Question Tax aspects for a US LLC owned by a holding company abroad

[Chontango]

Hi everyone,

The question is about a US LLC that does not perform any work in the US (and correspondingly does not have any "effectively connected income" from a US perspective). When it is owned by a private person, that person is liable for tax in his/her jurisdiction, so far everything is clear.

If the ownership of the US LLC is transferred to a foreign holding company (say, a BVI structure), does it change anything in the tax structure from a US perspective? i.e. , would the LLC need to then pay any kind of taxes (that it did not need to pay being owned by a private person)?

Thanks for your help,

 

[Sols]

It does not make any difference whether a member is a human or a corporate entity.

If an LLC is owned by another LLC, the members of the parent LLC pays tax.

If an LLC is owned by a BVI company, the LLC remains tax neutral and passes its profits on to the BVI company.