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US citizen forming a TX-based LLC but doing business abroad.

Asked by: Chris  — 3 March, 2014

I am a resident of the US, currently living in Texas. I want to form an LLC in Texas but live as a resident (not citizen) of Germany. What’s the best way to go about this? I’m mostly interested in simplicity and avoiding complicated taxes.

My LLC’s primary business will be consulting for web development clients on a time basis.

Answered by: admin  — 3 March, 2014

Dear Chris,

You may register an LLC in any state, including Texas, of course, listing either a physical U.S. or Non-U.S address. LLC is a pass-through entity, meaning the profit is passed-through to the members’ without being taxed on company level. The members then pay personal income taxes to the state/country they reside (U.S. citizens also must file federal tax return).

In your specific case, it would be a good suggestion to consult with a licensed accountant to understand exactly how your taxes will be applied and what write-off benefits you can utilize by having the LLC registered in your home state of Texas. We have an article discussing taxation of foreigners in the U.S., and there is a brief section discussing taxation of U.S. businesses owned by U.S. person(s) living abroad which I invite you to review.

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