Tax Structures

Please seek professional advice if you want to know the ins-and-outs about tax structues. There has been gone limited amount of time and research into researching tax structures in the United States of America and we are by no means expert on this subject. This is for general information purposes only but do not make any warranties of completeness, accuracy or suitability of the information.

Hidden Society shall not be held liable for any errors, omissions, or inaccuracies in the information provided.

Introduction

Getting a company in the United States of America is a necessity to get the most out of your Amazon business there. Most than half of the retailers (and also tons of wholesalers) do not have the option to fill out billing details for any other country than the United States, making your cards from outside of the United States useless.

Another reason why it can be amazing to get a company going in the United States is because when you create a credit card with a registered address in the United States, you are suddenly eligible for a lot more rewards than in the European Union such as cashback, air miles and also credit. Getting credit for your business is a lot easier over there.

In what state should I register my company?

Delaware is typically chosen by foreign companies or individuals to start a company because of their very low tax structure and minimal document requirements for compliance. Since a lot of people have already created their business in the state of Delaware, it makes it a lot easier to connect with others to solve troubles since they have already been through all the hassle.

This advice is not meant to be followed by anyone in the United States since the very low tax structure might not apply to them: https://www.findlaw.com/smallbusiness/incorporation-and-legal-structures/incorporating-in-delaware-is-it-worth-it-for-my-small.html

Structuring an entity

In the United Kingdom there is such things as Sole Trader, Partnerships and Limited Companies. In the European Union it's also known as Sole Traders (with the translation into the language of the country) and company structures such as the SpA, GmbH, BV and BVBA.

It's pretty much the same in the United States where they have Sole Proprietorship, Partnerships, the S-Corp and the C-Corp. With Sole Proprietorship you have complete authority over every aspect of your business and it's a type of business that can only have one owner. A partnership is the same as a Sole Proprietorship but then with more than one person in the business.

Since the United States culture is all about taking everyone and everything to court and the liability of a Sole Proprietorship/Partnership is different compared to the S-Corp and C-Corp, make your own decision about whether you want totally screwed up if you make a mistake. Combining the C-Corp with an LLC makes only the assets within your LLC liable for any lawsuits.

When it comes to the corporations, the S-Corp is a type of corporation that meets specific requirements from the Internal Revenue Code. The C-Corp is the same as a Ltd. (for the United Kingdom), which is taxed seperately from its owners. Be aware that we are only speaking about the tax structures and an LLC is not the same as the tax structure. You can declare after creating your LLC at the state taxation office that you want to be taxed as a C-Corp.

The IRS automatically assigns foreign entities that have an LLC with the tax structure ‘disregarded entity' and you need to use form 8832 to declare that you want to be taxed as a corporation.

Depending on your situation, there can be an instance of double taxation where both the United States taxes your coorporation and so does your home country. This depends on each individual country and is based (solely speaking about the United Kingdom) on quite a lot of factors such as whether you a bank account in the United States, whether you have inventory in the United States and where your employees are located.

You are not able to create a S-Corp if you are not a registered resident within the United States. This means you will be left with the C-Corp most of the times to avoid private liability.

Please seek professional advice if you want to know the ins-and-outs about tax structues. There has been gone limited amount of time and research into researching tax structures in the United States of America and we are by no means expert on this subject. This is for general information purposes only but do not make any warranties of completeness, accuracy or suitability of the information.

Hidden Society shall not be held liable for any errors, omissions, or inaccuracies in the information provided.