Incorporating an LLC in Delaware being non resident (newbie question)

[catslover]

I am looking at a way to incorporate an education LLC in Delaware to sell courses and certifications overseas.

I have read a lot on the internet and in the forum, apparently the best option is Harvard Business Services Inc, but I am confused about the requirements that I need to create the LLC and also about the responsibilities.

Apparently a bank is needed in the USA, and this is something that most people complain about, because it is a difficult requirement for non-residents to achieve. I already have an active Payoneer account.

On the other hand, a physical correspondence address in the USA is also convenient, is this important?

Finally, I am not a resident of the United States, but for more than 10 years I have been selling photos in microstock agencies, and due to this I must fill out the W-8BEN form every year, so I am a tax payer in the US. Can this negatively affect my status when opening an LLC as non-resident?

Thanks in advance for your replies.

 

[Sols]

I am looking at a way to incorporate an education LLC in Delaware to sell courses and certifications overseas.

Why Delaware? Why US?

I have read a lot on the internet and in the forum, apparently the best option is Harvard Business Services Inc, but I am confused about the requirements that I need to create the LLC and also about the responsibilities.

If all you need is company formation, registered agents for forming US companies are a lot less important than registered agents for forming companies in more classical offshore jurisdiction. Accounting can be outsourced to someone else or do it yourself. There are some forms that must be submitted annually to the IRS, which can be daunting if you're unfamiliar with basic accounting in which case you can probably find a CPA to do it for you.

In your case, you might want to consider Stripe Atlas, since it sounds like you want the ability to take payments from customers online.

Apparently a bank is needed in the USA, and this is something that most people complain about, because it is a difficult requirement for non-residents to achieve. I already have an active Payoneer account.

You don't actually need a bank account in the USA. But a lot of people want it because they perceive it as prestigious or secure, or because they have domestic banking needs.

Wise and Mercury are popular alternatives people often use. There are a lot of other neo-banks as well that take LLCs owned by non-residents but not all of them support international wire transfers, which can be a problem.

Traditional banks are more difficult but not impossible. If you visit them in person in New York, Miami, or California, you might be able to get an account opened.

On the other hand, a physical correspondence address in the USA is also convenient, is this important?

Depends but often not necessary.

Finally, I am not a resident of the United States, but for more than 10 years I have been selling photos in microstock agencies, and due to this I must fill out the W-8BEN form every year, so I am a tax payer in the US. Can this negatively affect my status when opening an LLC as non-resident?

Probably not, especially not if the two business activities are unrelated (which it sounds like). Tax problems occur if you have a significant amount of US based clients or suppliers.

But it's always best to speak with an actual tax adviser to clarify specific tax law questions.

 

[catslover]

Why Delaware? Why US?

Thank you for your reply Sols

Tax adviser is part of the 'Harvard Business Services Inc' service?

The reason why I want to create my company in Delaware/US is for credibility and marketing.

I am still exploring the business, but I already have a client in Asia interested in certifications from an American institute.

To which another question arises: what happens with the money that I earn overseas and never touches a bank in the USA?

 

[Sols]

Tax adviser is part of the 'Harvard Business Services Inc' service?

No, a tax adviser is an independent person or company who can offer you professional advice.

Someone like Harvard Business Services Inc. are just a registered agent which forms the company for you. They aren't necessarily qualified to give tax advice.

I am still exploring the business, but I already have a client in Asia interested in certifications from an American institute.

To which another question arises: what happens with the money that I earn overseas and never touches a bank in the USA?

The Delaware LLC is not a taxable entity under US law (unless you specifically opt for it to be a taxable entity, which is not normally the case). The income falls directly to you personally and if you don't live in the US or sell to US clients, there is practically zero risk of owing any tax in the US. Location of bank account is irrelevant.

But keep in mind that the LLC is probably tax resident wherever you live and has to comply with the local tax laws where you live. This usually means you have to pay local corporate tax or at least pay income tax on the company's profits as they are attributable to you personally. Check with a local tax adviser for details.

 

[catslover]

No, a tax adviser is an independent person or company who can offer you professional advice.

Thanks again for your answer. This clarifies a lot for me.

Where can I get a tax advisor? how much they usually charge? Are they hired once a year for the tax return?

 

[JohnLocke]

If you want to make it right you will find a local tax advisor since taxes to be paid will be due in your own country where you live.

 

[catslover]

Hi Catslover, there are a lot of possibilities that you can get for sure a bank account (fintech bank account that don’t require you a SSN), we helped and continue to assist client that have educational business like yours.

Let me understand, do you sell in US or not ?

I don't originally sell in the USA, but it depends on how the project scales.

The fastest way to start for me is selling in Asia where I have my network, then I can offer online courses to Europe and South America, where I also have some network to.

In the future I can sell online courses to the USA, I don't know if this is considered selling within the USA... anyway, if this gives me problems, then I can see how to restrict sales to this country.

 

[Error404]

Hi Again,

If you are not going to sell in US the US will be a TAX Heaven, an LLC company will be great to sell your online course with good option of opening bank account without ask a SSN.

Others advantages:

1. High level of privacy;
2. You don't need to get an accountant
3. If you work internationally LLC has a excellent reputation
4. As you are opening a LLC as a foreign you don't be required to pay taxes unless you start to do business in US
5. You will pay by 1st June of 2023 if you open in 2022 only Franchise TAX and Agent fee (not expensive more or less 600$)

If you need help to setup the LLC I'll be glad to help you, pls pay attention with some package online cause they will not give you all the necessary documents to open a bank account.

 

[DunningKruger]

@catslover ;
- I would suggest Wyoming instead of Delaware
- If you will have US based customers do not use US companies Just create an Estonian or other EU company (UK can be good as well)
- If you will have EU based customers at that time use US company
- If you have both, establish 2 companies and issue invoices EU customer will get US company invoice, US customer will get EU company invoice

 

[ivan1911]

You can have customers in USA but still not be ETBUS.. you can search for more clarification but if you are not in USA , have a pass through entety and just have USA customers you don't need to pay any tax.

 

[JohnLocke]

have a pass through entety and just have USA customers you don't need to pay any tax.

You still will be liable for personal income tax on what is earned in the US LLC if I'm not mistaken!

 

[ivan1911]

You still will be liable for personal income tax on what is earned in the US LLC if I'm not mistaken!

Yes but not in USA , in your home country...
Just wanted to say that many people run aways from USA llc as they have USA customers and are afraid of being ETBUS. So just by having USA customers doesn't make you liable for USA tax for pass through LLC.. but of course you should pay personal income tax on all profits in your home country.

 

[catslover]

Guys,thank you very much for your answers

Now I have a clearer picture.

What do you think are the next steps? Should I go direct to Harvard Business Services Inc?