Non resident incorporating LLC to sell internet services to US
Asked by: Paolo - 16 March, 2014
I am an Italian citizen, living outside the US. I would like to setup a LLC in the US to sell internet services to (mainly) US customers. Think the service as similar to ebay for a very niche market (an entity A sells a product to an entity B using my platform, I get a commission out of each sale plus a fix amount for the use of the platform).
1. Can you confirm that I will have not to pay any income tax in the US?
2. Will I have to pay any sales taxes?
3. What is the best state to incorporate?
4. Is it ok to have a postal address (virtual mailbox) outside that state? Does this create a nexus?
Thanks in advance.
Paolo
I am an Italian citizen, living outside the US. I would like to setup a LLC in the US to sell internet services to (mainly) US customers. Think the service as similar to ebay for a very niche market (an entity A sells a product to an entity B using my platform, I get a commission out of each sale plus a fix amount for the use of the platform).
1. Can you confirm that I will have not to pay any income tax in the US?
2. Will I have to pay any sales taxes?
3. What is the best state to incorporate?
4. Is it ok to have a postal address (virtual mailbox) outside that state? Does this create a nexus?
Thanks in advance.
Paolo
Answered by: Ray Albert - 29 March, 2014
Dear Paolo,
Allow me to answer your questions one by one:
1. - To my understanding, with an LLC, the income is passed-through to the owners' personal income, where they pay personal income taxes to the state/country they live in. We have a resource section titled 'U.S. Taxation for Foreigners' which you should find very helpful.
2. - If you are purchasing your products in wholesale you will not be required to pay any sales tax. However, you would be required to have a state sales/use permit to be able to purchase tax-exempt merchandize, which you would also use to charge your customers sales tax on retail sales.
3. - If you plan on having an established physical presence in a particular state, such as an office, warehouse, shipping/receiving facility, etc., you would need to register in that state specifically. If you do not plan on having a physical presence, you can technically register in any state, such as Wyoming or Delaware. We have a research article titled 'Choosing Where to Incorporate' which you should find very helpful.
4. - Yes, you may use any physical address, such as a virtual office from another state, or even a home or office address in another country as the business and mailing address.
Dear Paolo,Allow me to answer your questions one by one:
1. - To my understanding, with an LLC, the income is passed-through to the owners' personal income, where they pay personal income taxes to the state/country they live in. We have a resource section titled 'U.S. Taxation for Foreigners' which you should find very helpful.
2. - If you are purchasing your products in wholesale you will not be required to pay any sales tax. However, you would be required to have a state sales/use permit to be able to purchase tax-exempt merchandize, which you would also use to charge your customers sales tax on retail sales.
3. - If you plan on having an established physical presence in a particular state, such as an office, warehouse, shipping/receiving facility, etc., you would need to register in that state specifically. If you do not plan on having a physical presence, you can technically register in any state, such as Wyoming or Delaware. We have a research article titled 'Choosing Where to Incorporate' which you should find very helpful.
4. - Yes, you may use any physical address, such as a virtual office from another state, or even a home or office address in another country as the business and mailing address.
