Frequently Asked Questions

US Taxes and Foreign Owned LLCs

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Tax Free Income for a USA, Foreign-Owned, LLC

Effectively, foreigners are only subject to US tax if they are “engaged in a trade or business in the United States(ETOB). If your business is not ETOB, even if it generates income in the US, the income is not taxed in the US.

However, you are engaged in a trade or business (ETOB) in the US if you meet these criteria:

  1. you have at least one “dependent agent” in the US, which are employees or companies that work for you almost exclusively, and
  2. this dependent agent does something substantial to further your business in the US, as opposed to something purely administrative, or
  3. you are engaged in “considerable, continuous, and regular” business in the US
In general, not taxable are:
  • Personal or professional services performed from abroad
  • Selling digital products
  • Web design etc.
  • Selling physical products if the shipping point is from outside of the US.

Any business transacted from within the US would be taxable. This potentially includes shipping from Amazon. Personal services performed from within the US are taxable as well.