US LLC Formation taxes for non-resident

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yellowneck

New member
Hiya,

I'm investigating the possibility of starting an LLC in the USA so I can easily open bank accounts etc as a freelancer offering digital marketing services. I'm a UK citizen but resident and domiciled in South America where the tax is fab. I spend zero time in the USA, have no good or employees there, but a lot of my clients are there.


I'm reading conflicting stuff about taxes. Most sources say no tax, buuuuut on teh IRS it says this "Generally, when a foreign person engages in a trade or business in the United States, all income from sources within the United States connected with the conduct of that trade or business is considered to be Effectively Connected Income (ECI). This applies whether or not there is any connection between the income, and the trade or business being carried on in the United States, during the tax year."


To me, that reads that I will need to pay taxes. Am I wrong? Is there anything from an official gov source that says zero taxes as up till now all my info is from websites selling USA LLC formation packages!


Any advice or pointers would be great. Thanks so much in advance.
 

Jigam

Mentor Group Gold
make your LLC a pass-through entity and you wont pay any USA taxes as long as you register it in a tax free state.
 

fshore

Entrepreneur
The general understanding is that engages in a US business means that you work in the USA. The llc is disregarded, so it's the same taxes as if you trade under your own name (from outside the USA).


make your LLC a pass-through entity and you wont pay any USA taxes as long as you register it in a tax free state.
Most states even thought with taxes will only tax a llc if they do business physically in that state.
I don't know of any states where a llc would pay income taxes when they don't pay federal income taxes. Maybe some of them that have gross receipt taxes?
 

bonox

Corporate Services
Silver Member
Mentor Group Gold
Business Angel
You will need to find a reliable tax advisor to help you with this setup towards the tax office, it is very simple to make this a pass-through entity, it has just be to declared as such in the UK.
 
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