US LLC vs UK LLP vs Canadian LP How are they different and which is right for you? [2020]
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- Опубликовано: 5 сен 2024
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Thanks, I switched to a US LLC while living in Portugal. It is not water tight but for now it is working.
Great video. Keep em coming
Thanks!
Np. Great point regarding LLCs being considered corporation in Canada. For our Canadian LP structure (real estate ) we have the GP Corp take title of the property (on behalf of the LP). It wasn’t until recently that I found out the property income could flow through the GP that has title and get taxed at the LP level (somewhat similar to an LLC in the US). Also we usually have the GP 0.01% owner. I always assumed if a Corp has title rent is automatically taxed at the passive income rate. Thoughts ?
@@JesseFragale yeah that's generally correct
Great work
Hey Michael, I'm a big fan of your content and fellow Canadian looking to get out of Canada. I have a question about setting up a BC LLP vs a US LLC: my wife and I are in British Columbia and want to start an online music school serving people mostly in the US and also maybe switzerland. We want to move in the future to a place like Bali(for the 5 year tax free nomad visa) Thailand, Malaysia or some other territorial tax country. We want to hire teachers mostly in Canada and Asia. Before we book a call with you could you give some brief thoughts on this here? Thanks!
Nice video!
So in the sample you gave about Portugal, if you have an LLC, the dividends of the LLC will not be taxable in Portugal right?
I guess, that also in Georgia (being a territorial tax country), you wouldn't pay taxes on the dividends of your us LLC correct?
Thanks a lot!
It's a little bit uncertain. At the moment we've seen that it's possible to get away treating these as dividends and not taxing. But there's no case law so there is some risk.
so bad audio :(
Trick question to fellow Canadian: As non-residents of Canada, can we open a US LLC and avoid double taxation issues? Currently resident of Thailand and still running business via C Corp, which comes from our past Canadian life. I would think yes, and income is passed through to Thailand where residency (and tax residency) of the owner is established. Correct or incorrect?
The flow through often doesn't occur so that's not usually the key issue. The bigger issue is to do with source income and remittance. So that gets into your individual company operations details.
You can almost certainly do much better than a US C-Corp.
Very good video. I really liked the phased approach and the way you explained about how the receiving country would interpret the incoming revenue as a Partnership or Dividends. I'm actually very interested in the Portuguese NHR case (as I am one). I've been hearing about the LLP partnerships in Canada now in 2022. Does it change anything related to your video on this ?
LLP is a bad idea for Portugal NHR if someone is giving you that advice in most cases it's probably sub optimal.
It's case by case though so need to go over the details of your situation to say for sure
@@OffshoreCitizen Lets talk then.
Great content, subscribed.
One question, for reward-crowdfunding, as Kickstarter and Indiegogo. The campaign is paid by them and both are from US.
Plus more than 50% customers also from US. So it is considered US income, and dont make sense to have US LLC In this case. Am I right?
Me and my partner both arent from US, nor residence.
About UK I have few doubt between LLP and Limited Company. Also about the tax: LLP will not pay Corporate Tax, but we pay Income Tax? Which looks the same. There is possibility to keep the money on the partnership to don’t pay tax, while we reinvest everything. Also both aren’t UK residents, neither citizenship.
I will get in touch with you to get a consultation, afterwards. Cheers.
The source of income is not usually based on where the customers are or the payee is unless you're talking about income from real property, royalties, interest or dividends. So a US LLC might work for you it's something we should definitely discuss to see.
For the UK LLP the flow through is only really beneficial when the owner is in a zero or low tax country otherwise you lose the benefit of corporate deferral, which is worse.
How about using a UK LLP while being a tax resident in Bulgaria?
So, let me see if I understand correctly. If I set up an LLC in the USA with just me as a partner, provide IT consultancy services all over the world EXCEPT for companies in the US and live in Portugal, would I have a zero tax structure?
A few errors in there.
Location of clients doesn't matter
Location of work does matter
You won't get taxed in the US if there's no effectively connected income with US trade or business that doesn't mean you won't be taxed in Portugal
@@OffshoreCitizen Ok. Só, how can I get zero tax having LLC in US and living in Portugal?
Great video. Question: I am in Argentina. I am a consultant. I have already opened a LLP UK company as a non-resident, can I run this company type with Transferwise without a problem. Or Should I open a US-LLC or Canada LP instead? Thanks for all
Totally depends on your situation, there's no one size fits all and matters what you're trying to achieve
Hey man do you know how can i open uk llp without having a business partner?
For an LLC or LLP, having customers locally is still an option? Without removing the advantage? Maybe just the VAT that should be considered?
Depends what you mean.
The problem with an LLP is income flows through to you locally where you live in most cases.
In an LLC this sometimes happens but it depends where you are resident.
Then you've always got to consider source income/permanent establishment rules.
Each case is different so you need to look at the specifics
If I lived in UK what is the best route for me?
Depends on all the details surrounding your specific situation and the goals you're trying to achieve. Best is to reach out
Nice, so if you have an LLC single member and you are UK resident do you need to pay tax for all the profits of the LLC in the UK or just tax on the dividens/salary you bring to the UK?
This is especially complicated in the case of UK as there have been several court cases on this and it depends on various facts. However as a general rule you'd need to pay tax on all of it with certain exceptions.
LLP is taxed on UK derived income. So setup two bank acconts/websites etc, to keep UK separate from everything else.
@@simonhill6267 yes and no. The question is what defines "UK source income"? People have the mistaken assumption that these things are based on the location of the customers but that's often not true
@@MichaelRosmer That is one factor, also where the business is managed from. If say for instance I ran a UK LLP from Malaysia, realistically HMRC could only realistically go after products/services sold into the UK.
@@simonhill6267 that's not really accurate. It doesn't work that way.
So, you've got to understand here first the difference between an Ltd and an LLP. The later is transparent for tax purposes so the management doesn't matter the same way as for an Ltd.
Second, you need to look at how source income is determined. Generally, an LLP does not change the tax obligations of the recipient compared to using no legal entity at all. Since foreign individuals or companies can sell into the UK without incurring UK tax the same is generally true here.
What you usually need to pay attention to (though it varies by type of income and a number of other nuances) is permanent establishments and residency of the partners.
Let's use an example. A UK resident operating via a UK LLP is still fully taxable on the full worldwide income, it doesn't matter whether it is income from abroad or separating bank accounts etc.
Likewise, a foreign entity operating via a UK LLP exclusively through a permanent establishment in UK (under the definitions of the tax treaty) is 100% taxable in UK regardless of where the customers are located. In other words, income derived from foreign clients even if the income is received abroad say in a foreign bank account is fully taxable in UK.
The opposite could also be true though where there's no UK tax. You need to really watch the residency of partners and source income rules.
Hey Michael, Is it generally more advantageous to start an LLC (say in Wyoming) for a company with partners based in the US and in London? If the income would be deposited first to a US account and then transferred to UK accounts, how would the tax structure look for both accounts?
Complex question, best to book a call for this. Could be that neither is the best option
What would happen if you are living is zero tax like UAE and own an LLC or LLP?
You'd only be taxable on local source income. See our videos on local source income/taxation basis
If you are resident to Panama and isn't taxed on your foreign incomes, does any of those 3 structures are ok?
It really depends. Every situation is different. If you need help, feel free to book a call calendly.com/michael-rosmer We'll discuss your case, and I'll be able to provide detailed advice about your specific situation
@@OffshoreCitizen Well it's no for now (2022 or 23), I'm just planning ahead and see my options before to make a move. Thanks anyway, I subscribed to your channel and contact you on due time…
How much the same this year 😂😂😂😅