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US company owned by a offshore company

Discussion in 'Business & Tax Advice' started by pooka, Dec 22, 2009.

  1. pooka

    pooka Newbie

    Mar 5, 2009
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    Ive got a question, If i form a LLC or LP in the US, could I use it to pay me a salary/dividends on profits while putting away the rest of it offshore using passthrough taxation?

    Im pretty sure that when you form a LLC it can be taxed as a partnership like a Limited Partnership.

    What do you think?
  2. 195471

    195471 Regular Member

    Oct 11, 2008
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    Disclaimer: I am neither an attorney nor a CPA. This post does not provide legal or tax advice.

    An LLC can elect to be taxed as a partnership, corporation, or sole proprietorship. I don't quite understand your question about paying yourself a salary and moving the rest of the money offshore "using passthrough taxation". If you are, for example, having the LLC taxed as a sole proprietorship or partnership, any profits that are distributed to you as a salary would be taxed as "passthrough" income (usually reported on Schedule C of your personal tax return). Moving the remainder of the LLC's profits offshore really has no advantage in this day and age, as the federal government is all over that scene. Look into FinCEN, especially the Bank Secrecy Act.

    If your LLC is taxed as a corporation, you *may* run into an issue regarding undistributed income. Corporations may be subject to a personal holding company tax if certain criteria are met. I don't know if an LLC-taxed-as-a-corporation might also be subject to this. While there is much about tax law that can be found on the Internet, I personally would seek the advice of an attorney or CPA for the best way to proceed.
  3. SirLoki

    SirLoki Registered Member

    Dec 5, 2014
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    I was wondering the same thing.
    Big corporations like Apple or Amazon do this.
    They send all their revenue to Ireland (Which taxes income made outside at a rate of 2%) and keep their costs domestic.

    I'm not sure on HOW they do it though, they must have some very good CPAs and lawyers
  4. RuthSam

    RuthSam Jr. VIP Jr. VIP Premium Member

    Mar 19, 2010
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    Big corporation as the mentioned have large pockets and great tax lawyers that can provide them with advise on how to get such a setup done without violating applicable tax laws. I would recommend you to get in touch with an tax lawyer or an CPA that knows about setups like this otherwise you will get in big troubles.