FYI: US LLCs are not anonymous at all - everything is automatically reported

[gnud]

If you'd read the FATCA agreements and the TIEA agreements between the US and your country you'd realize that in fact everything about your "anonymous" LLC is being reported automatically to the country you indicated on the IRS form 5472 as a place of where the business is conducted and as a country under which the LLC will file its tax return ... If you "by mistake" put there a country where you didn't in fact declare it, according to the agreements, that country can report back to the IRS that it knows no such company, in return the IRS will slap you with a $25000 fine for incorrect filling of the 5472 and will demand you to clarify the situation. Once the real country where you ran the business is identified, you'll have to deal with their tax authorities too.

Not a nice situation.

You have only 3 choices:
1) Find a country that has no tax information exchange agreement with the US - hard
2) Hope that your tax authorities are lenient and don't and won't enforce it - risky
3) Declare it and tax it as local company - pointless

 

[Jonathan169]

3) Is not pointless, as long as your incremental tax incurred is still lower than the net cost of {relocation + new tax regime.} For a start up it's fine, for me I'm looking at tax of 15% when declared, that is OK until I have enuff to jump ship...step 2. I would rather gave 85% of something legally, then worry about 100% of nothing.

 

[Paul77]

Until now nowbody is making a big deal out of it and no issue from those having this kind of setup for years. But it makes sense what you write and I understand your point of view in the third point. For some it would be better to pay the taxes directly to the US and f**k their home country if they don´t live in their home (passport country). Maybe there are ways to make it as a not pass through entity with US taxes paid in the US?

 

[gnud]

Until now nowbody is making a big deal out of it and no issue from those having this kind of setup for years. But it makes sense what you write and I understand your point of view in the third point. For some it would be better to pay the taxes directly to the US and f**k their home country if they don´t live in their home (passport country). Maybe there are ways to make it as a not pass through entity with US taxes paid in the US?

That it has been ok for years doesn't mean taxes and penalties can't be applied retroactively. The IRS raised fine for incorrect filing from $10000 in 2017 to $25000 now. That's an indication that they do care about this. If your country wakes up one day and decides to go through all what the IRS is reporting to them you'll be fucked.

The US has an interested in not being labelled as a tax haven which it was a few years ago when LLCs were really anonymous. The negotiation leverage is simple. If they want to keep receiving their FATCA reports on their citizens, they need to reciprocate.

 

[Sols]

Financial crimes is one of those things were learning from history isn't always very helpful. The entire playing field has changed and is changing.

If your livelihood and personal freedom rely (in part or wholly) on secrecy and lack of enforcement, you're going to have a bad time. Sooner or later.

 

[Jonathan169]

If you have nothing to hide: you have nothing to hide? There are NOMINEE and AGENT services for $25-$125 per year...and deed-poll is a wonderful thing if you don't like your "official" name.

 

[wellington]

If you have nothing to hide: you have nothing to hide? There are NOMINEE and AGENT services for $25-$125 per year...and deed-poll is a wonderful thing if you don't like your "official" name.

Oh boy, never give that away lol.

- How does that benefit BTW

 

[MiddleEuroAsia]

You have only 3 choices:
1) Find a country that has no tax information exchange agreement with the US - hard
2) Hope that your tax authorities are lenient and don't and won't enforce it - risky
3) Declare it and tax it as local company - pointless

for point 1 and 2, What if you have both

 

[marioIT]

The theory behind this thread is almost correct. The reality though is another matter...

 

[JohnLocke]

The theory behind this thread is almost correct. The reality though is another matter...

Do you mind to elaborate ?

 

[gnud]

The theory behind this thread is almost correct. The reality though is another matter...

Yes, many countries don't seem to be interested in what the IRS is offering them. For now. But your freedom and financial wellbeing is always just one click away from being destroyed.

 

[Jonathan169]

Yes, many countries don't seem to be interested in what the IRS is offering them. For now. But your freedom and financial wellbeing is always just one click away from being destroyed.

LOL, I really mean LOL. I have lived in high tax countries and felt as free as a bird and zero tax countries and felt like the prisoner of zelda. If, your life is governed PURELY by the GREEN, and that's really how you define FREEDOM, then 'buddy', there is no point, and sadly you missed the bus.

 

[gnud]

LOL, I really mean LOL. I have lived in high tax countries and felt as free as a bird and zero tax countries and felt like the prisoner of zelda. If, your life is governed PURELY by the GREEN, and that's really how you define FREEDOM, then 'buddy', there is no point, and sadly you missed the bus.

What are you talking about?? This is about not declaring your LLC, i.e. tax evasion.

 

[Jonathan169]

OH...I thought it was about whipping up a storm in a teacup, even though the teacup does not exist.
Sorry, about that.

 

[Eldorado]

"Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business"

Does it really stands for LLC? According to state's corp division, available business forms are:
Corporations
Public Benefit Corporations
Limited Liability Companies (LLC)
Limited Partnerships (LP)
Statutory Trust
General Partnerships (GP)

According to your title IRS will report only first two kinds of structures.

 

[gnud]

"Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business"

Does it really stands for LLC? According to state's corp division, available business forms are:
Corporations
Public Benefit Corporations
Limited Liability Companies (LLC)
Limited Partnerships (LP)
Statutory Trust
General Partnerships (GP)

According to your title IRS will report only first two kinds of structures.

Yes it does. It didn't until 2017 precisely because of this, but the IRS created an exception in this case to comply with international treaties and information exchange, so that the US can't be labelled as a non-cooperative jurisdiction enabling tax evasion anymore. For this particular IRS form, a foreign-owned LLC is regarded as a corporation and as an obligation to submit it.

 

[Inuendo]

lots of fun, it seems, but seriously, is there a alternative for an US LLC? to avoid this kind of problem(s)?

 

[tyrexoid]

lots of fun, it seems, but seriously, is there a alternative for an US LLC? to avoid this kind of problem(s)?

So many people talk about Dubai, I assume it is the best overall option once you have a bit of $$$ to afford it? Can Dubai company be managed from abroad, are they reporting in a same way as US LLCs are about to get reported?

 

[Eldorado]

What about LLC in Wyoming

lots of fun, it seems, but seriously, is there a alternative for an US LLC? to avoid this kind of problem(s)?

Try with vehicle - LLC in Wyoming/Delaware managed by LLC in New Mexico or Panama maybe?

 

[gnud]

Try with vehicle - LLC in Wyoming/Delaware managed by LLC in New Mexico or Panama maybe?

Every foreign-owned LLC must be reported to the IRS.