Business

Why USA is a tax paradise for Indian Businessmen?

Delaware is a small state in the northeastern United States that became the first state in the United States (annexed on December 7, 1787). It has only 800,000 inhabitants and the capital is Dover. Incorporate company in Delaware is largely known for its liberal commercial law. At present, more than 250,000 companies are registered here, of which more than half are American listed companies. Of all the companies that changed their headquarters after 1965, 80% visited Delaware.

Legal environment

The most commonly used legal form in the United States is the American Limited Liability Company (LLC), which combines elements of a capital and personal company. In practice, this means that the partners are not liable for the company’s liabilities with all their assets and LLC income is not taxed at the company level, but only at the level of individual partners.

Tax conditions

In order for a company to achieve tax benefits, it must meet several conditions. If a U.S. company is owned by a non-resident alien (an individual who is not a U.S. citizen and does not reside there), does not do business in the U.S. and all of its income and expenses come from foreign sources, then it does not have to pay federal taxes or the obligation to file tax returns with the IRS.

Prestigious image

In addition to the tax benefits that the LLC offers, it is also very popular for its prestigious American company character, especially if the company comes into contact with end customers or business partners. In addition, it allows a high degree of flexibility in the management and organization of the company. Furthermore, its simple and quick establishment is positively evaluated, where clients can be the new owners of the newly established American company within 48 hours.

Legal form of a tax – advantaged company

In the United States, tax-advantaged companies are called Limited Liability Company (LLC for short). The company has the form of a personal company, with the partners not being liable for the company’s liabilities. Like personal companies in India, LLC transfers the taxation of its foreign income directly to the company’s partners. It is thus necessary to use a combination of an American LLC together with another offshore company, whose income from foreign sources will be exempt from tax. It is the company’s responsibility to maintain its registered office in the selected state of the USA and to have its registration agent there. The Company may not have income or expenses from sources or in the United States. US legislation is extremely complicated, so every business case and intention to establish a company needs to be consulted in detail in advance.

The process of establishment

The company’s charter is submitted to the public register of companies. The company with the help of Virtual CFO India can be established within 2 – 5 weeks depending on the selected US state. It is also necessary to take into account the delay in delivering documents to the client’s address, however, courier services in the US are at a relatively high level and so the documents are at the destination usually within 3-4 days after the establishment of the company.

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