Question Minimize risk of being caugh by EU gov for a US LLC

[TmeWalcO]

Hi,

I want to incorporate an LLC in NM while being resident in a western European country. I'm planning on banking with Mercury, and leave most if not all the money there. I need to do this for 6 months to a year until I move to a better jurisdiction. For context, it'll be low ammounts of money.

I know there are several parts of this process in which I will have to provide an identity, a phone number and an address. From my research, it seems impossible nowadays for a low-income individual to get any of that information without your real identity. But my question is: What steps can I take to minimize the risk of the Tax Office finding out (looking in the first place, as I know if they want to find it, they will) about the USA LLC?

That is:
- A way to get a less identifiable mailing address for registered agents, getting EIN, or banking?
- A phone number more difficult to associate with my identity.
- Optimal way of using funds if needed? Debit card from Mercury? Moving to an EMI and spending there? Sending to an exchange, getting crypto and then spending with something like a Binance debit card?

I know anonymity is impossible, but considering I would be moving small ammounts of money, and just for 6 months to a year, how can I minimize the risk of getting caught?

Thanks for your help.

 

[Sols]

Under FATCA, there is a greater-than-zero risk that your bank or, in this case Mercury's underlying banking partner, will report your account to your home country. That will be done on the basis of your residence and/or citizenship. The company itself is bypassed/ignored.

The same applies to EMIs, although then under CRS/AEOI rather than FATCA.

 

[TmeWalcO]

Under FATCA, there is a greater-than-zero risk that your bank or, in this case Mercury's underlying banking partner, will report your account to your home country. That will be done on the basis of your residence and/or citizenship. The company itself is bypassed/ignored.

The same applies to EMIs, although then under CRS/AEOI rather than FATCA.

Yes, I'm aware, the question would be what that greater-than-zero is. 5%? 25%? 60%? I know it's impossible to know, but I would be willing to take certain risks, that's why I'm trying to minimize it when possible (if at all).

 

[Sols]

It is indeed a risk with so many unknown factors it's impossible quantify in any meaningful way. I'd err on the side of caution and assume 100% because that's the trajectory we're headed towards. The US has historically been slow to reciprocate under FATCA but efforts are increasing.

Once you have a bank account with your identity associated to it in a FATCA or CRS compliant jurisdiction or bank, the risk goes from zero to some value greater than zero. You cannot really do anything to affect that risk. Whether reporting happens is not based on any factors that you can control (aside from moving/residence). You become a reportable person simply by existing as a foreigner with a bank account.

Whether your phone number is an anonymous Sudanese prepaid SIM and your company address is some dodgy mail forwarder in Alaska do not change who you are: a person resident in another country, with which the bank or the bank's country has an agreement to exchange information about bank account holders. — If anything, the more obfuscation you throw at the bank, the more likely it is they will decline or terminate you.

Do you need a bank account from day one? Can you make do with crypto, or defer payments from clients until you have relocated?

Can you set up legitimate residence in another country right away? UAE or Malta/Cyprus?

Depending on where you live now, the tax laws there, and the timing of the next steps of your plan, maybe your US LLC isn't tax resident there if you move quickly enough. Look into what the local law is. Maybe reporting is a non-issue?

 

[TmeWalcO]

It is indeed a risk with so many unknown factors it's impossible quantify in any meaningful way. I'd err on the side of caution and assume 100% because that's the trajectory we're headed towards. The US has historically been slow to reciprocate under FATCA but efforts are increasing.

Once you have a bank account with your identity associated to it in a FATCA or CRS compliant jurisdiction or bank, the risk goes from zero to some value greater than zero. You cannot really do anything to affect that risk. Whether reporting happens is not based on any factors that you can control (aside from moving/residence). You become a reportable person simply by existing as a foreigner with a bank account.

Whether your phone number is an anonymous Sudanese prepaid SIM and your company address is some dodgy mail forwarder in Alaska do not change who you are: a person resident in another country, with which the bank or the bank's country has an agreement to exchange information about bank account holders. — If anything, the more obfuscation you throw at the bank, the more likely it is they will decline or terminate you.

Do you need a bank account from day one? Can you make do with crypto, or defer payments from clients until you have relocated?

Can you set up legitimate residence in another country right away? UAE or Malta/Cyprus?

Depending on where you live now, the tax laws there, and the timing of the next steps of your plan, maybe your US LLC isn't tax resident there if you move quickly enough. Look into what the local law is. Maybe reporting is a non-issue?

You're right, deferring payments might be an option, but it's a bit risky too. Crypto would be better, but there are two issues with that:

- Making people unfamiliar with it comfortable paying with crypto.
- The volatility is huge.
- At some point, I'll to cash out.

And probably any other issues I can't think of. Do you have tips to circumvent that.

Where I reside they deffinitely have FATCA and CRS agreement.

 

[Jerry1911]

Indeed, some people aren't familiar with crypto. In regards to the volatility there are stablecoins such as USDT, USDC, BUSD, TUSD. And you can always sell it for cash

 

[Sols]

- Making people unfamiliar with it comfortable paying with crypto.

That's very hard to overcome. There are processors like CoinsPaid, BitPay, and Moonpay that try to make it easy but it doesn't compare to the ease of just paying with a regular card or wire transfers.

- The volatility is huge.

Can be mitigated with stablecoins as mentioned by @Jerry1911.

- At some point, I'll to cash out.

That part is quite easy to execute. Just open a business account with an exchange and convert to fiat. Or pay yourself in crypto from the company.

 

[TmeWalcO]

Indeed, some people aren't familiar with crypto. In regards to the volatility there are stablecoins such as USDT, USDC, BUSD, TUSD. And you can always sell it for cash

Is there a way to get those stablecoins directly in a Wallet? Or do I have to involve an exchange?

Where can I learn more about selling them for cash?

 

[TmeWalcO]

That part is quite easy to execute. Just open a business account with an exchange and convert to fiat. Or pay yourself in crypto from the company.

Wouldn't that be the same issue? The exchange would have my identity. The don't report as a bank would? If that's the case, which ones would you recommend?

 

[JohnLocke]

Is there a way to get those stablecoins directly in a Wallet? Or do I have to involve an exchange?

Where can I learn more about selling them for cash?

coinbase let you integrate USDC directly, no need of an exchange only to cash out later.

Wouldn't that be the same issue? The exchange would have my identity. The don't report as a bank would? If that's the case, which ones would you recommend?

it will be the same, kraken is very reliable and works well for this purpose.

 

[Sols]

Wouldn't that be the same issue? The exchange would have my identity. The don't report as a bank would? If that's the case, which ones would you recommend?

Crypto exchanges (which aren't also regulated financial institutions such as EMIs or credit institutions) are currently not in scope for FATCA and CRS. They will honor requests for information, though, but that shouldn't be an issue if you play your cards right.

However, you might run into another issue when you cash out and wire that money to another account. If you can, postpone that until you have relocated.

 

[fshore]

Bank accounts that don't earn interest are not reported under fatca, as the banks themselves are not required to report this to the IRS.

Any account that tarns more than 10usd interest is reported to IRS.

 

[Fred]

As mentioned before take a look into UAE/Cyprus Residence.

Check YouTube and all the big Crypto Youtubers there and see where they are located.

I repeat myself all the time - the best pick is obviously.

Don't wonder yourself if you get caught sooner then later by trying to cheat on EU countries with a 500$ setup that depends on 1-2 EMI -> in this case Mercury/Wise.

 

[JohnLocke]

Crypto exchanges (which aren't also regulated financial institutions such as EMIs or credit institutions) are currently not in scope for FATCA and CRS. They will honor requests for information, though, but that shouldn't be an issue if you play your cards right.

That means, if you leave your FIAT on the kraken account, don't wire it anywhere, then you won't get reported at all?

That would mean you could have say 1 million EURO there in FIAT and as long as it is not transferred you will not be reported?

 

[Sols]

That means, if you leave your FIAT on the kraken account, don't wire it anywhere, then you won't get reported at all?

Kraken is a bad example because they just got a bank license which can change things once they roll that out, but as a general principle - yes.

 

[Cetme308win]

Under FATCA, there is a greater-than-zero risk that your bank or, in this case Mercury's underlying banking partner, will report your account to your home country. That will be done on the basis of your residence and/or citizenship. The company itself is bypassed/ignored.

The same applies to EMIs, although then under CRS/AEOI rather than FATCA.

that could be bypassed with a Puerto Rico bank account (they are exempt of FATCA reporting)

 

[JohnLocke]

that could be bypassed with a Puerto Rico bank account (they are exempt of FATCA reporting)

what bank you have in mind that we can trust in Puerto Rico ?

 

[Cetme308win]

what bank you have in mind that we can trust in Puerto Rico ?

First bank (used to be Banco Santander but they sold their Puerto Rico branch l) and Banco Popular

 

[Jerry1911]

Is there a way to get those stablecoins directly in a Wallet?

Yes you can keep USDT on a Ledger for example.

 

[Dandyline]

US FACTA does not automatically report to any EU country.

As long as you lay low, i would say its very unlikley that your country will ever get to know about it. Especially with such small amounts.

People are to worried these days.

Other than that, you could just incorporate a cheap UAE free zone company and fix residence to be 100% sure. Then you can stack your money secretly until you are ready to move.