LLC without emigrating - set up and enjoy the benefits

Many European citizens believe that it is impossible to set up an LLC (Limited Liability Company) in high-tax countries without emigrating. They think that the LLC benefits in the EU cannot be used because the company would allegedly be taxed as a corporation. In this article, we refute these myths and show how to create a LLC without emigration and benefit from their financial and legal advantages.

Common misconceptions about LLC formation

Before we go into detail, let's clear up some common misconceptions:

1. False:Forming an LLC in high-tax countries such as Germany is unfavorable. Saving taxes legally is not possible without emigration. True:If implemented correctly, it is absolutely legal, cost-effective and tried and tested. Emigration is not necessary!
2. False:You have to enter the USA travel to set up an LLC. True:: A personal presence in the USA is not required for the formation of an LLC. The entire process can be carried out remotely.
3. False:You have to establish a physical presence in the USA. True:: A physical presence in the USA is not necessary for most LLC structures. Many LLCs operate successfully without any physical presence in the USA.
4. False:: Anonymity is at the LLC formation impossible. True:While complete anonymity can be difficult, there are ways to maintain privacy when forming an LLC without violating any laws.

The Corporation Trap

Some law firms suggest setting up a corporation. This seems sensible at first, but can lead to Double taxation lead. Reasons why you should critically scrutinize law firms that recommend a corporation:

• A US corporation is regarded as an independent corporation in the EU.
• Profits are initially subject to US corporate income tax (currently 21% at federal level).
• Dividends paid out are taxed as income from capital assets in the founder's EU home country.
• CFC (Controlled Foreign Corporation) rules could apply.
• Transfer pricing rules must be observed.
• There is a permanent establishment risk in the EU.
• The EU founder must disclose his shareholding in the US corporation.

The right solution: Multi-Member LLC without emigration

In order to be recognized as a partnership in the EU and to be able to use the LLC benefits in the EU you should observe the following steps:

1. Form a multi-member LLC in the USA.
2. Do not make the election to be taxed as a corporation.
3. Choose a member-managed LLC structure.
4. Please note that the transferability of units is restricted.
5. File the articles of association in the USA and at your tax domicile.

The articles of association for the correct LLC classification

The company's operating agreement should define important aspects such as:

• Transferability of shares
• Partnership structure
• List of members
• Profit distribution and other important points

Tax advantages with correct structuring

With the correct structuring of a non-domestic multi-unit LLC without a physical office in the USA The advantages are as follows:

1. US taxation:
   • No corporate income tax in the USA
   • The LLC is recognized in the USA as a tax transparent Unit treated
2. EU taxation:
   • The LLC is recognized as a partnership
   • Taxation takes place at shareholder level (EU citizens)
3. Taxation of EU founders:
   • Only the personal income tax of the founders in their EU home countries is due
   • The profits of the LLC are attributed directly to the shareholders

Important notes:

• The exact tax treatment may vary depending on the specific EU country
• CFC rules could be applied
• The founders must disclose their participation in the LLC and the resulting income
• The LLC should not carry out any significant business activities in the USA (ETBUS)

This structure is absolutely legal and in line with EU tax law. It means that only the shareholders' income tax is due in their EU home countries.

Remote LLC formation and management

An important aspect of the LLC without emigration is the ability to set up and manage them completely remotely:

1. Online foundationMost US states allow the online formation of an LLC. All you need is the necessary documents and information, which you can submit digitally.
2. Registered Agent ServiceInstead of having a physical presence in the US, you can use a Registered Agent Service. This service acts as the official point of contact for your LLC in the USA and manages important documents to you.
3. Digital communicationAll communication with authorities, customers and partners can take place digitally. Modern technologies enable efficient remote administration.
4. Virtual officesIf necessary, you can utilize virtual office services that provide you with a U.S. business address and phone service without having to actually be there.

By taking advantage of these opportunities, EU citizens can Advantages of an LLC without relocating or traveling to the USA.

Further links

• Earn money in the USA with the LLC and pay no taxes there
• Save taxes legally without emigrating
• Anoymous LLC formation

Conclusion

Not only is it possible to enjoy the benefits of an LLC without emigrating, but you don't have to travel to the US or establish a physical presence there. With the right structure, good planning and use of modern services, EU citizens can reap the benefits of a US LLC while remaining comfortably in their home country. It is important not to be misled by outdated myths and instead rely on sound, up-to-date information.