Title: Seeking Advice: Digital Nomad with an LLC in Wyoming

[resident101]

Hello everyone,

I'm a digital nomad, working for a U.S. company. I'm an EU citizen and a non-resident alien in the USA. I'm considering using a Wyoming-based LLC to receive payment for my consultancy services. I'm seeking advice on whether this is a good approach.

Additionally, I need to manage my finances effectively. Imagine, the LLC has a business bank account, and I'm contemplating the best way to access these funds for personal use. Is it advisable to use the funds directly from the LLC's business account for personal expenses, or should I open a personal bank account in the U.S. and transfer the money there for personal use? I don't want to transfer these funds to a bank outside of the USA. I think the US banks have a better client data protection.

I would greatly appreciate any insights or experiences you might have regarding this matter, especially from those familiar with the intricacies of being a digital nomad with a business entity in the U.S.

Thank you in advance!

 

[Rome]

Interested in the answers of this thread. I'll follow

 

[alexx999]

An LLC is a transparent entity therefore you'll get taxed based on the tax rate of your country, in Italy an LLC is taxed as capital gains at 26%, which might be favorable for certain things, also, you can deduct some expenses, not too bad.. But do not believe you can just receive the money on the LLC, use the cards and avoid paying taxes.

The advantage of the LLC is that you have low overhead because the management of an llc is straightforward and cheap, as a non alien European, any state is the same, you won't be taxed in the US anyway, so choose the cheapest one, which in this case is new Mexico.

 

[Rome]

An LLC is a transparent entity therefore you'll get taxed based on the tax rate of your country, in Italy an LLC is taxed as capital gains at 26%, which might be favorable for certain things, also, you can deduct some expenses, not too bad.. But do not believe you can just receive the money on the LLC, use the cards and avoid paying taxes.

The advantage of the LLC is that you have low overhead because the management of an llc is straightforward and cheap, as a non alien European, any state is the same, you won't be taxed in the US anyway, so choose the cheapest one, which in this case is new Mexico.

Wouldn't he be taxed on his US sourced income?

 

[daniels27]

Wouldn't he be taxed on his US sourced income?

Probably not. He states that he is "a non-resident alien in the US", which sound strange as he would become resident as soon as he passed the substantial presence test. Hence, we can only assume he is in the US less than 120 days per year constantly. Also, it is unclear why he is in the US. If it is for his work, he may even need an appropriate visa.

Under the assumption that he is a non-resident alien mostly not in the US, he would not be taxed on his US sourced income for following reasons:

• double taxation agreement with his home where he pays the taxes
• not engaged in a trade or business in the United States as he has no dependent agent nor a permanent establishement
• no effectively connected income (unless he is there on a "F," "J," "M," or "Q" visa)

Effectively Connected Income (ECI) | Internal Revenue Service

Generally, when a foreign person engages in a trade or business in the United States, all income from sources within the United States other than certain investment income, is considered to be Effectively Connected Income (ECI).

www.irs.gov

Non-US Entrepreneurs: You Can Sell Products or Services into the US Without Paying US Tax – US Tax Services

The tax treatment of non-US entrepreneurs selling into the US is probably the most misunderstood issue in all of US international tax. Let’s take a closer look, and I’ll show you why much of the conventional wisdom you’ll read here is absolutely wrong.

ustax.bz

Ultimate US LLC Guide for [NON-RESIDENTS] in 2023

US LLCs can give entrepreneurs all over thew world access to first world banking, payment processing & prestige – all with low bureaucracy and a zero-tax option.

globalisationguide.org