Greetings. What an amazing resource. You should all pat yourselves on your collective back! I am an Australian, US Non-Resident, in California on a Holiday Visa (90 Days) I have stumbled upon an opportunity for a business venture. I have a product that I could sell here for some good money. I want to form an LLC as a Non-Resident, and act as sole manager of that entity for no payment. I will try in the meantime to sell the product. I have a number of US investors willing to invest in my project (becoming Members of the LLC), and take a loss or a return depending on our successes with sale of product. When the return for our investors comes through, they get paid by the LLC and I get paid as a Foreign National and the IRS aren't able to tax that income that is paid to me as owner and licensor of the product. Can ANYONE that doesn't cost me US$5,000 an hour just to talk help me and let me know if this in any way possible? Any advice received well. Thanks alot, Ziggy McKinnley
Ziggy, You would have to get visa sponsorship if you do not have a US passport or applicable visa. If you are thinking of a new venture, I believe you would want a Treaty Trader (not having to do with markets) or Treaty Investor visa (E visas). Australia has an E treaty with the United States. These visas allow you to petition the INS to grant you a visa on the premise that you will be in America on a temporary basis for the purpose of conducting business relating to the venture that you are seeking to start. There are many issues that you have to consider with these visas. I have already paid the hefty fees to lawyers etc. to make this all happen. After having gone though it, I strongly suggest that you at least have a short consultation (thatâs all it will take) with an immigration lawyer who has experience with E visas. S/he will be able to help assess your situation from a residency perspective. I hope this helps. DTK
Thanks for your help DTK. According to my tax attorney, I am OK to start an LLC here as a Non-Resident, and I am OK to work as the Manager of that LLC if I am not paid to do so. Does this sound right to you?
The other way to do it is that you would not be employed (paid or otherwise) as the General Manager or intricately involved in the day to day operations to the point that you would be considered "working". Then as a director and shareholder of the Corp. you would be able to spend considerable time (Up to 180 days per year to "conduct" business in an overseeing (director) capacity under a normal B1 visa (visitor for business)and not be deemed to be "working" or "resident". The other options are the other business visa's (E & L's , I believe) E visa's are expensive & complicated. L's are not that difficult if you have a sponsoring foreign subsidiary establishing a U.S. office. But takes time. You don't want to personally be "deemed" a resident for tax purposes as then you would have to pay U.S. taxes. You could pay yourself divdends or consulting fees but they may still be subject to U.S. witholding but Aussie no doubt has double taxation treaty with U.S. And of course there may be other creative/ legal ways to repatriate yr profits with out leaving some to Uncle Sam depending on your circumstances. I did similiar thing , as a Canadian owner of U.S. corp for about 10 years. There is a low cost expeditious way to do it but u need to educate yourself on how to walk on top of the fence with out falling off! As the previous poster suggested 1-2 hrs with a competent professional and then you can do the rest of the research yourself.....it's not all that complicated. But identifying a "competent" professional who's objective isn't to burn up your bankroll with billable hours is always a challenge. What I normally do in this kind of a start-up scenario is go interview 1/2 dozen professionals. In an introductory (Free) session, with the allure that they may get some future biz, you will get alot of info if prepared with the right questions and ultimately identify the professionals you want to work with! Good-Luck!
Ziggy, There may be an easier way. LLC's are easily and cheaply formed -- particularly in Nevada. I have several already. You may not have to do all the registry as in the previous post. You would just set up an LLC or Corporation in Nevada. It is good no matter what state you would use it in. California is fine and depending on how you are doing business in the U.S. you would not be in any violation. The income from your sales is paid into the Corporation or LLC. There are no state taxes on the income in Nevada. Nor would there be any taxes due if an Australian company would simply invoice the Nevada Entity for services (consulting or otherwise). This would allow the payment to flow to Austrialia and therefore the LLC or Corporation would have no taxable earnings. If you need more information email or private message me.
Stardust .. That is really great advice, Thank You. I have just discovered that as an Australian entering the USA I am allowed to enter for 90 day periods for Holiday, Business or Transit WITHOUT a VISA. (http://www.usembassy.org.uk/cons_web/visa/niv/vwp.htm) I have found a pretty good attorney I trust in SF to do the leg work only he is charging me $800 to set up the LLC ! Wow can do it online for $360 ! The tax advice is good too, thanks. I imagine that as long as I am not paid to work as a General Manager, if the product sells and we all get paid, the LLC can pay to offshore account (of foreign product license owner), without the 'employee' being stung for US Income tax. BUT, how does Companmy Tax work in this situation? Does the LLC pay tax based on annual INPUTS or based on what's left in the business account after all expenses (incl. payments to offshore employees) at the end of the financial year? mmmm the wonders of modern technology all this great info from swell people just wanting to further the causes of others they don't even know .. I love it !
Without knowing more details of your product, biz plan, marketing and personal tax situation it's difficult to go beyond what's been offered. All of your "Normal" biz expenses would be deducted from sales. Having to periodically exit/ re-enter the U.S. to comply with visitor visa status and being based in Ca. it may be effective to get a Mexican FM-3 immigration status and make Mexico your "Formal" residence. Very easy to secure and cheap, u can do yourself. This would facilitate the exit / re-entry to U.S. No tax would be payable to Mexican government as long as you don't earn active employment or biz income in Mexico. Nevada would be preferable jurisdiction rather than Ca. for corps. Wyoming also good for incorporations. Be sure to heed the 183 day rule so as to not be deemed a US resident for tax purposes. (actually less than 183 days after 1st yr -works on declining balance formula from prev yrs.) Otherwise you may find the IRS jackbooted stormtroopers knocking down your door at 3 am demanding their pound of flesh on your worldwide income!