How to Incorporate an LLC Company in the USA While Avoiding Problems

With the beginning of a new year we are forced to review our commitments and formalities. trade abroad, One of the most used vehicles in the framework of technical businesses is the case of LLC Companies (Limited Liability Company) Of America.

Brief description of the path to outsourcing

The accelerated digitalization process of recent years has allowed remarkable growth cross border trade Of technology. global demand for services Software development, mobile technologies, online sales, trading, digital marketing and programming There has been rapid growth in recent years and its growth is expected to accelerate even further.

This trend, promoted by companies and government programs to promote computer equipment, has allowed it to be well received locally. Through continuous training of technical tools that skill professionals with the standards required worldwide. The technical knowledge is extensive and the method of acquiring it is relatively simple. And under that basis they proceed by the effect of contagion as if they were equal cases to each other. If the items are the same, everything works the same way!

Thus, a section of the society, basically young people, understand that Your business may move abroad with a dynamic and a fundamentally financial benefits, A place where, even though there are no special measures to promote their activities, there are no barriers that hinder the growth of their businesses, and this leads to extremely rapid growth.

Selected destination: United States

establishment foreign corporate vehicle It is presented as an alternative to developing activity abroad. Current and multiple offers that are presented in digital media offers create a community quickly In case it is used to bill for services abroad. It is one of the most used and promoted corporate vehicles US LLC Companies, Apart from the tax benefits they offer, they also have other aspects that make them most chosen by people. Subjects living outside the United StatesAnd those who resolve to expand their business in that jurisdiction.

In theory, they are Companies that are incorporated with some ease, where its executive body may be composed of non-US subjects as well as all of its partners. Another important thing is Opening bank accounts is relatively simple, they can also be excused from Income tax, As long as there is no physical presence in the country, they offer a simplified receipt issuance system, and above all, they are very agile when it comes to administration.

Is Argentina foreign for my businesses?

Argentina’s tax regulations have expanded to include changes since the 2018 tax reform. international tax transparency regime,

In this Art. Section 130 of Income Tax Act This system has been developed with respect to the moment of imputation of profits and expenditure from foreign sources. Subsection E) deals exclusively with profits derived by residents of the country Partnerships in companies or other entities abroadand establishes that they shall be charged for the financial year or financial years in which the annual financial year of such companies ends in proportion to their participation.

However, the most interesting thing about the article is found in the second paragraph where it indicates that the said allegation matches When the vehicle does not have tax personality, Concept that is included in the Regulatory Decree of Income Tax Law. Article 288 of the above criteria defines that a company or other entity of any kind resident abroad does not have tax personality when it is not subject to and obliged to pay tax by the tax law corresponding to income tax in the jurisdiction in which it is located. It is believed. ,

The goal of this regulatory incorporation is directly to llcWhich has the characteristics of a capital company, but also has some of the characteristics of a personality company.

For example, in the United States they generally “transparent“. At the federal tax level, an LLC can choose to be taxed as a Unitto be treated as Partnerships or in the case of a sole partner, it shall be deemed disregarded entity, In the last two cases, is not subject to taxes on the income generated, since they are taxed as LLC partners. Therefore, Argentine residents who hold shares in companies without tax personality, as is the case, must allocate their income and expenses in proportion to their share in the tax period that follows the closure of the company or entity abroad. Corresponds. Distribution of such profits to its partners.

Obligations of an LLC in the United States

The method of incorporating this type of company is very simple and its administration and operation is also very simple. this may cause breach of obligations These entities are required to make both registration commitments and submissions to the IRS with respect to state fees and agents, in their registration jurisdiction (Internal Revenue Services) In form of Tax Returns Annual.

In most cases, it is United States professionals who submit the relevant forms on time, or request an extension of the deadline with the IRS. Conversely, it also happens that owners are completely unaware of the obligations that come with being accountable to the IRS for a company registered in the United States. This action leads to a sum of fines Which, when they mention non-compliance by foreign investors, becomes extremely tough.

In addition to the formal fine for failure to appear in the terms of federal tax returnare related to International Information Statement,

Within the latter, one of the most severe penalties, which is worth mentioning and which has attracted more attention among those responsible for companies in the United States since its last regulatory amendment, was published on December 13, 2016 Where the IRS added new obligations is Code of Federal Regulations section 1.6038a-1. These new changes took effect on January 1, 2017, and will now also affect all foreign-owned single-member LLCs. This section deals with Obligation to submit significant amount of information annually With respect to foreign-owned entities, when owned by a non-US person/entity equal to or greater than 25% Of their votes.

As far as approvals are concerned, the entity will be responsible for Penalty of US$25,000 for each year of non-compliance Failure to furnish information within the prescribed period, or to keep records up to date.

Meanwhile, as indicated in paragraph 2 of point D of Section 6083 of the Code, if any non-compliance continues for more than 90 days after notification, a penalty will also be imposed. US$25,000 for each 30-day period During which non-compliance continues even after the expiry of the 90 day period.

As a final reflection on this brief description of the main characteristics and responsibilities of LLC companies, not everything ends in simple online creation. We must take into account both sides of the coin, both profit allocation foreign sources from a local perspective, as well as its Annual liability and significant penalties Before the US Treasury.

Furthermore, it is necessary to be aware of Current Automated Financial Information Exchange Agreement Signed between the two countries, and their possible consequences for Argentine residents.

Consider also the great responsibility that entails being a representative before the IRS of the corporate vehicle, compliance with formal obligations of annual taxes or international informative declarations and compliance with FinCEN’s ultimate beneficiaries regime until January 1, 2024. ,

The implementation of any foreign entity should not be based solely on ease of incorporation, administration or commercial image, but based on extensive knowledge of international affairs and the accounting, legal and tax consequences that may arise from its choice.