Best way to structure UAE FZC owning US LLCs in the eCommerce space?

[YSB]

We have a partnership between a US and a non-US person that run eCommerce LLCs in the US. For tax purposes we want to set up in a freezone in the UAE and have the UAE free zone company own the US based LLCs. Is this even possible? and what would the best free zones be to set up in to own US LLCs?

 

[CaptK]

Why do you need to own a US LLC?
UAE and US have no tax treaty so your tax for a branch company is due even if you use a DE company so there is no savings.

You would be better off running the company through the UAE company from the start.

 

[YSB]

Why do you need to own a US LLC?
UAE and US have no tax treaty so your tax for a branch company is due even if you use a DE company so there is no savings.

You would be better off running the company through the UAE company from the start.

The only reason we're using US LLC's is because we use payment processors that work with US companies. I'm still new to the tax stuff so still trying to figure out whats the best way to structure the company. My thinking was that if a UAE company owns the US LLCs it'll be easier to manage there there would be tax savings but maybe not? I know some people in my space run their companies out of Puerto Rico so maybe thats something i should look at.

 

[CaptK]

The only reason we're using US LLC's is because we use payment processors that work with US companies. I'm still new to the tax stuff so still trying to figure out whats the best way to structure the company. My thinking was that if a UAE company owns the US LLCs it'll be easier to manage there there would be tax savings but maybe not? I know some people in my space run their companies out of Puerto Rico so maybe thats something i should look at.

To be honest this needs a proper CPA who fully understands US tax law. From the little that I know if you receive a single cent from a US based payment platform and or a bank transfer then your accounting becomes a headache. You are liable for tax!!

Plus also if you are live in the US then you have to register your company as a foreign company. Foreign means different state in the US. Then that's another minefield which makes the whole set up a waste of time.

Maybe it's worth setting up a new company in the name of the non US partner.

There are more complicated structures regarding licensing from the UAE company to the USLLC. Similar to what Apple and Amazon do.

 

[YSB]

To be honest this needs a proper CPA who fully understands US tax law. From the little that I know if you receive a single cent from a US based payment platform and or a bank transfer then your accounting becomes a headache. You are liable for tax!!

Plus also if you are live in the US then you have to register your company as a foreign company. Foreign means different state in the US. Then that's another minefield which makes the whole set up a waste of time.

Maybe it's worth setting up a new company in the name of the non US partner.

There are more complicated structures regarding licensing from the UAE company to the USLLC. Similar to what Apple and Amazon do.

Appreciate your input! We will consult with a CPA for sure before making any decisions. Just wanted to see what options are out there.
So just to be clear there is no way for a US person to get tax breaks with any kind of setup in the UAE?

 

[CaptK]

Appreciate your input! We will consult with a CPA for sure before making any decisions. Just wanted to see what options are out there.
So just to be clear there is no way for a US person to get tax breaks with any kind of setup in the UAE?

Patriot Act stopped American billionaires hiding money offshore. The likes of Apple and Amazon still have to report to the IRS but as they are just marketing, R&D and or franchisees of the offshore not liable for tax.
Even if your partner is a 1% shareholder the bank are obliged to inform the IRS and no bank will not declare this info.