USA LLC and Montenegrin tax residency

[iarmst]

Hi all, apologies if this has been covered before (I could not find it). If anyone out there has experience with Montenegrin tax matters. I will be buying property and relocating to Montenegro in the next few months. Instead of setting up a Montenegrin company, is it possible to set up a USA LLC and be taxed in Montenegro on the basis of personal income tax. I won't be doing anything dodgy but will simply have invoices paid to my LLC and take it as salary. So in theory should just be taxed on that as PIT? Thank you, Ian

 

[JustAnotherNomad]

You would have to talk to a Montenegrin tax attorney about this. It depends on how Montenegro views the US LLC.
It is absolutely possible that it'll work that way, so the LLC would be taxed as a partnership (pass-through taxation). But it's also possible, especially if you're the only owner, that they would treat it as a corporation and tax it like a local LLC from Montenegro.

To be honest, I'm not sure how many people in the Balkans really do their taxes properly. Paying taxes seems to be rather optional there.

 

[iarmst]

Thanks @JustAnotherNomad. You're right, I'll contact a tax specialist. I do not want to complicate matters so whatever they recommend for ease of tax etc etc. Cheers, Ian

 

[JustAnotherNomad]

It would be great if you could update the thread with what they told you, so the next person with the same question won't have to start from scratch.

 

[tyrexoid]

I'm in Montenegro now too, plan to move permanently next year. My US LLC is not in use much for now, I'm just spending money through it for various software/graphics/etc' services freelancers do for me. I was thinking that after full relocation I'll need to make local Montenegrin DOO (LLC) for accepting payments myself as a contractor, didn't think it might be an option to keep using US LLC for accepting payments. Please share your findings later if you figure out something interesting in this regard

 

[tyrexoid]

You would have to talk to a Montenegrin tax attorney about this. It depends on how Montenegro views the US LLC.
It is absolutely possible that it'll work that way, so the LLC would be taxed as a partnership (pass-through taxation). But it's also possible, especially if you're the only owner, that they would treat it as a corporation and tax it like a local LLC from Montenegro.

To be honest, I'm not sure how many people in the Balkans really do their taxes properly. Paying taxes seems to be rather optional there.

lol same in Thailand (at least for low income levels, like freelancing) folks who are on visa runs all year or other visas, don't bother with local taxes since they were not enforcing at all. I don't know if it changed now, I was there in 2011-2014 it was pretty relaxed in this regard for foreigners.

 

[iarmst]

I'm in Montenegro now too, plan to move permanently next year. My US LLC is not in use much for now, I'm just spending money through it for various software/graphics/etc' services freelancers do for me. I was thinking that after full relocation I'll need to make local Montenegrin DOO (LLC) for accepting payments myself as a contractor, didn't think it might be an option to keep using US LLC for accepting payments. Please share your findings later if you figure out something interesting in this regard

Hello @tyrexoid. I'll post any updates here when I have them. I'd prefer to work through my USA LLC to be honest, legitimately using it as a pass-through company and simple get taxed on all the money received as personal income tax. But let me go figure it out and I'll post back with any updates.

 

[countryfree]

Who cares? If you have money coming from the US, MNE will only see the bank transfers and nobody will look any further. It doesn't make any difference that the money comes from General Motors or your fully-owned LLC.

 

[tyrexoid]

Hello @tyrexoid. I'll post any updates here when I have them. I'd prefer to work through my USA LLC to be honest, legitimately using it as a pass-through company and simple get taxed on all the money received as personal income tax. But let me go figure it out and I'll post back with any updates.

An update from me, I was able to open a local DOO for 350eur in Budva, including getting tax ID and opening bank account, I'm waiting now for the papers and will go make the corporate bank account. I plan to use invoices and charge my EU client (employer) through that, it seems simple and straightforward because I am worried about US tax, they have no treaty with Montenegro so I will get double taxed possibly, if IRS will decide that my LLC income needs to be taxed because I was recently US resident alien (different tax rules for non-resident aliens, but this year I still spent 5 months in US so I'm a resident for them and am taxed worldwide kind of, but only if they see the funds flowing through US LLC and banks, so I'm just going to bank in MNE and they will not bother to tax me, next year I'll be off their US records as someone who left and is not resident alien anymore).

Were you able to figure out your taxes, will your US LLC be taxed US rate? AFAIK the self-employment tax there is pretty sick, higher than when you're employed with W2.

 

[tyrexoid]

Funny thing is, looks like in case of US+MNE, because of no double taxation treaty, we might owe to both of them as the end result

 

[tyrexoid]

Hello @tyrexoid. I'll post any updates here when I have them. I'd prefer to work through my USA LLC to be honest, legitimately using it as a pass-through company and simple get taxed on all the money received as personal income tax. But let me go figure it out and I'll post back with any updates.

one more thing, AFAIK you'll need to pay the LLC corporate tax first, and then one more tax when you withdraw money from it, as income tax, because you can't just use the LLC bank account to get cash or pay for personal goods. So there will be a lot of loss in % I think. But need to check with a consultant from MNE and US, someone who understands these nuances. I learned that just recently, that I can't simply use my LLC funds as I wish - it must be business related expense and documented with an invoice or some paper. Paying myself salary will apply one more tax on top, of what the LLC must pay already as a company, for doing business. Too complicated. MNE company plus bank and a personal bank, will be my setup, for EU employers who will pay from EU to MNE accounts, either personal or business, I'm also going to ask the bank if they'll allow my personal account to receive salary from EU company, few people reported there's a problem with that sometimes, even if not crypto related but just freelance money.