TaxConnections

Ask Tax Question

I am an American living outside the United States and have an Internet company that we plan on incorporating outside the US. Best plan ???

I am an American living outside the United States and have an Internet company that we plan on incorporating outside the US.

All our clients reside outside the US. Our virtual employees almost all reside outside the US.

We do have business financial accounts in the US. We have a US based website and email. We have an auto-call-forwarding number in the US.

For tax purposes, what is our best strategy to minimize our US tax obligation? Must we move our financial accounts? Do we need to move our web service and email? Do we need to move our US based forwarding phone number?

We want to be sure we get this right and do plan to engage someone to help us achieve our goals. Thanks so much for your consideration.
Foreign Company
TaxConnections Members... Answer This Question Want To be One of Our Tax Experts? Register Here

Tax Professional Answers

User Photo
Bill Robinson, CPA
First of all you live in a country that taxes American citizens on worldwide income. So organizing the company off-shore can limit US tax on the actual company but not on your income from the company (although you will get to offset foreign taxes assessed against your US income based on a complex formula under the foreign tax credit regime and based on US Tax Treaties). Regarding the incorporation outside the US, you really need to hire a competent International Tax Accountant or Lawyer. I would spend money to get this one right. Every country has a different tax regime and tax treaty with the US. There are issues of nexus (which is points of contacts with and without countries) that can subject you to taxation even if you are not incorporated there (branch taxation). Then there are potential issues related to reporting bank accounts and withholding of taxes on transfers in and out of country. My advice is keep it simple and save time and money fighting tax authorities. Good luck. There are excellent international resources at all the big accounting firms and many of them provide a "doing business in _____" booklet that provides a brief overview of tax planning and pitfalls by country. I know PWC makes these available I think on their web site or if you have a contact there.
Leave a Comment 107 weeks ago



Meet Leading Tax Advisors

User Photo Kathryn Morgan

Bossier City, Louisiana, USA

Enrolled Agent, Master Tax Advisor

User Photo Peter J. Scalise

New York, New York, USA

Federal Tax Credits & Incentives Practice Leader

User Photo John Stancil

Lakeland, Florida, USA

Tax Advisor/CEO

User Photo John Dundon, II EA

Denver, Colorado, USA

Tax Director

User Photo Steven Potts JD EA IAR

Fullerton, California, USA

Principal

User Photo Devon McCarthy FCCA, EA

Sanford, Florida, USA

President

User Photo Caran Ebert, CPA

Topanga, California, USA

Tax Advisor

User Photo Lisa Nason CPA, MST

Greenville, South Carolina, USA

Managing Shareholder

User Photo Gary Carter, PhD, MT, CPA

Edina, Minnesota, USA

President

User Photo NEERAJ BHATIA, CPA

Santa Clara, California, USA

Tax Principal - President

User Photo Bill Robinson, CPA

Chattanooga, Tennessee, USA

Owner

User Photo Hugo Van Zyl

Stellenbosch, South Africa

Exchange Control & Master Tax Practitioner (SA)

User Photo Douglas Stransky

Boston, Massachusetts, USA

Tax Partner, International Tax

User Photo Larry Stolberg, CPA, CA

Toronto Mississauga Oakville Burlington Hamilton, Canada

Tax Specialist

User Photo Dr. Daniel Erasmus

West Palm Beach, Florida, USA

Managing Partner/EMEA

View/Select our Current List of Tax Topics

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Previous PageNext Page

Contact Us Today