Hi All
I would like to highlight a potential idea I had looking at the Romania-US tax treaty and at Romania's local fiscal law.
Let's imagine to have an online business and to work on US market (for example monetization in US) via one or more LLCs.
We could imagine a structure like this
LLC A
LLC B
LLC C
all Single member LLCs disregarded owned by a Romanian Micro-Company.
The Romania micro-company would have one employee at least and be taxed at 1% on revenues.
The 3 LLCs are technically 3 CFC of the romanian company so I believe nobody would complaint if we include their revenues in the taxable base of the Micro-company and tax it accordingly.
All this without the need for the UBO to be resident in Romania since that DTA is one of the few (together with Georgia and few others) not having any LOB condition which would limit the DTA advantages to the overcoming of LOB threshold for benefits..
The advantages - if Romanian authorities will consider them CFC and not permanent establishments requiring separate accounting and invoices obligation - is a potential great simplification of the administrative tasks that having 3 lines of business with 3 micro-entities would require.
Furthermore one would share (up to 1mln euro limit) the fixed costs required to have an employee.
One could argue that the 3 LLCs are useless from a fiscal standpoint but let's consider also other commercial and reputational aspects which may play a role in the overall equation.
What do you think about such structure?
I would like to highlight a potential idea I had looking at the Romania-US tax treaty and at Romania's local fiscal law.
Let's imagine to have an online business and to work on US market (for example monetization in US) via one or more LLCs.
We could imagine a structure like this
LLC A
LLC B
LLC C
all Single member LLCs disregarded owned by a Romanian Micro-Company.
The Romania micro-company would have one employee at least and be taxed at 1% on revenues.
The 3 LLCs are technically 3 CFC of the romanian company so I believe nobody would complaint if we include their revenues in the taxable base of the Micro-company and tax it accordingly.
All this without the need for the UBO to be resident in Romania since that DTA is one of the few (together with Georgia and few others) not having any LOB condition which would limit the DTA advantages to the overcoming of LOB threshold for benefits..
The advantages - if Romanian authorities will consider them CFC and not permanent establishments requiring separate accounting and invoices obligation - is a potential great simplification of the administrative tasks that having 3 lines of business with 3 micro-entities would require.
Furthermore one would share (up to 1mln euro limit) the fixed costs required to have an employee.
One could argue that the 3 LLCs are useless from a fiscal standpoint but let's consider also other commercial and reputational aspects which may play a role in the overall equation.
What do you think about such structure?
