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Infolawyer, Attorney
Category: Business Law
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Experience:  Experienced lawyer
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USA citizen living/working in Qatar but interested to start

Customer Question

USA citizen living/working in Qatar but interested to start LLC in North America..back home with wife (CAN citizen - non-resident). TAX GUIDANCE.
I finally realise that I have wasted countless hours trying to decide on the best answer on my own, but yesterday, I read a great blog post to maximise my potential I should stick to what I do best and outsource the rest. So I am eager to find the outcome of this paid, here it goes.
Me: usa citizen, non-resident for tax purposes: I have been living overseas now for 3+ years; first Australia for PhD, now in Qatar.
Wife: canadian citizen, non-resident for tax purposes: She has been living/working overseas for 5 years.
We both paid taxes appropriately in Australian and she New Zealand while receiving income.
We arrived in Qatar march 2010.
My query: I am interested to start an online business in my health field - my main concerns are to (1) minimise tax liability (2) maintain business name and appearance and in particular a business account for receipt of funds; I want to ensure that billings are made to/from my new LLC and not personal account/dba.

Previously, we operated this business as a personal endeavor to make money while studying. In this case, we received money into our own AUS account and reported appropriately. However, now, we will re-organise and continue to run the company whilst living overseas. Our only "local" operations will be during meetings or industry conferences when we meet with potential clients when in North America, Europe, or Australia. That is to say, we will not need to maintain a physical presence and will work from Qatar. We will likely receive most income from US, then EU, then, AU. The income should be less than 100k in first year.

Given that my wife is a non-resident of Canada she is not responsible for paying taxes on her worldwide income - whereas I am since I am American - so we should perhaps have an incentive here that I would like to exploit. I therefore provide personal knowledge and creative support and discuss services during meetings (above), and she would facilitate most operations.

Here are my main questions, keeping in mind the main goal is to maximise personal protection, minimise tax liability, and facilitate ease for US, EU, and AUS clients to purchase.

1. Should we start LLC in America with wife as sole proprietor? Can she start an LLC on her own without a US citizen co-owner - if so which is the best state to do so? It would be easy for us to be personally near Texas, Washington, Idaho, New Mexico). It seems that if we do start sole proprietor LLC, that since she is not resident in USA nor do we maintain a brick and mortar co. there should be no tax liability on her income (as she is canadian non-resident living in qatar? The primary purpose to establish LLC in USA is to open a US business bank account in the chosen name. Then we will open other offshore deposit accounts to receive payments. Plus we project possible acquisition in the longer term and see USA as a market in which this would be more easily achievable. I realise, though that if and when we return to canada she will have to pay tax on this income (i.e., self-employed); as would I?

2. IF we have to start LLC in both of our names - so long as my income is lower than foreign earned income threshold I should not have to pay - otherwise can I use self-employment tax on my income then I should not have to pay tax. Further, should we file married - then we would have double to limit.

3. IN the case of the above, however, we would both pay self-employment tax rates?

4. Finally, if we chose to establish FZ LLC in UAE - with wife as sole proprietor then the same should be true as number 1 - no tax liability? The only difference is that we pay more to establish the LLC and are subject to local economic turns. However it seems to me that when we return to USA or Canada to live that we will no longer pass requirement to claim foreign income credit so this money to start llc in uae is pointless if we plan to return to usa in 2 years?

So basically, given my circumstances with US citizen, non-resident + CAN citizen, non-resident I am asking for guidance to decide in which federal system should we start the LLC to minimise current tax liabilities that are foreseeable for the next 2-5 years whilst living overseas.   Should we start LLC with CAN person only or both? In which state are we able to start LLC with this foreign national (i.e., Texas, Washington, Idaho, other). Once we open the LLC we can then open the business accounts, correct? Can the foreign national if sole proprietor do so - or then now do we need US national? Finally, once the LLC is started can we trademark the business name?

Kind regards, XXXXX XXXXX truly look forward to assistance with this matter.
Submitted: 6 years ago.
Category: Business Law
Expert:  Fran-mod replied 6 years ago.

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Customer: replied 6 years ago.


********please do not answer this question as it will be automatically deemed unsatisifactory since i am canceling the question and have made it more brief********
Expert:  Fran-mod replied 6 years ago.

I'll close this now. Don't reply as that will reopen it.