Delaware LLC or similar stable structure for investing

[headspin]

Hello guys,
I have a headache looking for a solution on this and would appreciate if someone can make some light in this matter. I'm Romanian fiscal resident and want to open a company basically for keeping LONG TERM (more than 1 year) investments (stocks, etf's, crypto, art, fractionalized real estate, seeding new projects ... etc). I'm tending towards a Delaware or Wyoming LLC (sole proprietorship) to do that, the problem I have is with the bank account. Who had success with US LLC and EU bank accounts ? Romanian banks don't want to hear about crypto, swiss banks are super expensive and unreliable, I'm seeing that they block funds without explanation ( anyone had similar issues ?) ... Does Fidelity or other investments institution accept bank accounts in the name of the LLC from any country? I don't want to escape taxes I just need a reliable structure to access the US market (ETF's, and some institutions that work only within US ) and to hold and make other investments without having the headache of owning a company in EU. Any help, advice ?

Thanks

 

[startfleetio]

It's possible to get a US LLC for opening brokerage accounts. Granted, some brokers usually require proof of address, but that can be solved. There are also banks willing to open bank accounts remotely for US LLC trading stocks

 

[aage]

Can you setup a Delaware company with Mercury bank account and anonymize the entire thing @startfleetio ? I mean my name does not appear anywhere public ?

What about CRS and European countries with a Delaware company ?

 

[headspin]

It's possible to get a US LLC for opening brokerage accounts. Granted, some brokers usually require proof of address, but that can be solved. There are also banks willing to open bank accounts remotely for US LLC trading stocks

Incorporating is the easy part, I'm interested in this structure for long term investments (securities, bonds, crypto ... all together ) Any examples of the annual tax report to the IRS on this types of LLC's ? I know in the case of one member it will act as a pass trough entity. I'm still looking for information about how this will work. Tax accountants that are working with stocks and other securities are not working with crypto... so everything it's getting messy. Anyone here added crypto to their LLC balance sheet ? I'm looking for long term investment and no headaches with the reports, everything must be easy to manage and stable.

 

[cryptonite]

You can incorporate the Delaware LLC and if it’s a single member, it’ll be considered as pass through entity for tax purpose. You will need an EIN to be able to open a bank account. Most banks will require a visit to the branch to open the account. The bank will produce a tax statement linked to that EIN. You will need to file form 5472 and 1120 proforma annually if the LLC is foreign owned, unless if you chose to have the LLC taxed as a corporation.

At the moment, the US does not share information with CRS, but that may change in future.

With regards to crypto, it is now reportable to the IRS for any transactions above $10000. If you are dealing with US based exchanges, expect that information to be shared, similar to those from a stockbroker.

As long as you are a non US resident, the only taxes applicable are on income from US (e.g. Selling books on Amazon). Investments in equities have only withholding taxes on dividends (taxed at source through a W8-BEN election). Capital gains are not subject to tax for non US residents, though technically you should report it to the country where you are tax resident and that country taxes you on global income.

 

[startfleetio]

Incorporating is the easy part, I'm interested in this structure for long term investments (securities, bonds, crypto ... all together ) Any examples of the annual tax report to the IRS on this types of LLC's ? I know in the case of one member it will act as a pass trough entity. I'm still looking for information about how this will work. Tax accountants that are working with stocks and other securities are not working with crypto... so everything it's getting messy. Anyone here added crypto to their LLC balance sheet ? I'm looking for long term investment and no headaches with the reports, everything must be easy to manage and stable.

Capital gains on stocks are non-taxable for non-us residents. Dividends will incur FDAP income tax with a withholding rate of 30% (could be lowered depending on treaty). Cryptos are basically personal property, so the source of income is tied to the seller's country of residence. If you are a non-us resident, this will be foreign-source income.

 

[headspin]

You can incorporate the Delaware LLC and if it’s a single member, it’ll be considered as pass through entity for tax purpose. You will need an EIN to be able to open a bank account. Most banks will require a visit to the branch to open the account. The bank will produce a tax statement linked to that EIN. You will need to file form 5472 and 1120 proforma annually if the LLC is foreign owned, unless if you chose to have the LLC taxed as a corporation.

At the moment, the US does not share information with CRS, but that may change in future.

With regards to crypto, it is now reportable to the IRS for any transactions above $10000. If you are dealing with US based exchanges, expect that information to be shared, similar to those from a stockbroker.

As long as you are a non US resident, the only taxes applicable are on income from US (e.g. Selling books on Amazon). Investments in equities have only withholding taxes on dividends (taxed at source through a W8-BEN election). Capital gains are not subject to tax for non US residents, though technically you should report it to the country where you are tax resident and that country taxes you on global income.

Thanks for the info. Anyone can share some verified accounting services for non-residents that work with DE or WY LLC'S ?

 

[gnud]

The US is not part of the CRS, but it has FATCA agreements with countries all around the world. Your local tax ID, your place of residency and the place where the business is being carried out is being reported to the IRS annually through form 5472 ... and when you're opening a brokerage account you need to provide this information as well to the broker, as an authorized person running the account, which they then pass on to the IRS. So the IRS knows all about your investment accounts in the US and your LLC, which is then being shared thanks to the FATCA with your country of residency, essentially replicating the CRS.

 

[Risehigh]

How does the pass through entity concept work in combination with holding/managment structures - example us llc is owned and managed by foreign low tax but non fatca or eu blacklist country, the ubo will be shared anyways in their new register okay ( still nor sure who can access it with which permissions, I assume only after legal/court cases - any info?)
And also would the country/mother/holding would be noticed that they see it as pass through there and the tax liability falls back to low tax country? Or they directly anyways report to UBO country?

 

[cryptonite]

Not sure about other states, but states like Delaware, Wyoming and Nevada do NOT keep details of their members on their register. Even the IRS have no way of knowing who is behind those LLC’s. So, the IRS cannot share that information if they want to (so far they are not sharing anyway as they are not part of the CRS).

The IRS puts the onus on the members of the LLC to self report through filing form 5471, imposing $10000 fine annually for non filing. If the LLC is foreign owned, there are no taxes to be paid, unless the LLC has derived income from the US as a connected business.

If the member is a not US citizen, green card holder or US tax resident as defined by the substantial presence test, then US LLC’s can be an effective tax planning. Incorporation cost a couple of hundred dollars and bank accounts can be opened with reputable banks.

Compare the above cost versus setting up an IBC in a tax haven island and opening a bank account with a Mickey Mouse bank in some dodgy country…

 

[gnud]

Not sure how it can be effective for tax planning when you're obliged to tax it in your country as a branch of a foreign corporation, and additionally everything is being reported through automatic exchange of information between the US and your home country so you cannot even hide it.

 

[Risehigh]

Not sure about other states, but states like Delaware, Wyoming and Nevada do NOT keep details of their members on their register. Even the IRS have no way of knowing who is behind those LLC’s. So, the IRS cannot share that information if they want to (so far they are not sharing anyway as they are not part of the CRS).

The IRS puts the onus on the members of the LLC to self report through filing form 5471, imposing $10000 fine annually for non filing. If the LLC is foreign owned, there are no taxes to be paid, unless the LLC has derived income from the US as a connected business.

If the member is a not US citizen, green card holder or US tax resident as defined by the substantial presence test, then US LLC’s can be an effective tax planning. Incorporation cost a couple of hundred dollars and bank accounts can be opened with reputable banks.

Compare the above cost versus setting up an IBC in a tax haven island and opening a bank account with a Mickey Mouse bank in some dodgy country…

Isnt there an UBO registry getting implemented now?