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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Business Law
Satisfied Customers: 19027
Experience:  B.A.; M.B.A.; J.D.
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I have a business in Bangladesh that will be owned 99.9% by

Customer Question

I have a business in Bangladesh that will be owned 99.9% by an American Delaware C-Corp. All employees will be in Bangladesh, offices in Bangladesh, and customers will be a mixture of people in the US and abroad. My question is regarding taxes. If the business generates $1MM dollars, would it be tax based on the US tax laws or Bangladesh tax laws?
Submitted: 1 year ago.
Category: Business Law
Expert:  Phillips Esq. replied 1 year ago.
The United States of America, through Internal Revenue Service ("IRS") taxes its domestic corporation based on the corporation's total income. This would include the income the corporation generated outside the United States of America. However, IRS would give credit to the corporation on the foreign tax paid. However, the foreign tax credit cannot exceed the amount that IRS would have imposed on the domestic corporation. So, the corporation's income will be subject to both foreign and domestic taxation. Kindly give a positive rating to my response so that I can receive credit for responding to your post. There is no additional cost to you for doing this. Thank you for your cooperation.
Customer: replied 1 year ago.
But the company is technically a Bangladeshi company. We are just forming it in the US because of friendly investment terms and better legal structure. Would it make more sense to make the holding company in a country that has a 0% corporate tax rate?
Expert:  Phillips Esq. replied 1 year ago.
Yes. Kindly give a positive rating to my response so that I can receive credit for responding to your post. There is no additional cost to you for doing this. Thank you for your cooperation.

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