USA

Basic information

Type of offshore companyLLC
Amount of share capitalis not specified, may not be repaid
possibility nominee serviceyes
Business Registerpublic, shareholders and directors are not listed
Bearer Sharesno
Tax identification numberon request
Obligation to keep accountsonly in the case of business in the US
Tax obligationsonly in the case of business in the US
Difficulty in administration and administrationminimal
Time of establishmentwithin 48 hours

Attention – changes in company formation from 1.1.2024 that you should know about

The United States has always been the centre of world trade and a mecca for small and large businesses, but more recently the US is also becoming a very popular destination for offshore companies. This may be news to many, but the US is increasingly ranked by financial advisors and tax experts as one of the best jurisdictions for offshore business ever. Many are now even referring to it as the new Switzerland.

USA as a tax haven

Types of companies in the US

EINs and other tax identification numbers

Taxation in the US

Online access to US company registers

International contracts

Delaware

Wyoming

Company formation in the USA

The US as a tax haven / offshore jurisdiction

Setting up an offshore company in the US is the best option for those interested in gaining the prestigious US company brand, low administrative costs and the ability to operate in a business-friendly legal environment. Choosing a suitable country can also achieve full anonymity of ownership structures, a high level of asset protection and favourable tax conditions. Thanks to the aforementioned, the United States of America can be confidently described as a tax haven.

The United States has a very strict tax policy towards its nationals.  In 2010, the United States implemented the Foreign Account Tax Compliance Act (FATCA), which requires US citizens and US citizen-owned businesses around the world to regularly report their income to the US federal Internal Revenue Service.

Almost the opposite approach, however, is taken with respect to so-called nonresidents (foreign nationals) and companies owned by foreign nationals. The US authorities are very welcoming to foreigners who are willing to invest and set up companies on US soil. For example, the U.S. has refused to join the Common Reporting Standard (CRS) agreement, which is intended to allow for the automatic exchange of information between tax authorities internationally, sponsored by the OECD. In addition, most U.S. states have very carefully crafted laws regarding the protection of property and the privacy of owners. This means, in short, that the US requires information on the taxes and property of US citizens from all over the world, but refuses to share information with foreign authorities about facts taking place on US territory.

U.S. States

The United States of America (USA) is a presidential-type federal republic. The United States of America consists of a total of 50 states, one federal district, the District of Columbia, which is not an official state, and island territories.

Despite the common federal laws that apply throughout the United States, the individual states vary widely in their approaches, have their own legal systems and different rules for establishing a corporation.  And while each jurisdiction or state offers its own advantages and challenges in offshore business, here we present the five most popular offshore destinations in the US:

  • Delaware
  • Wyoming
  • Nevada
  • Oregon
  • South Dakota

Types of companies in the USA

The types of companies in the USA are slightly different from what we are used to in the Czech Republic, and consequently in Central Europe. Therefore, below we will present the basic types of US companies that are most often established in the USA.

Limited Liability Company (LLC)

For offshore business, the most important and versatile company that can be formed in the USA.

An LLC is a flexible form of business that combines elements of partnership and corporate structures. It is a legal form of company that provides its holders with:

  • Limited liability, so, as with a Czech LLC, the partners are liable for the company’s obligations only to the extent of their contributions,
  • low set-up costs,
  • simple administration of the company,
  • no obligation to keep accounts and submit them for audit,
  • in many countries the shareholders are not listed in the commercial register, which allows for their full anonymity,
  • there are no citizenship requirements for forming an LLC in the US, so regardless of your country of residence or citizenship, you can incorporate in any state.

A distinguishing characteristic from other business corporations is the form of taxation of the LLC. LLCs are typically not a separate tax entity like a Czech s.r.o., English ltd or US corporation (see below). All profits and losses of an LLC are “passed through” from the LLC to its members (called members), who declare such income or losses on their personal tax returns (in the USA, an LLC is therefore referred to as a pass-through entity).

C Corporation

A C Corporation refers to any corporation that is taxed separately from its owners under U.S. federal income tax law and thus constitutes a separate taxable entity. A C Corporation is parallel to a Czech stock corporation, does not have a limited number of shareholders, pays dividends, and is subject to double taxation in the same manner as a business corporation in the Czech Republic.

S Corporation 

An S Corporation is essentially a subgroup of a C Corporation designed for smaller companies that provides shareholders with certain tax and corporate administration benefits. In order to become an S Corporation and receive these benefits, a company must meet the following rules: it cannot have more than 100 shareholders, it can only have one class of stock, and the shareholder cannot be a non-resident of the United States. The last condition makes an S Corporation not very attractive for offshore business.

Non-Profit Corporation

A nonprofit organization is an organization that uses surplus to achieve its objectives instead of distributing it as profits or dividends. Although non-profit organizations are allowed to generate surplus income, the organization must retain it for self-preservation, expansion or plans.

EINs and other tax identification numbers

The U.S. federal Internal Revenue Service (IRS) works with several types of identification numbers, specifically the following three: Social Security Number (SSN), Individual Taxpayer Identification Numbers (ITIN), and Employer Identification Number (EIN).

Social Security Number (SSN)

The SSN is a tax identification number for individuals. The SSN is a nine-digit number (xxx-xx-xxxx) and belongs to U.S. citizens and residents with proper authorization. It is not as important for offshore business.

Individual Taxpayer Identification Numbers (ITIN)

Again, an ITIN is a tax identification number for individuals, but it is intended solely for those who are not eligible to obtain an SSN (i.e., most non-residents and non-citizens) but are still required to file tax returns or other documents with U.S. authorities.

Employer Identification Number (EIN)

The EIN is a tax identification number for corporations, the most important number for offshore businesses.  Any company that pays employees or is required to file tax returns must obtain an EIN. An EIN is often a requirement for opening a bank account or an account on trading and other trading platforms.

Taxation in the USA

There are three basic levels of taxation in the US.

  • Federal – The basic types of taxes at the federal level are divided into income taxes, capital gains taxes, and so-called “capital gains” taxes. Sales taxes.
    • Income taxes are divided into corporate taxes and personal income taxes. The corporate tax is currently set at 21%. Personal income tax is then 0-35% depending on the amount of income.
    • Capital gains taxes are 0%, 15% or 20% depending on the income and type of capital gains.
    • Sales Taxes are taxes imposed on the sale or rental of goods and services in the United States. One of the sub-taxes is the VAT or sales tax. Sales Taxes are not currently regulated at the federal level, only at the state level.
  • State – Individual states vary widely in the amount and type of state taxes. While some states, such as California, burden their tax residents’ income with up to an extra 12%, some states have very liberal tax policies.
  • Local – Local taxes take many forms, from property taxes and payroll taxes to sales taxes and license fees. They can vary widely from one jurisdiction to another.

However, it is essential for an offshore business that if the company does not have income and expenses from sources in or within the U.S. (in other words, they are not “engaged in a trade or business in the United States – ETBAS.”), that income is not subject to U.S. federal tax.

If the taxpayer is then a resident of a country with a territorial tax system, the resulting tax can be reduced to the full minimum. It should be noted that even then, companies will be required to file the relevant tax returns and comply with the requirements applied by the US tax authorities.

US business registers

The commercial registers of US companies are maintained online, similar to the Czech Republic. It is therefore possible to find basic information about individual US corporations in the public domain, but the extent of this information (whether you can find out the owner, the managing director or just basic information) varies according to the specific state of the US company’s registered office.

  • Wyoming
  • South Dakota
  • Delaware
  • Florida
  • Oregon

For a complete list of all courts of record in the US, go to the following link.

international contracts

International Conventions Against Money Laundering and the Financing of Terrorismyes
Agreement on the avoidance of double taxation with the Czech Republicyes
Agreement on the exchange of tax information with the Czech Republicyes
Multilateral Convention of the Council of Europe on Mutual Administrative Assistance in Tax Mattersno
White paper OECDno

Delaware

Delaware is one of the smaller states in the northeastern United States located in the northeastern part of the Delmarva Peninsula, with Dover as its capital.

Delaware is one of the most popular US states for tax optimization for both non-US residents and residents. As evidence of this, more than 60% of the 500 largest US companies are headquartered in Delaware.

Some of the leading advantages of incorporating in Delaware include:

  • Certain tax advantages
  • asset protection
  • no annual general meetings
  • highly stable government, stable fees and registered agent costs required under Delaware law
  • these companies can conduct most types of lawful business activities
  • no need for directors to be incorporated or domiciled in Delaware
  • the name of the corporation may be any name – we can check the availability of a name for the corporation at any time during the business day. If the name is not available, we will let you know and can suggest alternatives.
  • Delaware has a Court of Chancery that handles only corporation cases, and the judges are experts in corporate law. Court decisions are usually more consistent and predictable than decisions in other states. The General Corporation Law of Delaware has built a good reputation for the state and has helped Delaware become a popular place to form a corporation.
  • There are no minimum capital requirements
  • Included in the cost of incorporation:
  • Company registration
  • government registration fees
  • preparation and filing of all necessary documents
  • complete company kit

In the price of establishing the company:

  • company registration
  • government registration fees
  • preparation and submission of all necessary documents
  • complete company kit

Confidentiality

Delaware remains one of the leading offshore jurisdictions for incorporation without the requirement of a business license and its excellent approach to confidentiality and discretion.

Wyoming

Wyoming is a state in the western part of the country and its capital is Cheyenne. Although the state is the tenth largest in area, it is the least populous state in the entire United States. However, this is not true for the number of incorporated companies.

In order to attract investment and funds to the state budget, Wyoming has enacted some of the most favourable tax laws in the US ever. The state has no personal income tax, zero corporate taxes, and also zero value-added tax.

Some of the top benefits of forming a company in Wyoming include:

  • LLCs (limited liability companies) pay no state income tax, only a fixed fee in the hundreds of dollars.
  • Owners of Wyoming-registered LLCs are liable for the company’s obligations only to the extent of their contributions, thus gaining asset protection. So if your business gets into trouble, your personal assets are protected.
  • Because of privacy laws, you don’t have to provide the state with a list of members or managers as some other states require, and the business registry then does not show the ownership structure and is completely anonymous.
  • In Wyoming, there is no limit to the number of owners a business can have. Additionally, if you sell the company, you can transfer ownership.

Included in the cost of incorporation:

  • Company registration
  • government registration fees
  • preparation and filing of all necessary documents
  • complete company kit

Company formation in the USA

If you’re thinking about setting up a company in the USA and you’re not sure if you can do it on your own, don’t hesitate to contact us. We can help you set up your ideal corporate structure, explain the tax benefits of doing business through a US company and make sure your company meets all the legal requirements that US law requires.

Company formation (including apostille and registered office for 1 year) with us costs EUR 1,650 and in most cases takes place within 48 hours of binding confirmation of your order. The annual cost thereafter is €1,450. (For full details, visit the price list.)

Changes to the law effective from 1 January 2024

As of January 1, 2024, new changes to the Corporate Transparency Act & Beneficial Ownership Information Reporting are being made in the United States. The new regulations require the registering agent that forms and manages companies to submit beneficial owner information of newly formed entities to the United States federal government. 

Beginning January 1, 2024, each registered agent will be required to submit information about the entity and its beneficial owner (UBO) to the federal government within 90 days of the formation of a new U.S. entity as follows: 

  • legal name of the company
  • the address of the registered office
  • EIN (tax identification number – all entities must apply for an EIN)
  • the full name, date of birth and permanent residence of the UBO
  • valid passport number issued in the name of the ultimate owner of the company
  • a scan of the valid passport

How and where information will be stored

The information will be stored in an encrypted database administered by the United States government. Unlike other European registries, the public and other government agencies will not have direct access to this information. It will only be shared with authorized government agencies or through a court order in connection with a criminal case brought by the United States federal government. 

The amendment sets precise deadlines for the delivery of the required information and at the same time imposes the possibility of imposing heavy fines on both the registration agency and the newly established entity itself for non-compliance. 

Companies incorporated before 1 January 2024 are reportedly required to report the required information during 2025. Further information is not yet available. Currently, the U.S. government has “plans” but has not published any further detailed guidance.

Interested in more?

Complexity

Establishment of the company, its settlement, delivery of apostilled documentation, bookkeeping. All under one agency.

Support

Do you have a foreign company and don’t know if you have fulfilled all your legal obligations? We can help you to check and comply with all government requirements.

Management

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Fair price

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