QUESTION: What are the tax and legal implications of forming a US LLC owned by an offshore company?
RESPUESTA DEL EXPERTO: Running a business in the US can be incredibly rewarding, and forming a Sociedad de responsabilidad limitada (LLC) is a popular choice for its flexibility and ease of setup. But what happens when you, a foreign business owner, want to establish an LLC in the US? This can introduce unique tax considerations you need to understand to avoid penalties and ensure compliance.
Taxation of US LLCs Owned by Offshore Companies:
The good news is, you can own a US LLC as an offshore company. However, the IRS classifies your LLC as a Foreign-Owned Disregarded Entity (FDE) – if owned by one person or a single foreign corporation. This means the LLC itself doesn’t pay taxes, but the income and expenses “pass through” to your personal tax return. Essentially, the IRS treats the LLC as an extension of yourself for tax purposes.
Clasificación fiscal de su LLC
An LLC is a type of business entity that provides limited liability protection to its owners, who are called members. An LLC can have one or more members, and can be owned by individuals, corporations, or other entities.
Para efectos fiscales en los EE. UU., una LLC puede clasificarse como una entidad ignorada, a asociación, or a corporación, dependiendo del número y tipo de sus socios. La clasificación fiscal predeterminada de una LLC es la siguiente:
- A single-member LLC is treated as a disregarded entity, unless it elects to be taxed as a corporation. A disregarded entity is not a separate tax entity from its owner. This means that the income and expenses of the LLC are reported on the owner’s personal tax return, as if the LLC did not exist.
- A multi-member LLC is treated as a partnership unless it elects to be taxed as a corporation.
A partnership is a separate tax entity from its owners, but it does not pay income tax itself. Instead, it files an information return and passes through its income and losses to its partners, who report them on their personal tax returns.
A corporation is a separate tax entity from its owners, and it pays income tax on its profits. The owners of a corporation report their share of dividends or distributions from the corporation on their personal tax returns.
If you are a non-US resident who owns a single-member LLC in the U.S, you are classified as a foreign-owned disregarded entity (FDE) for US tax purposes. This means that while your LLC is legally separate from you, it is not considered a separate entity for tax return purposes. The income and expenses of your LLC are passed through to your personal tax return, and you are subject to US tax on your effectively connected income (ECI) from your US business activities.
Filing Requirements for FDEs:
Owning an FDE comes with specific filing requirements:
- Proforma Form 1120: This form, while not requiring tax payment, identifies your LLC as an FDE and complies with information reporting requirements.
- Form 5472: This form reports transactions between your FDE and you (the foreign owner) and any related foreign parties.
- La Ley de Transparencia Corporativa: Extranjero-owned LLCs must also be aware of the Ley de Transparencia Corporativa (CTA), que establece requisitos uniformes de información sobre propiedad beneficiosa para ciertas corporaciones, compañías de responsabilidad limitada y otras entidades similares creadas o registradas para hacer negocios en los EE. UU. La CTA es parte de la Ley contra el lavado de dinero de 2020 y tiene como objetivo evitar que criminales, terroristas e individuos corruptos oculten dinero o propiedades ilícitas en los EE. UU.
Para las empresas que presentan informes creadas o registradas antes del 1 de enero de 2024, el informe inicial de información sobre propiedad beneficiosa debe presentarse antes del 1 de enero de 2025. Si su empresa se crea o registra a partir del 1 de enero de 2024, tiene 90 días para presentar el informe inicial a partir del 1 de enero de 2024.Más información y busca orientación aquí.
Si no presenta alguno de estos formularios a tiempo, o lo hace de forma incorrecta o incompleta, podría enfrentar sanciones considerables. Por lo tanto, es importante cumplir con estos requisitos de presentación y mantener registros precisos y completos de los ingresos, gastos y transacciones de su LLC.
Understanding Your Tax Obligations:
As an FDE owner, you’re subject to US taxes on any Ingresos efectivamente conectados (ECI) generated by your LLC’s US business activities.
Seek Professional Help:
Understanding US tax laws as a foreign business owner can be complex. Partnering with a qualified CPA specializing in FDEs is crucial to ensure compliance and avoid costly mistakes. A CPA can:
- Guide you through the specific tax and filing requirements for your FDE
- Prepare and file the necessary forms accurately and on time
- Advise you on tax-efficient strategies to minimize your tax liability
- Help you maintain proper accounting records and financial reporting
- Assist with any tax audits or inquiries from the IRS
O&G Tax and Accounting: Your Trusted Partner:
O&G Tax and Accounting has extensive experience working with foreign-owned single-member LLCs in the US. We offer a comprehensive range of services to help you navigate the complexities of US tax laws, including:
- Preparation of proforma Form 1120, Form 5472, BOI, FBAR etc.
- Monthly bookkeeping and accounting
- Recomendaciones de software de contabilidad
- Servicios de contabilidad general
- Consultas y asesoramiento personalizado
Hacer clic aquí to learn more about our services and schedule a consulta with one of our FDE experts.
Owning a US LLC as an offshore company offers exciting opportunities, but understanding your tax obligations is crucial. By working with a qualified CPA like O&G Tax and Accounting, you can ensure compliance, minimize your tax burden, and focus on growing your successful business.
