Non US resident and USA tax

[ivan1911]

Hello everyone,

I have a question :

I'm a non resident of USA , if I open US bank account and receive money from USA people for items (100% legal) do I have to pay tax to USA?

I ask as when I looked up opening a Delaware company as a non resident , all income made from USA is taxable even for non residents.

Now , I also red that you do indeed need to pay tax on money you receive from USA but only if you actively engaged in a trade or business in USA . Further reading ,to my understanding, explained that I would need to pay tax if I had people working for me in USA or if I actually did something in USA. If I am in my own country (outside US) and have a US bank account and even US company I am exempt from paying tax to USA.

Further more is it really true that USA doesn't share any information with governments world wide ?

Thank you and my apologies for the long opening post.

 

[Milky Moon]

I'm a non resident of USA , if I open US bank account and receive money from USA people for items (100% legal) do I have to pay tax to USA?

for items = sales = trade = taxable, so yes.

I ask as when I looked up opening a Delaware company as a non resident , all income made from USA is taxable even for non residents.

Correct.

Now , I also red that you do indeed need to pay tax on money you receive from USA but only if you actively engaged in a trade or business in USA . Further reading ,to my understanding, explained that I would need to pay tax if I had people working for me in USA or if I actually did something in USA. If I am in my own country (outside US) and have a US bank account and even US company I am exempt from paying tax to USA.

You even need to pay US taxes if your US bank account is interest bearing ..

Further more is it really true that USA doesn't share any information with governments world wide ?

No, on request, the IRS exchanges data. (searh the forum for AMEX & The Netherlands)

 

[fshore]

A bank account has nothing to do with taxes in the US. However using a Delaware LCC will trigger tax. Even though it's supposed to be transparent for tax.

 

[Ivkide]

Hello everyone,

I have a question :

I'm a non resident of USA , if I open US bank account and receive money from USA people for items (100% legal) do I have to pay tax to USA?

I ask as when I looked up opening a Delaware company as a non resident , all income made from USA is taxable even for non residents.

Now , I also red that you do indeed need to pay tax on money you receive from USA but only if you actively engaged in a trade or business in USA . Further reading ,to my understanding, explained that I would need to pay tax if I had people working for me in USA or if I actually did something in USA. If I am in my own country (outside US) and have a US bank account and even US company I am exempt from paying tax to USA.

Further more is it really true that USA doesn't share any information with governments world wide ?

Thank you and my apologies for the long opening post.

Hi! Have you finally found the way to your questions? What jurisdiction you choose?

 

[ivan1911]

Hi! Have you finally found the way to your questions? What jurisdiction you choose?

well after all for such small yearly income $50k transferwise seems like the best option.. it simply works with personal borderless account . they aren't reporting as of yet but that probably will change as they become more mainstream..

thought about i-account but seems to be a scam when searching google for reviews , euro pacific also seems to have bad business practice...
i never opened a personal bank account with Montenegro , Serbia or Bosnia as one person i know had to provide invoices and sign where the tax was paid before they let him take the money out of account.
this particular situation was in Bosnia..

so i don't have a smart answer for you.. i'm thinking that 50k a year is too small amount of money to be interested for anyone in grand scheme of things..

with all that said i just had like 10k over transferwise and didn't go any further as i just don't know if it's a smart move.. so i did all my extra income normally and paid all the tax that needs paying.

one thing i am considering is opening an anonymous emi account for that 50~100k extra , there should be info in that regard in the mentor group...
seen some for sale elsewhere but unsure how reliable it is so passed on that too..

cheers,

I

 

[Ivkide]

well after all for such small yearly income $50k transferwise seems like the best option.. it simply works with personal borderless account . they aren't reporting as of yet but that probably will change as they become more mainstream..

thought about i-account but seems to be a scam when searching google for reviews , euro pacific also seems to have bad business practice...
i never opened a personal bank account with Montenegro , Serbia or Bosnia as one person i know had to provide invoices and sign where the tax was paid before they let him take the money out of account.
this particular situation was in Bosnia..

so i don't have a smart answer for you.. i'm thinking that 50k a year is too small amount of money to be interested for anyone in grand scheme of things..

with all that said i just had like 10k over transferwise and didn't go any further as i just don't know if it's a smart move.. so i did all my extra income normally and paid all the tax that needs paying.

one thing i am considering is opening an anonymous emi account for that 50~100k extra , there should be info in that regard in the mentor group...
seen some for sale elsewhere but unsure how reliable it is so passed on that too..

cheers,

I

Why you decline USA option? What problems you find?

 

[ivan1911]

Why you decline USA option? What problems you find?

well basically i'm not knowledgeable enough about it... i red different things about opening llc in USA , but all in all if you want to send that money to yourself it's no longer anonymous and you will get a call from your taxman..

every scenario has it's ups and downs...

1. transferwise personal borderless , there's no knowing when they will start to report and if they would give out your info if asked by your gov.
2. transferwise with darks , well that's totally safe as long as noone suspects anything.. if you get cought then you're in much more trouble then for tax evasion.. as you forged documents etc.. so it can be great solution but it can be the worse solution as well
3. get the llc in USA , leave your money there till you figure out a safe way of getting the money out without paying a s**t ton of tax in your home country..

as i said i don't use any of those methods as i'm simply not sure what is the best and safest way to go about it..
i did use method 1 but not much , just a few transactions.. everything went fine...

 

[Ivkide]

well basically i'm not knowledgeable enough about it... i red different things about opening llc in USA , but all in all if you want to send that money to yourself it's no longer anonymous and you will get a call from your taxman..

every scenario has it's ups and downs...

1. transferwise personal borderless , there's no knowing when they will start to report and if they would give out your info if asked by your gov.
2. transferwise with darks , well that's totally safe as long as noone suspects anything.. if you get cought then you're in much more trouble then for tax evasion.. as you forged documents etc.. so it can be great solution but it can be the worse solution as well
3. get the llc in USA , leave your money there till you figure out a safe way of getting the money out without paying a s**t ton of tax in your home country..

as i said i don't use any of those methods as i'm simply not sure what is the best and safest way to go about it..
i did use method 1 but not much , just a few transactions.. everything went fine...

The same situation...I am not totally sure about how it will works (about USA LLC). Cause I got very different information.
Am I right that you sure about zero taxation in USA, but have problem with cash outs money for private use?

 

[Tax Cow]

"A Delaware company" is taxable in the US if its an LLC incorporated as a partnership, or a de-facto company (INC.). A single member non-resident Delaware LLC, in and of itself, will not have an obligation to pay income tax in the US or in the state of Delaware. Only certain events and certain types of income will give rise to such an obligation.

Here are a few examples:

1. Tax is due if the single member Delaware LLC receives dividend or interest income from a US corporation. For example, dividend from Coca Cola stock.
-1.1 Usually, the broker will withhold tax automatically.

2. No income tax (state or federal) is due if the single member LLC sells physical goods via Amazon drop-shipping to US corporations or individuals.
-2.1 The same applies to virtual goods. With or without Amazon's involvement.
-2.2 In the case of physical goods delivery, Amazon is not an employee nor a dependent agent that works exclusively for the non-resident's LLC.

3. No income tax (state or federal) is due if the single member LLC offers consulting, professional, or software development services to US corporations or individuals.
-3.1 All services must be rendered from outside the US territory.
-3.2 For example, let's say you develop software for Coca Cola company from outside the US, being in contract through your Delaware LLC. Let's say you configure network firewalls of GE from outside the US. In both cases, no US income tax is due. In practice, finding such 100% remote work contracts with top US companies is very difficult due to thick layers of bureaucracy, but if you're a top player in your field, you can make it happen and not pay any income tax in the US.

Lucrative tax mitigation opportunities aside, US LLCs and UK LTDs are for advanced players. If you're not sure what you're doing and why no tax applies, go for HK or Singapore. Both are fine to work with US clients.

With UK or US structures, you shake off some of that fishy offshore slime, but in exchange, you must be able to explain your income streams and tax matters flawlessly, because the default assumption is that you're on the hook.

If you like what a US LLC structure has to offer, skip Delaware; consider Alaska and Florida for same benefits but less reputational baggage. My personal favorite is NY LLC, but it's a little too difficult for the average person.

 

[Ivkide]

"A Delaware company" is taxable in the US if its an LLC incorporated as a partnership, or a de-facto company (INC.). A single member non-resident Delaware LLC, in and of itself, will not have an obligation to pay income tax in the US or in the state of Delaware. Only certain events and certain types of income will give rise to such an obligation.

Here are a few examples:

1. Tax is due if the single member Delaware LLC receives dividend or interest income from a US corporation. For example, dividend from Coca Cola stock.
-1.1 Usually, the broker will withhold tax automatically.

2. No income tax (state or federal) is due if the single member LLC sells physical goods via Amazon drop-shipping to US corporations or individuals.
-2.1 The same applies to virtual goods. With or without Amazon's involvement.
-2.2 In the case of physical goods delivery, Amazon is not an employee nor a dependent agent that works exclusively for the non-resident's LLC.

3. No income tax (state or federal) is due if the single member LLC offers consulting, professional, or software development services to US corporations or individuals.
-3.1 All services must be rendered from outside the US territory.
-3.2 For example, let's say you develop software for Coca Cola company from outside the US, being in contract through your Delaware LLC. Let's say you configure network firewalls of GE from outside the US. In both cases, no US income tax is due. In practice, finding such 100% remote work contracts with top US companies is very difficult due to thick layers of bureaucracy, but if you're a top player in your field, you can make it happen and not pay any income tax in the US.

Lucrative tax mitigation opportunities aside, US LLCs and UK LTDs are for advanced players. If you're not sure what you're doing and why no tax applies, go for HK or Singapore. Both are fine to work with US clients.

With UK or US structures, you shake off some of that fishy offshore slime, but in exchange, you must be able to explain your income streams and tax matters flawlessly, because the default assumption is that you're on the hook.

If you like what a US LLC structure has to offer, skip Delaware; consider Alaska and Florida for same benefits but less reputational baggage. My personal favorite is NY LLC, but it's a little too difficult for the average person.

Thank you for such wide answer! If we are talking about US, Wyoming can be an option? What about withhold TAX of 30%, am I obligate to pay it if I send money from corporate account to my private one?

In HK I heard you must prove you business connections outside of HK, if they not accept it you will taxation, and also hard to open bank account.

By the way, do you provide any consultations?

 

[Tax Cow]

@lvkide I don't do consulting. I'm relaying the information I bought as a customer of tax planners over the years. You'll need to find your own.

Wyoming is an option, of course. They respect single member LLCs and offer some of the best protections for solopreneurs. It's just that windmill locations, including WY, are never my first preference. Your upkeep paperwork obligations in Alaska are about the same.

What about withhold TAX of 30%, am I obligate to pay it if I send money from corporate account to my private one?

A single member non-resident LLC is transparent for the tax purpose. You can't possibly pay any withholding tax in the US, but your customer may be required to withhold tax from the payments they make to you, depending on the type of payment. Royalty, interest and dividend payments to non-residents (including non-resident LLCs) typically suffer a 30% withholding (or treaty rate), in tax. This does not apply to services or sales I covered in my previous post.

Your main risk is your home country. US LLCs are not as opaque as they used to be, and if for example, you live in France, they will tax your US LLC as if it were a local company. The LLC can be completely anonymous when you create it, but all of it will be foregone once you connect it to a EIN and a business bank account.

 

[challenge]

Your main risk is your home country.

This sums up the entire offshore business right now. There should be a bot automatically answering this in every new post in big capital letters

 

[Ivkide]

well basically i'm not knowledgeable enough about it... i red different things about opening llc in USA , but all in all if you want to send that money to yourself it's no longer anonymous and you will get a call from your taxman..

every scenario has it's ups and downs...

1. transferwise personal borderless , there's no knowing when they will start to report and if they would give out your info if asked by your gov.
2. transferwise with darks , well that's totally safe as long as noone suspects anything.. if you get cought then you're in much more trouble then for tax evasion.. as you forged documents etc.. so it can be great solution but it can be the worse solution as well
3. get the llc in USA , leave your money there till you figure out a safe way of getting the money out without paying a s**t ton of tax in your home country..

as i said i don't use any of those methods as i'm simply not sure what is the best and safest way to go about it..
i did use method 1 but not much , just a few transactions.. everything went fine...

Hi!
Do you finally setup a Wyoming company? How it goes?

 

[ivan1911]

Hi!
Do you finally setup a Wyoming company? How it goes?

I didn't set up anything yet..
I talked to a few people and I have a hard time deciding what would be the best option for me.

Wyoming seems closest to my needs for now with transferwise account and PayPal ...
Just need to see the cost of filing all the forms needed etc.. as I wouldn't like to do that myself.

 

[Ivkide]

I didn't set up anything yet..
I talked to a few people and I have a hard time deciding what would be the best option for me.

Wyoming seems closest to my needs for now with transferwise account and PayPal ...
Just need to see the cost of filing all the forms needed etc.. as I wouldn't like to do that myself.

How you decide with PP?
I was search for some agents, some of them who looks better ask to prove my personality through US embassy. Its also not so fast and easy.

 

[ivan1911]

How you decide with PP?
I was search for some agents, some of them who looks better ask to prove my personality through US embassy. Its also not so fast and easy.

I guess it depends where your home country is... I'm from EU so perhaps that's why they only asked for passport and utility bill , noone so far asked anything from US embassy .

As far as paypal you will need EIN , which you will have if you decide to open llc in USA, you can apply for it yourself or through agent.

I'm personally unsure if i want to use USA llc as i do business with USA people ... I wouldn't have significant presence there and I would be outside USA so wouldn't be liable for tax , but one person told me that if you receive money from USA people that things can get a bit more complicated.. nothing crazy but still...
Also another person told me that i wouldn't need to charge sales tax if I don't have more then 100k sales in a single state but another person told me i have to charge sales tax.. so thats one more thing i need to research.