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Does a non-US resident have to pay taxes if he incorporates in the U.S?

by Chris Rockstar
16 replies
Hi warriors! I have a legal question here... I'm helping a friend of mine with his new business, (he is from Argentina) I know him for more than 10 years, we've worked together in a couple of projects, he's starting a digital design company, anyway, I know nothing about business entieies, tax law etc. I'm co-founder of an LLC with my brother in the States, I'm currently living outside the U.S (South-Asia) and we both run our company.

Anyway, the thing is when we first started my brother made all the paperwork and legal stuff. The point is my friend is asking me for some help, He wants to incorporate in the U.S because he works with some high-end clients, he needs to collect checks etc... so.. he wants to know if he has to PAY federal taxes if he incorporates in the U.S and runs his business in Argentina, remember he is NOT a us resident.

Or how is all this taxes thing done?

hope someone has experience with this, because to be honest I have ZERO, my brother takes care of all this for us.

Regards
#incorporates #nonus #pay #resident #taxes
  • Profile picture of the author .X.
    If the corporation is in the US - yes.

    However, if you know what you're doing
    then the corporation shows no profit and
    pays no tax.

    Either way you are required to file a return.

    All the best to you -
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    • Profile picture of the author VoiceMedia
      Yes you do, the IRS are very interested in collecting taxes. If you let it slip, you could be barred from entering the US for years. I don't know specifically the rules, but you must file a tax return if you are incorporated in the US
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      • Profile picture of the author LillySage
        Corporations formed in the US will owe US Corporate Taxes... I'd seriously consult an accountant or better yet, tax lawyer.
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  • Profile picture of the author sbucciarel
    Banned
    I recommend your friend consult an attorney before incorporating in the US. It's not a good idea to get that kind of legal advice on a public forum.
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  • Profile picture of the author Chris Rockstar
    Thanks everyone for your advice, yeah actually thats what I told him.... He asked me for help, that's why Im asking for a first opinion here....

    The thing is he wants to offer his services to more US companies and businesses and get paid, most of the time, as I mentioned, big sums by check, so he wants to know what his best options are...
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  • Profile picture of the author RobinInTexas
    1. He's likely going to have to have someone physically show up at a bank to open an account.
    2. He can establish a mailing address using a virtual office (google it)
    3. He will have to pay a fee to the state where he incorporates. That should be the same state where he sets up the mailing address or he will have to pay an annual fee to that state as well.
    4. It would be best if everything were all in the same state, Delaware and Nevada are the most popular, and there are several companies that specialize in setting the corporation up
      • google registered agent delaware.
      • google registered agent nevada.
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    Robin



    ...Even if you're on the right track, you'll get run over if you just set there.
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    • Profile picture of the author Kiboko
      Hi Warriors,

      Robin...pardon me for adding this in your thread - its related!

      I need a US mailing address in Delaware where I am incorporated. When I google I see a number of them. I am starting therefore dont have much to spend. Does anyone have any good recommendations?

      thks






      Originally Posted by RobinInTexas View Post

      1. He's likely going to have to have someone physically show up at a bank to open an account.
      2. He can establish a mailing address using a virtual office (google it)
      3. He will have to pay a fee to the state where he incorporates. That should be the same state where he sets up the mailing address or he will have to pay an annual fee to that state as well.
      4. It would be best if everything were all in the same state, Delaware and Nevada are the most popular, and there are several companies that specialize in setting the corporation up
        • google registered agent delaware.
        • google registered agent nevada.
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      • Profile picture of the author RobinInTexas
        Originally Posted by Kiboko View Post

        Hi Warriors,

        Robin...pardon me for adding this in your thread - its related!

        I need a US mailing address in Delaware where I am incorporated. When I google I see a number of them. I am starting therefore dont have much to spend. Does anyone have any good recommendations?

        thks
        If you are incorporated in Delaware, your registered agent can likely handle a limited amount of mail, it is likely you can do it for less using one of the virtual office people.

        Unless you have a friend you can rely on who is actually in Delaware and is willing to do it for you you need to pay a company that does forwarding.

        In any event you are required to file a report with the state and pay a fee annually as well as the fee to the registered agent for the registered agent service.

        When you add it all up the annual cost is likely going to be around
        1. $100 for the registered agent
        2. $75 fee to the state
        3. $100 for mail forwarding very low volume of mail
        It's probably a nice sounding but very bad idea unless your business is ongoing and successful, and might be a really dumb idea to expose yourself to US taxes.

        I am not a lawyer and this is just some information I have dug up over the years. I am providing it for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.
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        Robin



        ...Even if you're on the right track, you'll get run over if you just set there.
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  • Profile picture of the author DonnyBoy
    I will advise you to consult with a lawyer who knows international rules and regulations of Taxes... He will give you a best answer regarding this
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  • Profile picture of the author Alex Mensah
    And if you don't file it they will start to investigate and
    then take how much they want from you so either incorporate wisely
    or just pay your taxes.
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    • Profile picture of the author Sid Hale
      There is no need for a US company to accomplish what your friend wants...
      so why complicate the tax reporting and day to day bookkeeping requirements?

      Any U.S. client can pay foreign companies for product and/or services received. Payment can be by credit/debit card or by check. Good payment processors will be able to do currency exchange on your friend's behalf, and direct deposit funds from the payer's U.S. dollar account directly into your friend's foreign bank account.
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  • Profile picture of the author Istvan Horvath
    1. As Allen, the owner of this forum posted a while ago: don't ask legal advice in a public forum.

    2. Until you and your friend doesn't know the difference between corporate tax and personal income tax... there is nothing to explain. And judging by the way you formulated the questions in your OP, none of you knows the difference.

    3. So, both of you should sit down with an accountant to clarify the basics, then with a lawyer and figure out the best solution.

    4. Sorry, but it's useless to talk if we lack the basic notions...
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    • Profile picture of the author salegurus
      Originally Posted by Istvan Horvath View Post

      1. As Allen, the owner of this forum posted a while ago: don't ask legal advice in a public forum.
      I'm surprised that people have not started asking for medical advice on the forum...
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      Think of how stupid the average person is, and realize half of them are stupider than that.

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  • Profile picture of the author HelpingYouBeAnExpert
    The way I understand the American Constitution is that Income tax is un-constitutional and all of the founders where against it, the president of USA even said the power to tax is the power to destroy. Somehow I'm always told to shut up when I say that. So my answer is no you don't have to pay but looks like you might have to pay.
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    • Profile picture of the author Farish
      Originally Posted by HelpingYouBeAnExpert View Post

      The way I understand the American Constitution is that Income tax is un-constitutional and all of the founders where against it, the president of USA even said the power to tax is the power to destroy. Somehow I'm always told to shut up when I say that. So my answer is no you don't have to pay but looks like you might have to pay.
      LOL, there has some IRS court cases with regards to this.

      IRS has won every one of them.

      Also to the OP.

      If you have a corporation in the United States, you must have one person on the payroll.

      Even if your corporation did not make a single dollar, they will gain some small amount from the payroll taxes etc.

      BTW go talk to a tax attorney.
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  • Profile picture of the author Istvan Horvath
    Somehow I'm always told to shut up when I say that.
    Somehow... I am inclined to tell you the same. But only in this forum!
    Because 1) it doesn't help the OP; 2) it's about your own personal political views, and discussing that goes against the forum rules; 3) "interpretation" of a constitution is like #2; 4) doesn't add anything worth reading to the thread.

    p.s. Outside of the forum, in a real-life setting (where they serve beer or wine) I could listen to your arguments regarding the founding fathers and taxes...
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