Q: Legal ways to start an US business from a country that has no double taxation treaty with the US and avoid double taxed?

E.g Delaware often mentioned as an offshore location and a business friendly state. Can I avoid being double taxed somehow (legally)? I would gladly pay taxes in the US. If i can't find a solution soon, i have to find another english market, unfortunately.

1 Lawyer Answer
James L. Arrasmith
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  • Tax Law Lawyer
  • Sacramento, CA

A: Starting a business in the US from a country without a double taxation treaty can indeed present challenges, but there are legal pathways to minimize the impact of being taxed in both jurisdictions. Delaware is a popular choice for international business owners due to its business-friendly laws, including favorable corporate tax structures and a degree of privacy for company owners. To navigate the complex landscape of international taxation, careful planning and structure are key.

One approach is to establish a US-based corporation or LLC, which can offer some tax advantages. For instance, an LLC is often treated as a "pass-through" entity for tax purposes, meaning the income is not taxed at the company level but passed through to the owners or members who then report the income on their personal tax returns. However, non-US residents can opt to have the LLC treated as a corporation for tax reasons, potentially benefiting from the US corporate tax rates and avoiding double taxation on the same income.

It's highly recommended to consult with a tax advisor or attorney who understands both US tax law and the tax regulations in your home country. They can provide tailored advice based on your specific situation and help devise a strategy that aligns with your business goals while minimizing your tax obligations. Properly structuring your business and understanding your tax responsibilities can ensure compliance and potentially reduce the burden of double taxation.

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