-residents seeking to incorporate there but not trade in the USA. First, and most important, non-residents are not taxed, which provides a significant advantage for those incorporating LLCs. An LLC (Limited Liability Company) in international terms is more akin to a Limited Partnership. Members are liable to taxation (if any) on profit share from the LLC. The other principal type of US business entity is the C Corporation  (a standard limited company in most countries). C Corporations are taxed on their profits wherever sales are made and whatever the ownership structure. The standard rate of Federal corporate tax in the USA is 21% for 2021. It is important to understand that each state determines its own taxation rates (in addition to Federal Taxes), and the States are certainly not equal in their taxation policies.  Throughout this article, we refer to ‘incorporate’, but in fact, we mean forming an LLC (Limited Liability Company). There is a shortlist of States which are generally considered to be business-friendly. Top of the list is Delaware, which not only created LLCs but also has a well regarded Chancery (business) court. Other contenders include Florida – downsides include corporate tax, more applicable to C Corps. Nevada – licensing requirements for certain businesses can make this unattractive. Texas – this is a business-friendly state with low taxes. Wyoming – our choice due to minimal requirements and low costs. You might ask why California and New York are not on the list above. Simply, bureaucracy and state-level obligations. An introduction to Wyoming LLCs. Compared to other states in the US, Wyoming offers numerous advantages to non-residents that want to set up an LLC there. To recapitulate, these include: Zero Wyoming State taxes. Low maintenance costs. Minimal information on the public record.  You will, however, need an EIN (US tax number), and we can arrange this for you when you form an LLC with us. An EIN (formally Employer Identification Number) is a tax registration certificate and will be required by banks/e-Wallets before they will open an account for an LLC. A little more detail on setting up an LLC in Wyoming. The Wyoming registry does not ask for information to be filed, and therefore there is no public disclosure concerning your business or its structure. Once instructions have been received, it should take just a couple of days to set up your company. The Benefits of LLC Incorporation in Wyoming For a limited liability company or LLC, there are no state taxes to be paid in Wyoming. The LLC is seen as a separate entity to its owners which means you are not liable for debts and can protect your assets. The reporting and disclosure rules for a Wyoming LLC are minimal, and you do not have to be a US resident to set one up. Single Member LLCs are permitted and even a Sole Member can act as the Manager who fulfils the same function as a director. An LLC will continue indefinitely, even if passed onto other owners, and will only cease to trade once it is officially dissolved. It’s also, therefore, easy to ensure the transfer of ownership of a business. The filing fees for setting up a Wyoming LLC amongst the lowest in the US. You can set up banking facilities anywhere in the world, giving your business the flexibility it needs to operate on a global stage. What is the next step to form your Wyoming LLC. First, is to decide on a company name, better to give us three choices which we can check for you. Second, is to decide who will be the Manager and, of course, your co-investors as Members. If you have multiple Members it’s probably a good idea to have a Members agreement in place – we can provide a draft. Thirdly, please contact us to get things moving. Finally, after formation you will need to apply for an EIN and subsequently open a bank account, both of which we can assist with. Contact TaiPan about incorporating a Wyoming LLC

Avoid These Common Mistakes When Forming An Offshore Company

Avoid these common mistakes when forming an offshore company

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Avoid these common mistakes when forming an offshore company. While forming a company is relatively simple and can be accomplished online, a few set-up mistakes could cost you time and money. Fortunately, these are easy to avoid if you choose the right professional to work with and take a little time to get everything right.     The most common mistakes we see when a business is forming an offshore company include: Choosing an unsuitable jurisdiction It’s important to consider all of your options, including ongoing costs, what you might need in terms of accounting and audit obligations (if any). Tips for choosing the jurisdiction for your company: What are the ongoing annual costs – Apart from formation cost (by definition a onetime cost) there will also be annual costs. These costs include registered office, registered agent/company secretary which are always obligatory, plus accounting & audit obligations where applicable and finally optional costs such as a virtual office etc. Where are you planning to sell? There are different obligations depending on where you are planning to sell. For example, a company selling in the EU 27 area will almost certainly need to register for VAT (a form of Turnover Tax). Likewise a company trading in the USA needs to be aware of State Sales Taxes (which vary). Need more information or advice? Please contact us. Unsuitable banking arrangements A common mistake is that clients are trying to replicate what they are used to. e.g. bricks and mortar bank offering traditional services. It may well be that an e-wallet makes sense in many cases and gives greater flexibility. First, it is important to understand the difference between a bank and an e-Wallet (Digital Wallet or Neobank): Banks have traditionally served local customers and are set up for face-to-face interaction and telephone service. They tend not to work well across borders except in specialist areas, e.g. private banking. Their existence is being undermined by increasing regulation and the move towards digital banking. E-Wallets (also known as Neobanks or Digital Wallets) have rapidly increased their market share in the last twenty years or so, starting with PayPal in 1998. They specialise in fast transfers of funds, especially across borders, together with good exchange rates. Customer service is often limited unless you enjoy communicating with bots. Not being familiar with tax rules Tax law is constantly changing, and it’s essential to make sure you understand what applies in your chosen jurisdiction and how it will impact your personal tax position. e.g. is it better to take a salary or dividends? In several countries, including Singapore, salaries are generally taxed at the local rate, even for non-residents. This subject often requires professional advice to get it right. However, there is a danger of ‘letting the tax tail wag the dog’ at the expense of, say, ease of doing business in a particular jurisdiction and the total cost (both start-up and annual) of maintaining the company.   Insufficient research before starting Although it may sound obvious, not thoroughly researching your project can be a major reason for difficulties down the line.     Tip You should carry out extensive background reading on key topics related to both marketing strategies/uses (such as pricing) AND your customer demographics. For further detailed advice, please contact: TaiPan-International.com today to find out more.