Wyoming LLC owned by Seychelles LTD

[Tasgall Wallace]

Hello,

i'm in need to open an entity in the US to deal with some online business (retail), my business partners and I are NOT US citizens nor residents. I have been recommended a Wyoming LLC because it's fast and cheap, in addition it's considered a gateway entity which means i'll have to deal with the taxes in the jurisdiction where i am currently tax resident(which is in Europe).

Given these premises, I am currently owner of an offshore company with 0 corp tax and i am thinking about setting up my offshore entity as owner of the Wyoming LLC. This is because where i live dividends are taxed really low, the Wyoming LLC can't issue dividends but the offshore can.

Since there are a lot of steps involved here i wanted to ask if i am missing anything or if this can be a solid set up.

Thanks!

 

[Martin Everson]

Sorry what is your objective here with the proposed setup....privacy, tax saving etc?

Your zero tax company you talk about is this a Seychelles IBC?

If your based in Europe how can it be zero tax if place of operation and management will be where your based unless you have no CFC rules in your European country?

 

[CaptK]

Its possible but bank account will be almost impossible.
Just set up the LLC in your name and have an agreement with your Seychelles company that it purely acts as a payment gateway and is paid a nominal fee.

 

[startfleetio]

Good luck finding reputable banks for your 0% offshore company, it's very hard, unless you are ready to put in a minimum deposit of $100K and above. Even if you are willing to put in the money, it still depends on your nature of business, jurisdiction of this offshore company, your nationality and residency.

Like other members have mentioned, why would you want to have an offshore entity in between? What's the objective here?

 

[Tasgall Wallace]

As a Cypriot resident with non dom status i have a roughly 3% tax on dividends generated outside of the EU. Now for my understanding an LLC can't issue dividends, which means that the profit coming from the LLC will be taxed a personal income.
Now, the idea is to use my offshore company that is already issuing dividends and that operates outside of the EU (i only receive dividends from this company). My offshore has already its running bank account, that's not an issue here...What seems to be not clear is how the IRS is taxing the LLC for revenue generated by online sales in the US, or in general if there are other taxes i am missing somewhere...

 

[ppa]

Where do you have a bank account for your Seychelles IBC?

In general what you describe is possible. Just consider the high deposits needed in order to get a bank account for the US LLC.

 

[startfleetio]

As a Cypriot resident with non dom status i have a roughly 3% tax on dividends generated outside of the EU. Now for my understanding an LLC can't issue dividends, which means that the profit coming from the LLC will be taxed a personal income.
Now, the idea is to use my offshore company that is already issuing dividends and that operates outside of the EU (i only receive dividends from this company). My offshore has already its running bank account, that's not an issue here...What seems to be not clear is how the IRS is taxing the LLC for revenue generated by online sales in the US, or in general if there are other taxes i am missing somewhere...

1) You need to check with your Cypriot accountant how would Cyprus treat profits from US LLCs. HMRC (UK) and the Canada Revenue Agency treats profits from LLCs as dividends.
2) But if you already have bank account at the offshore seychelles LTD, then this is a viable method. But you would need to check if Cyprus put Seychelles on some sort of a blacklist
3）As for sales generated in the US, please read the guide in my signature. Feel free to chat us up on our website.

 

[CyprusLaw]

1) You need to check with your Cypriot accountant how would Cyprus treat profits from US LLCs. HMRC (UK) and the Canada Revenue Agency treats profits from LLCs as dividends.
2) But if you already have bank account at the offshore seychelles LTD, then this is a viable method. But you would need to check if Cyprus put Seychelles on some sort of a blacklist
3）As for sales generated in the US, please read the guide in my signature. Feel free to chat us up on our website.

With respect to how LLCs are treated in Cyprus the official confirmation from the tax department is the following:

• if the US LLC is subject itself to corporation tax in its resident country then it is considered as a corporation for Cyprus tax purposes, whilst
• if the US LLC is not subject to corporation tax in its resident country then the income deriving from such the US LLC is considered as personal income for Cyprus tax purposes.

 

[Tasgall Wallace]

Thanks for the replies. We are definitely getting to the core of the problem...

The only reason why i need a US LLC is because basically all the US ecommerce platforms deal with US entities almost exclusively. Talking about my specific case, i will be operating in dropshipping, each single purchase from an ecommerce platform will generate an order to my partners in EU. No warehouse/fulfillment center/office or storage in the US is required.

Is the above ETBUS or not? Will it make any difference if the shipping agreement with express courier is made by my LLC or by the partners in Europe?

 

[ppa]

Is the courier working exclusively for you?

Will the US LLC have any staff in the US operating "on the ground"?

If the answear to the above is No then there is no ETBUS.