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Cyprus Residency + US LLC

ecommerceoffshore

New member
Mar 7, 2024
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Cyprus
Hi all, I am a Canadian citizen living in Cyprus under non dom status. Wondering if I do Ecommerce in USA with an LLC, where the LLC is 100% owned by a 0 tax offshore corp, if the structure could work such that the LLC distributes $$ to the offshore corp which isnt taxed, then I collect dividends from the offshore corp at 0% tax with the 2.65% up to the cap.

If so, I understand that certain countries can be tricky to deal with for banking and compliance concerns. If this structure can work, any suggestions on offshore countries to form the corp where they're 0 tax on this income, and also will allow for proper banking / wire transfers and be legal with regard to black lists etc?
 
@Marzio I understand this fact, although even this is unclear about how each country interprets the US LLC. You're saying Cyprus tax law specifically acknowledges the transparency of an LLC? Some countries dont know what to do with the transparent structure apparently and therefore still treat their distributions as dividends.

In any case, why not just have the US LLC owned by a 0 tax offshore company in, say, Panama, (they do territorial tax) and then I own the Panama company, which pays me dividends?
 
@CyprusLawyer101 you mean CFC rules? As relevant to Cyprus, or the offshore company like Panama or another? As I udnerstand it, Cyprus CFC rules only apply to Cypriot businesses and not natural persons.
Hey, no, I mean the test determining tax residency. If the management of the LLC or the offshore entity, or both are deemed to be managed from Cyprus( by your good-self for example) then such companies could be rendered as Cyprus tax residents by virtue of the aforementioned test. In practice I believe such structures have never been challenged hence the reference to the risk being theoritical. You could though, by structuring properly and diverting certain parts of the operation and building proportionate substance to the entities involved in the structure cover also for this theoritical risk, in case it becomes real.