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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 110506
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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Hello, I need to establish a legal entity maybe a LLC for

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I need to establish a legal entity maybe a LLC for importing goods into the US. Goods are coming from Spain so we want to avoid double taxation. Also how does it work when two of the business partners live abroad?
Thank you
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

An LLC can have US or even foreign members. If there are foreign members and money is earned by the US LLC, then the foreign members have to file a non-resident tax return and pay any share of their taxes due on the profits of the LLC.

The LLC is a flow through tax entity unless it selects to be taxed as a corporation. This means at the end of the year, the LLC files a tax return, but pays no taxes and instead issues a K-1 form (like a 1099) to each member and they claim their share of profits or losses on their personal taxes.

Whether or not you use a LLC or C-Corp also depends on how much money you plan on making in revenue. In the C-corp, the foreign members do not have to pay taxes in the US on any income or proceeds they receive from the corporation they would claim the proceeds as income in their own country and pay taxes there. The corporation pays taxes on the total income they make after all deductions and expenses.

Thus, once you determine the anticipated revenue, you can decide which way is best with your local attorney based on the entire structure of your business which the local attorney must review to make a final determination as to which entity is best for you.

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