People in the U.S. are familiar with Delaware as the home to most large US companies. But many people don’t realize that the U.S. has become one of the world’s most attractive jurisdictions for non-U.S. citizens. The reason is the Delaware Limited Liability Company (LLC).
The LLC is a unique type of company. Similar to a European “limited company”, it is in some ways a corporation and in others a limited partnership. A Delaware LLC is totally disregarded for income tax purposes by US tax authorities. A Delaware LLC pays only one “tax”: the $200 per year Delaware franchise tax.
An LLC’s profits “pass through” to the individual owner. For Americans who file a personal US tax return, these profits are added to their ordinary income and taxed at the individual rate. The advantage for non-Americans who do not file a U.S. tax return is that the LLC’s profits pass through to LLC’s owner but the income is not taxed by the U.S.. Of course, if you feel it is necessary to report the LLC’s income in your home country, you are able to do so. However, ownership in a Delaware LLC is completely private and is never disclosed, not even to the state of Delaware.
KWBLUE – I totally agree with you but since I live on a small island off the
coast of africa its a moot point.