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Setting up a US branch of a small UK company in Illinois

Asked by: Helen - 8 July, 2012
https://d25eic0jctudgb.cloudfront.net/images/site/avatars/default.png-f1597c1da25f30f8c1a941405e8391c8 I currently run a small wedding planning company in the UK, and moved to the US (Illinois) 4 months ago. I am on a L2 visa and have already received my EAD to work.

The company in the UK has 2 employees (myself and my business partner). My business partner is running the UK side of things, although I am still contributing to UK business and have occasional work-related visits back to the UK, but I am looking to expand to work in the US, under the same company name. I'm considering this to be a US branch of my UK-based company.

I'm totally new to the US system, so would like to know what the best way of going about setting up my US business would be - i.e. LLC, Inc, etc., and also what the taxation implications are of this set-up.

Any advice would be much appreciated - thanks!
Answered by: Robert Kowalski - 8 July, 2012
https://d25eic0jctudgb.cloudfront.net/images/site/avatars/35.jpg-687fc92d5f6c5febcbdccb6895b08b8c Dear Helen,

First of all I would urge you to consult an immigration attorney, since your type of visa might come with certain restrictions that could limit how you can be involved in that business.

As far as business side of it goes, you could run this business under an LLC or a corporation (just keep in mind that in Illinois the actual registration of an LLC is quite costly compared to registration of a corporation). Tax wise, since you are not a US person you cannot own an S-Corp, in which case owning a corporation would subject you to double-taxation (on corporate level and then on personal level when dividends are distributed). It doesn't mean you would pay more money in taxes, it just makes the tax side of running a business a bit more complex.

Before you start this business I would recommend you to consult with a CPA, who would be in a better position to analyze your potential tax liability with business of that kind.

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