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Foreign Owned Delaware LLC and Tax Matters

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sbtf87

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Dec 18, 2019
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#1
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Hi, I am a 3D developer, an Indian Citizen currently living in Dubai. I would like to form a Delaware LLC being Non-Resident of USA. This LLC will be receiving payments from my client , a company based in Australia. They will send money to PayPal account created in the name of Delaware LLC (the client supports only PayPal). This client will be withholding 5% of my income before sending the money, they need my LLC Tax ID so they will be reporting it to IRS. All money comes with proof and legit earnings. I will not receive any payments from US people or US business, also I will not indulge in any business activity with US region. I am planning to create a Transferwise account in the name of this LLP if Transferwise can work without having a US bank account.

In this case:
  • Should my Delaware LLC pay any taxes (for State and / or Federal Tax) considering all income is from non-US sources?
  • Am I subject to US Income Tax / Personal Tax, considering I am non-resident but being a solo director of this LLC?
  • Is there any restriction for transferring the money out from this LLC to other countries (means, I pay myself and my collaborators in Dubai, India and Malaysia directly from the LLC using Transferwise)?
  • Is there any Income Tax / Witholding Tax applicable for international outward transfers made from the LLC / Transferwise?
  • Is tax filing mandatory even if there is no tax to be paid (please note, 5% money is withheld in Australia and reported to IRS, but I don't care about getting a refund if many papers are to be filled and if it is not mandatory to claim such a refund)
  • Which tax forms should I and the LLC file in my case?
Additionally:
  • Is there any banks providing an account for this LLC without the need of me visiting US?
  • Will Tranferwise work even if LLC is not having a US bank account?
  • Can I link a Transferwise US account to PayPal US account and withdraw money to Transferwise as we do to normal bank?
Kindly let me know your thoughts.
Thank you in advance.
 
#2
You need to check how your country of residence will consider this entity for tax purpose. Most likely you will owe corporate tax in India.
From my understanding an US LLC is a passthrough entity for tax purpose, the company will be considered a tax resident of your tax residency country.
 
#3
nomad999 said:
You need to check how your country of residence will consider this entity for tax purpose. Most likely you will owe corporate tax in India.
From my understanding an US LLC is a passthrough entity for tax purpose, the company will be considered a tax resident of your tax residency country.
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He is 'currently living' in Dubai, so he is probably not a tax resident of India.
 
#4
mange38 said:
He is 'currently living' in Dubai, so he is probably not a tax resident of India.
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Hi, thank you for your message. Yes this is correct, I live and work in Dubai since 2 years so I am technically Non-Resident India. But one point, if I become tax resident of India in future I will have to pay Income Tax in India only for the funds I bring to India from this LLC right? Or will I be taxable in India for all the money received to my DE LLC account? ange¤%&
 
#5
nomad999 said:
You need to check how your country of residence will consider this entity for tax purpose. Most likely you will owe corporate tax in India.
From my understanding an US LLC is a passthrough entity for tax purpose, the company will be considered a tax resident of your tax residency country.
Click to expand...
Hi, thank you for your message.

Is the US LLC itself subject to corporate taxes in India if it's owned by an Indian resident? I thought only the funds transferred from the US LLC to the Indian person's bank account will be taxable as per indian rules (Personal Income Tax in India).
 
#6
sbtf87 said:
Is the US LLC itself subject to corporate taxes in India if it's owned by an Indian resident?
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Since India doesn't tax by citizenship and you are tax resident only in Dubai I'd say no.

You need to speak with a lawyer in Dubai and find out how UAE tax authorities treat partnerships/LLCs.
 
#9
My bad, missed the part about you living in Dubai.
Its important to understand that if you were tax resident in India or most country who tax on worldwide income that your US LLC would also be tax resident in India and would have to pay corporate tax there on top of the salary or whatever income you would get from that company.
 
#10
GiGoGo said:
A friend opened his PayPal LLC account with just the EIN
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When was that?
It might be possible to fake the ssn (use ein in place of ein) to get started but then you're at the risk of suspension.
They ask for ssn when you sign up and when I called twice then they said it's absolutely necessary to have a ssn.
This was in May this year.
 
#11
fshore said:
When was that?
It might be possible to fake the ssn (use ein in place of ein) to get started but then you're at the risk of suspension.
They ask for ssn when you sign up and when I called twice then they said it's absolutely necessary to have a ssn.
This was in May this year.
Click to expand...

Maybe a real bank, but for Mercury and other EMI it's just the EIN
 
#13
The LLC income will be treated as your personal income if it’s owned by you. Just as if you had billed your clients as a sole proprietor in your country of residence. You do not only pay tax on what you pay out.
 
#16
if you are resident of a territorial taxation country and you don't spend the full year there you could easily get away without trouble, they are very laxist on the matter I believe.
 
#17
nomad999 said:
if you are resident of a territorial taxation country and you don't spend the full year there you could easily get away without trouble, they are very laxist on the matter I believe.
Click to expand...
any Updates mate about your situation ?
 
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