Can people use an LLC in Delaware to legally avoid tax in his home country? Say I am a citizen of Malaysia. I am thinking of either opening a corporation in Seychelles or Delaware LLC. As far as I know, both are tax free, cheap, and stuff. Delaware LLC is even cheaper. Delaware LLC, for tax purpose, is a tax "flow" entities. So if you're an american citizen, you will pay tax as if the income of the LLC is your income. But what about if you are a citizen in other country? From say, Malaysian's point of view, is delaware LLC any different than Seychelles corporation? Both are just foreign entities right? Must you pay tax for any income the delaware LLC have? Assuming you don't repatriate, etc. Note: LLC is a flow through entities. Basically if I were american citizen the tax will flow through as if I don't have LLC. However, given that I am not an american citizen the tax will flow through a foreign entity. From US/Delaware points of view, the tax flow through outside. From my country points of view, an LLC in delaware owns tax. So no body claims they can tax me. That's the idea.
First of all, if your Delaware LLC earns money, you will pay tax in America on that money. America still taxes "foreigners" on American income, just not on"global" income. That is, unless the U.S. has a tax reciprocity treaty with your home country, Malaysia. I don't know about Malaysian law, but I am writing as an American about American law regarding the Seychelles (and I am not a lawyer). The following is only as an "example." If you set up an LLC in the Seychelles, you could, in theory, avoid American tax by accruing income there. In practice, if you did nothing but "banking" in the Seychelles, America would look at your lack of "value added" there, and could tax you on Seychelles income as if your corporation was American. The way to make such a claim stick (typically in a place like Ireland), is to set up a manufacturing or operating facility (e.g. call center) there so that you were shipping goods or services from your offshore operation. Then you'd have a strong claim in America that your operation actually earned most of its income abroad, and the U.S. company was just a holding company.
Yes you can do this in the UK. Section 60 of the Patents Act 1977 has a specific carve-out for this kind of activity: (5) An act which, apart from this subsection, would constitute an infringement of a patent for an invention shall not do so if; (a) it is done privately and for purposes which are not commercial; (b) it is done for experimental purposes relating to the subject-matter of the invention; So if you build and operate your laser without selling anything you are in the clear. You can also experiment with potential improvements. There is no such thing as a &quot;global patent&quot;: patents are issued in each country and the national law of each country applies (except for Europe). If an inventor wants patent protection in lots of countries they have to file for a patent in each country. So if this laser is patented only in the USA and you are in the UK then you could make and sell as many lasers as you wanted, as long as you didn't export them to the USA. And vice-versa for a UK patent and a USA engineer.
Yes. You could use student loan proceeds for these purposes. Student loan proceeds are not tracked or traced. If you did so on a wholesale basis (taking out loans intending to cancel your courses before tuition it due to raise money for other purposes), you might be engaged in loan fraud, but since student loans cannot be discharged in bankruptcy, while other loans can be discharged in bankruptcy, that would be a very stupid, self-defeating kind of fraud (which isn't to say that I haven't encountered it once or twice). Some tax preferred accounts (e.g. for retirement) have contribution limits based upon your taxable earned income, however, so while you could use student loan funds to put into those accounts, there would be strict limits on your contributions due to your low income.
Yes Companies can own companies - that’s what subsidiaries are. On a practical level, you know this is true because you actually have an example. Companies House would not have allowed its registration (barring error) if it was illegal. Why can’t it open a bank account? Banks (or any other business) can choose who they will and won’t do business with. Unless it’s discrimination on the basis of a protected characteristic, it’s not illegal. Since juridical persons don’t have protected characteristics (apart from nationality) it’s virtually impossible to illegally discriminate against them.
I'm assuming it would NOT be a good idea to just accept the funding as a person (sole proprietorship). Correct. Would the time be right to form the LLC first, before starting the campaigns on the crowdfunding sites? Or would it be permissible for the entity to be formed IF and once the funding is available? For instance, if the campaign on Kickstarter raises 800 thousand dollars, can an LLC then be created, a bank account opened, and the funds deposited there? Or must the entity be created prior to the asking for startup funds? An entity should be (really must be) formed before funds are raised. This is not a hugely expensive thing to do. For a lawyer drafted one, you are talking on the order of $500-$2000, plus some state filing fees which are modest. I know it's kind of a chicken-and-egg situation, but there isn't a lot of funds available yet for hiring attorneys and drawing up papers before the money is raised. Or should this be something for just forming a very quick LLC and then worrying about the right entity after the funds come in? If you can't afford the money necessary to hire a lawyer to form an entity without crowdfunding, you aren't ready to open a manufacturing company. You really shouldn't consider trying to start a project of this magnitude unless you have at least several tens of thousands of dollars of personal funds on hand prior to the crowdfunding effort. You should also have a detailed business plan in place with fact checked budget lines and reality checked revenues estimates before stating your campaign. If you plan to have patents, you need to at least begin the process of applying to protect them legally, with pre-campaign funds too. Realistically, most people at your stage do a small round of friends and family and personal savings fundraising and often also find an angel investor or two, before going to the general public in a crowdfunding effort. If you can't convince those people that your project is worth investing in, you are probably not ready to run a manufacturing company which will require you to successfully make many similarly difficult pitches to a variety of people. What legal entity(s) would be best for startup funded by kickstarter or other investment? At the state law level a C-corporation and an S-corporation are the same. The distinction is made with a separate tax filing with the IRS in S-corporations. Crowd funding is a term that is often ambiguous and can be used in a multitude of contexts. If it is more than a gift (i.e. in exchange for stock or bonds) there are also securities regulations exceptions that the offering must be tailored to. If the funds are donations for a charitable project, a non-profit corporation would usually be the right choice and 501(c)(3) status needs to be obtained in advance. If funds are raised in exchange for equity interests or non-U.S. citizens/permanent residents own some of the interests, a C corporation would usually be the only permitted choice. If the funds are raised in exchange for interest paying loans/bonds, or the funds are non-tax deductible gifts rather than investments, then financing isn't a concern for choice of entity, and either an LLC or an S-corporation is usually preferred (or perhaps a limited liability limited partnership in lieu of an LLC which has a different control structure). If funds are raised for an operating business with assets that are leased or tend to depreciate in value and has less than 75 owners, and has owners who are also senior employees of the company, an S corporation will usually be the best choice. If funds are raised for a business that will hold assets expected to appreciate in value, or has a financing or control structure more complex than equal shares of common stock plus bonds, an LLC will usually be preferred. Assuming someone is going to start a business that is to design, build and manufacture a small electronic handheld device. A C-corporation or S-corporation rather than an LLC or LLLP is probably preferred for a venture like this one, with the tax classification dependent upon the means of financing and the nature of the owners. Usually, you would use an S-corporation if possible, and a C-corporation if not. A two entity structure, with an LLC owning the IP (if any, other than a trademark for the products), and then licensing it to an S-corporation operating company, would also often make sense in this scenario. I live in Texas, but I assume that the business entity would or could be formed in Nevada or Delaware or anywhere there are more favorable conditions. Not really. A Texas entity would be just fine in this context. A Delaware entity has higher registration fees and legal fees to prepare one, and the advantages it provides for big businesses will often be disadvantages in the kind of entity you are considering. The benefits of Nevada and Alaska trusts are much greater than the benefits of Nevada and Alaska corporations or LLCs. Also, the Texas entity may be more suited to addressing Texas community property issues.
Under German law, yes sure. As long as you keep to all regulations. You have to declare your taxes. This is income, whether it comes from inside Germany or not and whether it is paid into a German bank account or foreign. You have to have a health insurance and likely need to pay into the social security and pension funds. As your employer most likely does not do this for you as a German employer would be required to, you will need to pay both the employee and the employer's part yourself. So yes, if you pay your taxes on it and have health and social security insurance, Germany does not care where the money comes from. Now whether the company in Mauritius is legally allowed to hire and pay you under their law? I have no idea. Please note that filling out all the right forms correctly is not for the faint of heart. And finding out that you did it wrong only years later is painful and costly. Also calculate your costs before you do anything. Paying both parts for your health insurance for example can easily be up to 400€ a month more then a German employee at a German company, so run your numbers. You may be better off being officially self-employed or even incorporated. Just because it's legal, does not mean it's a good idea. Hire a professional to advise you on the economic and bureaucratic side of this.
When the buyer hears &quot;to avoid sales tax&quot; and hears the seller describing as a gift something that s/he knows was nothing of the sort, a reasonable buyer would know that this was at best suspicious, and would find out if this was legal. But assuming that the buyer accepted the seller's suggestion ignorantly and in good faith, the buyer can file a report of the transaction and pay any tax that should have been paid. The exact way of doing this will vary based on the laws of the buyer's jurisdiction (state-level if in the US) which is not given in the question. Such a report and payment might not prevent the local tax authorities from assessing an additional penalty. Criminal charges seem unlikely, but would be possible. If the seller was a used car dealer, the authorities might want the buyer to testify against the seller. They buyer might be wise to consult a lawyer with expertise in sales tax issues in the buyer's jurisdiction. Such a lawyer could advise on exactly what the buyer's legal obligation was, and how to avoid or minimize penalties or other consequences.
FDIC Regulation 500 prohibits discrimination in making loans on the basis of "National origin" but not on the basis of immigration status. This story from The Nation says that Bank of America is denying accounts to non-citizens, and arguing that it is legal because of increased risks, although there are current court challenges to this. Perez v. Wells Fargo Bank, N.A is a case now pending challenging loan denials based on immigration status. This has particularly come up in regard to DACA recipients, rather than people with LPR status. The US "public accommodation" laws probably do not apply, as a bank is not usually considered a place of public accommodation. Any specific state laws prohibiting discrimination on the basis of immigration status might apply. In short, this is an issue still not clearly settled. There seems to be no law or regulation requiring banks to ask for citizenship information, much less to deny accounts based on it, and it would be well to seek a bank with a different policy if possible. The above is very US-specific. Many countries do limit banking access based on citizenship, i understand. I am not a lawyer, and this is not legal advice. Before challenging any bank action, you may well wish to seek advice from a lawyer.