Hi dimamimo,
Briefly, you should be able to have your LLC, bank account and
merchant account set up within one month (probably less), but there
are many variables to consider. Also, it will probably cost about $500
- $1000 by the time you are done.
>>> LLC
1. If I receive payments on-line does it mean I can omit US taxes,
since company will be Delaware LLC?
2. Which taxes will I pay?
If all of your services are performed outside the U.S. (that is, you
are not in the U.S.), as a nonresident alien, your income will not be
subject to U.S. income tax (you do not need an LLC for this to be
true). It does not matter where the money is coming from, what is
important is where the services are performed. The same is true if you
register an LLC, as long as you file Form 8832.
Single member LLCs.
"If you prefer to file as a corporation instead of as a ?disregarded
entity? Form 8832 must be submitted."
http://www.irs.gov/pub/irs-pdf/p3402.pdf
FORM 8832: Entity Classification Election:
"...a business entity with a single member can choose to be classified
as either an association taxable as a corporation or disregarded as an
entity separate from its owner."
Disregarded entity:
"A disregarded entity is an eligible entity that is treated as an
entity that is not separate from its single owner. Its separate
existence will be ignored for Federal tax purposes unless it elects
corporate tax treatment."
http://www.irs.gov/pub/irs-pdf/f8832.pdf
Only companies transacting business in Delaware have to pay state tax.
There is no Delaware corporate income tax for corporations that are
formed in Delaware so long as they do not transact business in
Delaware."
http://www.delawareintercorp.com/why.htm
Where Should You Incorporate?
Highlights of benefits to incorporating in Delaware include:
# Low cost incorporation fees;
# No state corporation income tax for Delaware corporations not
operating in Delaware;
# No name or address disclosure requirement for the initial board of directors;
# One person may hold all corporate offices;
# The corporation must have a registered agent in Delaware, but not a
business office; and
# Claims relating to the corporation will be heard by the Delaware
http://www.allbusiness.com/articles/content/article.asp?ID=590&CenterID=31&CatID=1799
US as a Tax Haven Country
"Foreigners may use the US as a tax haven jurisdiction if they operate
in the United States. Nevada and Wyoming are among the leading tax
haven states in the US. Foreigners are not required to file any state
or federal tax returns or pay any US taxes as long as they do not
operate in the US."
http://www.corporateservicecenter.com/LLC/LLClforeignowned.htm
"Non US persons are only taxed on US source income or income connected
with the conduct of a US trade or business. If the LLC earns only
income which falls outside this definition and the members of the LLC
are non US persons with no US presence then no tax would be payable
either by the LLC or by its members."
http://www.ujoffshore.com/enghtml/services/incorp_jurisd_delawllc.asp
"However, we have found that a more significant benefit arises for
non-resident aliens utilising LLC's. If the LLC is owned entirely by
non- resident aliens, no LLC business is conducted in the US and all
its income is foreign source income, then no tax need be paid to the
IRS. The US, in this case, becomes a tax haven for non-resident
aliens."
http://www.consumoffshore.com/english/corpusa/llcintro.html#usllc
3. How fast can I form LLC, open bank account and receive Merchant Account?
4. How much is it (establishing services, bank account openening, etc.)
It all depends on who you use, but here are some examples
Delaware Incorporation Services in 5 Minutes.
Complete Delaware Incorporation Service ($298.00) --
one price includes:
(1) Name Reservation,
(2) Certificate of Incorporation,
(3) Filing Fee,
(4) Corporate Minutes ready-for-signature,
(5) Stock Certificates,
(6) By-laws,
(7) Minute Book,
(8) Priority Mail,
(9) First-calendar-year ($90.00 thereafter) Registered Agent Service,
(10) IRS forms and
(11) Tax Saving Strategies.
Fed Ex: International customers pay an additional $75.
http://www.incnow.com/delaware-incorporation-services.html
Harvard ($450 - $850 per year)
https://www.delawareinc.com/ourservices/index.cfm#int
Valis
US Bank Accounts for non-US Residents
Your Own Corporate US Checking Account in a USA bank
? real US Corporate Checking Account
? in your Company Name and your personal name alone
? Qualifies you for a US Business PayPal account
Merchant Account and Internet Processing
USA and International Merchant Accounts
? US Merchant Accounts and/or Merchant Services
? Online Processing and a Virtual Terminals
? Accept Credit Cards online now
http://www2.valisinternational.com/
EasyCorp
"If your bank account is not opened within thirty days from the date
that we receive your required documents then we will give you a full
refund. No hassle, no delay and no question asked!
To open your corporate bank account in the United States, you need to
have a valid EIN (Tax ID). We can obtain this number for you in less
than 24 hours if you don't have it. The additionnal fee will be $USD
199 ($USD 85 if you have already a valid SSN).
Special Offer:
Incorporate your Delaware incorporation within 5 mns for $350 only!
That offer does include same day incorporation guaranteed, Delaware
filing fees, registered agent fee for the first calendar year,
articles, operation agreements and bylaws, certified certificate and
apostille.."
"...One day after registering your company, we email you the certified
certificate and the apostille by pdf and we deliver the full corporate
documents set to you by priority mail... We do provide many other
services such as UK incorporation service, US and UK bank account
opening service, US and UK merchant account opening service, EIN
nominee service, virtual offices and mail forwarding service in
Delaware, New York, Oregon, United Kingdom, etc..."
http://www.easycorpltd.com/en/bank_business.php
Additional Links of Interest
ITIN
W-7 Application for IRS Individual Taxpayer Identification Number
Use Form W-7 to apply for an IRS individual taxpayer identification
number (ITIN). An ITIN is a nine-digit number issued by the U.S.
Internal Revenue Service (IRS) to individuals who are required for
U.S. tax purposes to have a U.S. taxpayer identification number but
who do not have, and are not eligible to obtain, a social security
number (SSN).
http://www.irs.gov/pub/irs-pdf/fw7.pdf
EIN
Form SS-4 [make sure to check the following]
8a* Type of entity (check only one)
Corporation (enter form number to be filed) : Form 8832
9* Reason for applying (check only one)
Banking purpose (specify purpose) : Merchant Account
https://sa.www4.irs.gov/sa_vign/newFormSS4.do
Instructions form SS-4
http://www.irs.gov/pub/irs-pdf/iss4.pdf
FORMS & CERTIFICATES
The Delaware Division of Corporations has all forms available in our
"How to incorporate" packet available online in PDF format.
http://www.state.de.us/corp/incbook.pdf
PROCESSING FEES
http://www.state.de.us/corp/expserv.shtml
LIST OF REGISTERED AGENTS
http://www.state.de.us/corp/agents/agts.shtml
MORE LINKS
http://www.state.de.us/revenue/services/BusServices.shtml
I hope this helps to get you started, I know it is a bit daunting. If
you have any questions, please post a clarification request and wait
for me to respond before closing/rating my answer.
Thank you,
hummer
Search strategy:
I used my own bookmarks plus some of the search terms used:
llc bank merchant account nonresident international business u.s. alien |
Clarification of Answer by
hummer-ga
on
18 Oct 2006 07:27 PDT
Hi dimamimo,
"Among my clients there are a lot of US citizens. So when I receive
on-line payment from them I will be treated like entity which
transacting business in US, right? So I (LLC) will be the subject of
taxes applying. right?"
No, that is not correct, as long as you file Form 8832 to register
your LLC as a corporation. As I said in my answer:
"If all of your services are performed outside the U.S. (that is, you
are not in the U.S.), as a nonresident alien, your income will not be
subject to U.S. income tax (you do not need an LLC for this to be
true). It does not matter where the money is coming from, what is
important is where the services are performed. The same is true if you
register an LLC, as long as you file Form 8832."
Nonresidents are not taxed on any income that is not earned in the
U.S. This means that you have to be in the U.S. to earn U.S. income.
If you are outside of the U.S., then you do not have U.S. income. It
does not matter where your customers are located, the only thing that
matters is where *you* are.
U.S. or Non-U.S. Source Income:
"Nonresident aliens, for tax purposes, unlike U.S. citizens and
residents, are only subject to tax on income that is considered U.S.
Source Income by the IRS. Foreign Source Income received by
nonresident aliens is not subject to U.S. taxation.
* U.S. Source Income - income is generally considered U.S. Source if
the location of the activity for which the payment is being made is in
the U.S.
* Foreign Source Income - income is generally considered foreign
source if the location of the activity for which the payment is being
made is outside the U.S."
http://vpf-web.harvard.edu/ofs/tax_services/emp_pay_sou.shtml
Regarding the LLC, as long as you elect to make the LLC a corporation
(Form 8832), you will still avoid paying U.S. tax.
IRS FAQ:
"If your business has only one owner, it will automatically be
considered to be a sole proprietorship (referred to as an entity to be
disregarded as separate from its owner) unless an election is made to
be treated as a corporation."
http://www.irs.gov/faqs/faq12-1.html
FORM 8832: Entity Classification Election:
"...a business entity with a single member can choose to be classified
as either an association taxable as a corporation or disregarded as an
entity separate from its owner."
Disregarded entity:
"A disregarded entity is an eligible entity that is treated as an
entity that is not separate from its single owner. Its separate
existence will be ignored for Federal tax purposes unless it elects
corporate tax treatment."
http://www.irs.gov/pub/irs-pdf/f8832.pdf
Single member LLCs.
"If you prefer to file as a corporation instead of as a ?disregarded
entity? Form 8832 must be submitted."
http://www.irs.gov/pub/irs-pdf/p3402.pdf
Dimamimo, just be sure to include Form 8832. In this way, the IRS will
consider your company a "Corporation" rather than a Sole Proprietor
(?disregarded entity?) and everything will be fine. When you read the
phrase "foreign source income", it is referring to where the income
was earned (location of your activity - your country) and not where
the actual money came from (U.S. customer). In other words, all of
your LLC's income will be from a foreign source (you).
"Non-residents of the U.S. who are members of an LLC and who are not
otherwise subject to U.S. federal income taxation pay no tax in the
U.S. if the LLC?s income is from non-U.S. sources and the LLC carries
on no business in the U.S."
http://www.tridenttrust.com/PDFs/C-USA-Profile-LLP-2.pdf.
I hope that is clear but please let me know if you have any questions.
hummer
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