I will try to address all your questions one-by-one...
[WE ARE ONLY CONCERNED WITH STATUTES APPLICABLE IN DELAWARE UNLESS SOME STATE OFFERS BETTER TERMS. WHAT'S THE REQUIREMENT IN DELAWARE RE FORMATION OF A CORPORATION FOR A NON US RESIDENT, AND WHAT'S THE REQUIREMENT IN TERMS OF MINIMUM NUMBER OF MEMBERS.]
I Delaware - you may register either LLC or corporation.
Please see here a list of entity types available in this state
For the LLC - see here
There is no limit for the number of members - Delaware allows a single member LLC.
[IF WE ARE CLASSIFIED AS CORPORATION, WILL WE BE REQUIRED TO DEDUCT APPLICABLE TAXES FROM THE SALARIES OF EMPLOYEES HIRED IN USA AND BECOME LIABLE TO PAY SALES TAX DESPITE THE FACT THAT ALL THE SERVICES ARE RENDERED OUTSIDE USA?]
There are two options - you may register a corporation OR you may register the LLC and select it to be taxed as a corporation.
From tax prospective - there woudl not be any difference.
When the corporation (or any other entity) hires employees in the US - it will be required to withhold federal
and state employment taxes from wages - and some employment taxes are paid by the corporation.
All employment taxes are remitted to the IRS and state taxing authorities
If the corporation hires employees abroad - in a foreign country - there is no US employment taxes - but there might be similar tax responsibility in that country.
[SO ONCE WE ELECT FOR RECLASSIFICATION AS A CORPORATION, WE DO NOT HAVE TO DISCLOSE THE ID AND LOCATION OF ULTIMATE BENEFICIAL OWNER. PLEASE CONFIRM].
If that is US corporation - it is under US jurisdiction and pays US corporate income tax. When dividends are paid out to shareholders - For tax purposes - that information is reported to the IRS.
That is regardless if shareholders are physical persons or entities and regardless if they are US persons or aliens
If that is a multi-state business venture - you might want to register in "business friendly" state - most popular states are - Wyoming, Nevada or Delaware.
See some comparison here
Delaware also has corporate income tax, personal income
tax, a state franchise tax
, reporting requirements, and regulations compelling disclosure of substantial amounts of information resulting in far less privacy for you.
[WHAT'S THE APPLICABLE TAX RATE ON A CORPORATION'S INCOME AND ON THE DISTRIBUTION OF DIVIDEND?].
US corporations with foreign ownership ares taxed the same as all US domestic corporations at graduated tax rates between 15% and 35%.
Specifically for tax rate schedule - see instructions
page 17 - middle column - as we see - net income
up to $50k is taxes at 15% on the federal level.
Distributions from US corporations to foreign shareholders are generally subject to mandatory withholding
at 30%. However depending on the country of residence - a reduced treaty rate may apply.
[AS ALSO MENTIONED IN OUR INITIAL QUERY, THE US BASED COMPANY WILL ONLY ACT AS A SALES AND PAYMENT PROCESSING COMPANY, AND, IT WILL GET SAY 5% COMMISSION ON ALL SALES / PAYMENT PROCESSING MADE THROUGH THAT COMPANY. DO YOU SEE ANY ISSUE WITH THAT ARRANGEMENT. ARE THERE ANY TRANSFER PRICING OR OTHER LEGAL REQUIREMENTS THAT PRESCRIBE A MINIMUM RATE OF COMMISSION ON SALES]
Commissions are not limited by the law - and based on agreement between parties.
We need to be clear - when the US company ONLY provide some services to foreign individuals
or foreign entities - that means - these individuals and entities are conducting business activities in the US and as such - are subject of US tax and other regulations.
In additional - the IRS issued regulations that require companies that process payments on behalf of other businesses, to submit an annual report on Form 1099K, Merchant Card and Third-Party Payments.
The exception is for DeMinimis Payments if
•the total payment transactions
for the year does not exceed $20,000, and
•the total number of transactions does not exceed 200.
In this case - no information report is required.
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I am here to help you will all tax related issues.