USA Corporation
The shareholders of the USA Corporation decide for themselves what level and when deposits are made into the USA Corporation. A minimum deposit is not required by law for the founding of the USA Corporation. This rule applies to the authorized capital as well as for the subscribed and paid-in capital. A USA Corporation can therefore be established with only US$ 1. The nominal amount of shares is usually unlimited in height.
USA LLC
The Nevada LLC and the Delaware LLC are not subject to the provision of a minimum capital.
USA Corporation
At this point it would neither be possible nor appropriate to present you a comprehensive tax advice regarding the USA Corporation. In general the USA Corporation is tax liable at the place of performance and seat.
Is a USA Corporation in the USA and has its seat there, then the US A Corporation can tax its income in the USA. The USA Corporation with its worldwide income is subject to unlimited taxation in the USA. The Corporate income tax is uniformly defined as:
Corporate Taxes
| Profit | Rate |
| US$0–50,000 | 15% |
| US$50,001–75,000 | US$7,500 + 25% on the excess |
| US$75,001–100,000 | US$13,750 + 34% on the excess |
| US$100,001–335,000 | US$22,250 + 39% on the excess |
| US$335,001–10,000,000 | US$113,900 +34% on the excess |
| US$10,000,001–15,000,000 | US$3,400,000 + 35% on the excess |
| US$15,000,001–18,330,000 | US$5,150,000 + 38% on the excess |
| US$18,330,001 and above | 35% |
The USA Corporation may possibly be subject to a yearly flat tax in the USA. This is the case if the USA Corporation maintains its headquarters, for example, in Germany where the services are provided on site and taxed locally. What matters here is the concept of permanent establishment.
The taxes vary in the said case on the chosen example according to the legal form chosen. Please note in principle the possible existing double taxation between the USA and that country.
From a tax perspective the USA LLC is usually easier to handle for foreigners.
USA LLC
The USA LLC has the option to choose whether the company should be treated within the USA taxation as a partnership or a corporation. If the decision is not made clear to be a corporation then the USA LLC will go into the legal status of a partnership. If the USA LLC in addition is only operated and complied by one person then the LLC is seen for tax purposes as a sole proprietorship.
In plain English, this means each shareholder profits are taxed as part of his regular income tax. A scheme for non-residents will not take place in the USA. The ownership and management structure of the USA LLC can also be displayed discreetly.
USA Corporation
The USA Corporation is only liable with its wealth.
Owners and directors of the USA Corporation will not be held liable for the obligations of the company. Should it happen in a particular case that the director is personally held liable by the owners then this is only possible if due diligence and fiduciary duties have been violated by the director’s conduct (if a real loss has been made). This scheme covers the majority of the USA.
USA LLC
Generally, there is no liability for the shareholders to a third party; regularly, there is also no funding obligation. A liability to third parties is considered upon a specific agreement (e.g. a personal guarantee to the LLC) and in case of intentional misuse of the limitation off liability of the USA LLC.
Of course, criteria for decisions cannot be displayed for every single case universally. However, there is a tendency to the LLC for non-residents of the USA whilst residents in the USA in general prefer the Corporation.
In principle, the USA, and there especially the states of Nevada and Delaware, have become real tax havens for foreigners.
The decisions and considerations of the G20 and G8 in the year 2009 have in no case involved or touched the structures of the states of Nevada and Delaware. One can say that resulting from that the USA-havens are subject to the protection of the government and are not considered, despite comparable structures, as offshore companies.
In 2008, about 50% of the publicly traded USA Companies and 63% of the Fortune 500 have their seats in Delaware.
Nevada allows the IRS (Inland Revenues) no inspect of the files of Nevada Corporations. Because Nevada gets its income through its numerous casinos and therefore it does not depend on subsidies, like many other states, it would only reluctantly and only in case of a crime tip its hands.
Surely a generalization of the facts would be out of place. However, it has in practice in the recent years become the USA LLC for Europeans.
Especially for small and medium businesses as well as investors the choice of a USA LLC as a legal form has become very attractive. More and more affiliated groups rely on the young company type. In the case that your office of the USA business is in Europe you should, however, consider the USA Corporation.
USA companies with economic activity in the USA are subject to regular US tax rates. Only the companies economically active outside of the USA enjoy the significant tax advantages.
We have compiled the differences here:
When considering tax benefits of US companies, there are initially four key criteria which must be distinguished by. Is it a USA Corporation or a USA LLC? Does the US-business operate solely outside the USA or also within?
I. USA Corporation with economic activity in the USA
The USA Corporation with its worldwide income is subject to unlimited taxation. The corporate income tax can be defined as follows:
| Corporate Taxes |
|
| Profite | Rate |
| US$0–50,000 | 15% |
| US$50,001–75,000 | US$7,500 + 25% on the excess |
| US$75,001–100,000 | US$13,750 + 34% on the excess |
| US$100,001–335,000 | US$22,250 + 39% on the excess |
| US$335,001–10,000,000 | US$113,900 +34% on the excess |
| US$10,000,001–15,000,000 | US$3,400,000 + 35% on the excess |
| US$15,000,001–18,330,000 | US$5,150,000 + 38% on the excess |
| US$18,330,001 and above | 35% |
II. USA LLC with economic activity in the USA
The special appeal of a USA LLC lies for many entrepreneurs in the tax law. The shareholders have the choice whether their LLC is to be treated in the USA as a partnership or as a separate taxable entity or as a limited company/corporation. You are then bound to the choice for five years. Is the choice not made explicitly then it will be automatically classed as a partnership. Especially with the classification as a partnership you will enjoy tax benefits because the gains are not taxed at the level of the LLC but as income of the individual shareholders. In addition, the double taxation of distributed profits can be avoided.
III. The USA Corporation without economic activity in the USA
In a pure business relation outside the USA there will only be an annual lump sum taxation. The tax is about US$ 200.00 – US$ 400.00 per year and it requires an annual report of the USA Corporation - this service is naturally provided in the course of our work.
IV. USA LLC without economic activity in the USA
The profits of the USA LLC are, as mentioned above, usually subject to the individual income tax of the shareholder. This rule applies even if the USA LLC will be represented by third parties. There is no burden of proof of paid taxes in this regard; there is also no must for an annual report.
In conclusion, this means that the USA LLC due to the lower administrative costs and the fact of the tax concessions is preferred to the USA Corporation.
There is one exception for the case that you want your USA Company to have its seat in Europe. Here you will find the USA Corporation to be the first choice.
A significant advantage of the USA Corporation and the USA LLC for Europeans is that the US-Company does not need a separate branch in the USA. This is the case if your company operates only outside of the USA.
Our phone – fax – mail and email service USA
The representation of a company in the international market can be crucial to economic success. Furthermore, we are aware and we have created for you a very cost effective and professional service package for the purpose of your international presence. Here you can get an additional representative US- or EU-address (not the registered agent), an individual US phone and fax number, the personal answering of incoming calls on behalf of your company and other features for you US business.
There are many reasons to operate under the protective shell of a company in international business. As the owner, partner, shareholder or director of a USA Company you cannot be held personally liable for business obligations.
Due to the fact that there is no need for a deposit (capital) when establishing a USA Corporation or USA LLC the potential liability extends therefore only to the USA Company and its business value.
Caution! With the Corporation exceptions may occur should the capital not appear appropriate at establishment. The most recent case law of the USA, in particular, expects this if a high fictitious “capital” with no real business value in relation to a foreign capitalization (share sales) is given.
Other representations of capitalization of the USA LLC remain in 99% of the cases a fairy tale!
If you have your residence within the EU and the economic activities are only done outside the USA then the USA Corporation and USA LLC offer a very special advantage.
In contrast to the resident USA Company you do not need a USA bank account for your USA Corporation or USA LLC! You have the option to open an account for your USA Company in your home country (in this case you will have to represent yourself officially as an agent of the company) or we will guarantee a discreet EU bank account in Cyprus (EU) with security, bank secrecy (no notification to local authorities), Master- and/or Visa Card and modern online banking.
No exchange of information within and with the USA, no automated messages as part of such agreements, no information to unauthorized third parties and no access by trustees or unauthorized persons.
If you want to establish a resident USA Corporation then you will need a USA bank account for your business. In this case we will, of course, also help. Please contact us for further information.
The registered agent provides the Delaware and Nevada companies with a corporate registration address in the according state. Being resident in the according state and being reachable during normal business hours are legal prerequisites for operating a company in Nevada or Delaware.
Activity: The registered agent is officially registered in the Commercial Register. The registered agent receives from the state official correspondence such as Franchise Tax Notices and Annual Reports. In the case of official notifications, e.g. lawsuit against the company, then this is also delivered to the registered agent (service of process).
The address of the registered agent (registered office) is intended solely for administrative mail. It is prohibited to have business correspondence sent there. For this reason we offer you a real business address in the United States.
Generally, the establishment of a USA company only takes a few days. You will receive all company documents in original form from us.
LLC members (shareholders)
Only one shareholder is required for establishing a Delaware LLC. In this case, we speak of a Single Member LLC. An unlimited number of members is allowed. Anyone can become a member independent of nationality and residency. Companies as a member (Corporate Members) are permitted and widespread.
Operating Agreement (Articles of Association)
The voting rights, management requirements and obligations of the Manager are outlined in the operating agreement (Articles of Association). If no operating agreement was made – there is no legal obligation to do so – then the Delaware Corporate law shall apply. The term “freedom of contract” was invented in Delaware and can be written in any language, an English translation is not required.
LLC Manager
The members may either self manage the LLC (member-managed LLC) or have it managed through a third party (third-party manager) (manager-managed LLC). Anyone considered as appropriate by the members can be appointed as the manager.
Under the collective term USA Partnership the company forms Limited Partnership, General Partnership, Limited Liability Partnership and Limited Liability Company are merged. Due to the extraordinary legal structure and the advantages offered to European companies we offer you out of the range of USA partnerships the Nevada Limited Liability Company (Nevada LLC) and the Delaware Limited Liability Company (Delaware LLC).
The Limited Liability Company is a relatively new USA corporate form. It is characterized on the one hand by a limited liability of the shareholders (members) because they are stuck only with their contributions and on the other hand by the tax advantages.
The profits of the LLC are not taxed at the level of corporate tax in the USA and are considered taxable income of the members of the LLC. The participation of members in the management does not change anything on the liability of the shareholders.
In this case, the liability is limited to the deposit. Limited Liability Company – no taxes in the USA on profits earned outside the USA.
The German Federal Minister of Finance informed in his circular of the 19th March 2004 – IV B 4 – S 1301 USA – 22/04 – the involved authorities in the various provinces and the federal government in interpretation about the following:
For German tax purposes the US LLC can – possibly even departing from the US tax status – be classified both as a person and as a Limited Liability Company.
Thus, the consequences from a tax perspective might be:
The LLC could be classified in the USA as a partnership (the LLC however can choose freely) and in Germany as a LLC. This could result in over-taxation through the DBA. To eliminate this risk a qualification which examines whether the entity in the overall legal context is bound to be a body will be done when a branch is opened in Germany.
Approach is the use of a Corporation.
For the undisputed legal recognition of a corporation in Germany the European Court of Justice has cleared the way with its policy decisions “Centros”, “Ueberseering” and “Inspire Art”.
The Federal Court has subsequently made its case; it is possible for USA Corporations that were established abroad, which engage business in Germany, to set up lawful branches without having to provide share capital as the German GmbH or AG needs to.
If the Corporation is based in Germany it operates, in principle, in Germany. A separate branch with the help of a notary is registered in the Commercial Register. The competent organs of the corporation shall be responsible for registering this in the Commercial Register. When registering the business the existence must be proven.
Offshore and USA company
It is no secret how hundreds of LLCs in the USA proceed in this case. The members of the USA LLC are solely tax-exempt offshore companies; these collect the revenue in the USA tax-free with no tax charge in the area of income tax.
The principle of this: If the USA LLC does not maintain a permanent establishment in the USA and its activities are solely done outside the USA then the USA LLC will not be made taxable*. In this case the profits of the LLC will be allocated to the members of the LLC who can allocate their income in their home country regarding the income tax.
So, as you can see, there are many variations and possibilities. We would be glad to help you develop a customized solution for you. Let us talk about it now.
Limited Liability: There is neither a liability nor a funding commitment of members to third parties or the company.
Low capital requirements: there is no minimum initial capital required for a USA LLC – an LLC may be established with either a minimum cash deposit or with a contribution or services. Basically, there is no need at all for a deposit if the shareholders decide so.
Real tax advantages: for many of the founders the particular appeal of an USA LLC is the tax law. The shareholders have the choice (for tax purposes) whether their LLC in the USA is treated as a partnership or as a separate taxable entity or even as a corporation. After the choice has been made they are then bound to it for 5 years. If it is not explicitly decided upon the classification as a corporation the tax law will see it as a partnership. You will then enjoy tax benefits because the earnings are then not taxed at the level of the LLC but as income of the individual shareholders. In addition, this way the double taxation can be avoided. If the members of an LLC are tax-exempt offshore companies then there will be no tax consequences for the LLC or the members.
Flexibility: Because of the relatively short existence of the USA LLC as a business form there is a large flexibility in its corporate structure. For Example, no solid management structures are required, therefore there are versatile design options.
The USA LLC offers all the benefits and opportunities, however, there is one restriction. The establishment for example in Germany can be intricate and complicated. In general, it is not advisable for tax reasons. Here the Corporation is clearly the better choice.
Dream or reality depends primarily on the fact if you are going to make investments in your USA Corporation and how the economic success is in figures. From our point of view it is fallacy to think that we could go through the land with a pure “corporation-coat” and “collect” money by selling shares legally. Deception and fraud will be a solid basis for a criminal investigation. We also represent this view when it comes to so called “mature-exchange USA corporations”. In this case empty USA corporations are sold for a lot of money and many credits are involved. Neither the price is justified nor does the “action” make sense. Expensive is not automatically good, at least not always!
If, however, you are seriously thinking about the capitalization of a USA company you do not have to stick your head into the sand now. For the USA Company the same businesslike and legal approaches apply as this is the case for every form of society and in each “parent” state of the world. We will extensively advise you on this either directly in Nevada or by telephone.
But first, make yourself clear that there are no legal millions (neither at stock exchanges nor by investors) without preparatory work, a good concept and money.
The establishment of a USA Corporation offers many advantages for company foundation in the USA, especially when it comes to an active branch to be set up within the EU.
Limited Liability: One of the biggest advantages of a USA Corporation is the fact that private property of the shareholders is protected. Only the Corporation is liable. From the beginning, the liability of the owners and directors can be established in the Articles of Incorporation. Piercing the corporate veil that makes the owner personally liable in a USA Corporation is very unusual unless it can be proved, for example, insufficient capital whilst establishing the company. Caution is necessary here!
Anonymity of the owner: The owner of a USA Corporation will not be entered in the register and will therefore remain anonymous. If needed, the organs can be represented through a nominee.
A USA Corporation is charged, in the USA, only the lump-sum tax if the activities of the company are solely happening abroad. The annual cost of this tax is usually accounted for the minimum rate of US$ 150.00. In addition to that, it has the duty for an annual report; we offer you an appropriate service to meet these obligations.
For a USA Corporation operating in the USA which is invoiced there and has a USA account the tax liability is between 15% and maximum 34% to 36%.
As we have already explained in the “Questions and Answers” of the “Limited Liability Company” it is much easier to establish a Corporation compared to the LLC.
For the undisputed legal recognition of a corporation in Germany the European Court of Justice has cleared the way with his policy decisions “Centros”, “Ueberseering” and “Inspire Art”.
The Federal Court has subsequently made its case, the possibility has been given to companies that have been established abroad but want to do their business in Germany, to create a branch without needing a share capital like a German GMBH or AG would need.
If the Corporation based in Germany also does business there it is said to operate in Germany. In this case it is a separate branch which through the help of a notary is then registered in the Commercial Register. The competent organs of the Corporation have to apply for the registration of the branch in the Commercial Register. When registering, the existence must be proven.
In no way you are limited to the USA market with your USA Corporation. Every properly registered USA Corporation can act globally and establish subsidiaries. All you need is the so called Apostil.
Simple and legally secure: the Corporation in the EU.
A distinction between the so called “authorized shares” and the “issued shares” is made. All shares, the number of how many will be stated in the Articles of Incorporation, are called “authorized shares”. The “issued shares” are the shares that were actually adopted by the shareholders. In the USA, shares do not necessarily have a principle amount that they are worth. We establish your USA Corporation according to your needs.
USA Corporation or USA LLC, we offer reasonable and affordable features for your USA Company. You can book our services right at the beginning when you establish it or to a later date.
Your USA Company in Nevada and/or in Delaware obtains through the use of the service the opportunity to use our representative and real business address in Delaware or Nevada. Incoming mail will be sent to you upon request. Of course, we also offer you the possibility for us to open, scan and forward it via email. The cost per mail piece consists of the real cost plus 1.90 Euro processing fee. The postage can be arranged and it can be carried out in collected form.
Your USA telephone number. The caller will pay the regular fees charged for the call to the USA without additional costs or commissions. Incoming calls can be conveniently transferred to any phone in the world or received from our customer service team in your company name.
You want to present your USA LLC or USA Corporation professionally and internationally on the market, the imprint and your business cards? Perhaps your customers come from Europe and wish to have a contact person of your company within the EU? We offer you a real postal address with mail forwarding to anywhere in the world. The fees of transfer are in accordance to the real resulting postage fee plus handling fee of 2.25 Euro per shipment. The mailings will only occur after consultation with you.
You have already established a company and would like to use our service. No problem! Whether your company has already been established or not – we are happy to help. In this case, please write us a short message and we will get back to you.