I have a tax question. I am setting up a new company 1876…

I want to provide a full answer, before I go there with payroll, are you already aware of foreign corporate ownership rules?

And, just to make sure I answer payroll correctly, will the parent own all the subsidiaries?

A lot of the administrative burden is going to be how you have these LLC reporting to the IRS for tax purposes (partnership, corporation, subchapter-s corporaiton). But some entities are a little easier to handle with tax reportin. For instance, of they are all partnerships, when one LLC owns 100% of another LLC, if you choose, you can elect to have the subsidiaries be "disregarded entities". which mean they all roll up to the parent for IRS reporting.

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Now, the issue you have with payroll is that if you place the California employees in the Wyoming company, they Wyoming company has to register in California and obtain all of its own tax identification numbers, insurance, and file a company tax return with the California Franchise Tax Board (regardless of the tax reporting type).

As for the foreign corporation. There is a 50% rule governing a Foreign Personal Holding Company (FPHC) which could make matters complex. The same 50% applies to what the IRS calls a Controlled Foreign Corporation (CFC). In both cases, yes, this triggers a number of reporting requirements to make sure you as a resident (or citizen) is not shifting money outside of the US for purposes of tax evasion.

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If you own more than 50%, you could potentially owe personal income tax based on the nature of the CFC or FPHC. The tax on a foreign owned corporation starts at 20%.