Setting up a US company from the UK

[Cardinal]

As a non-domiciled tax resident in the UK, I plan to establish a US company to publish an app on Google Play and the App Store. I intend to open a Mercury bank account to receive revenue from Apple and Google. My ultimate goal is to apply for a UK innovator visa, but I need to set up a company outside of the UK to validate my business idea before submitting my visa application. (Actually, I could set up the company anywhere outside of the UK, but I think the US is a suitable country for my purposes. Would be happy to hear your thoughts on this as well.)

I have some questions regarding the setup of the US company:

1. From a taxation perspective, is it better to set up an LLC or a C-corp?
2. How will my company be taxed in this setup? Will I need to pay corporate tax in the UK or the US?
3. Which US state is better for incorporating the company?

 

[JohnLocke]

There are some threads below that you can read up on; your questions have been raised here many times before.

https://www.offshorecorptalk.com/threads/eu-citizen-registered-us-llc-how-to-get-bank-account.42434/https://www.offshorecorptalk.com/threads/c-corp-vs-llc-for-non-us-citizens.35124/
And you should check for alternatives to Mercury because they now require substance, and you need to do business with someone in the USA to keep your account. They changed the rules earlier this year, which means that not everyone can open an account with them unless they do business with Americans.

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[Marzio]

Cardinal said:
As a non-domiciled tax resident in the UK
Click to expand...

Are you aware that soon you'll be taxed as a non dom?

https://www.offshorecorptalk.com/th...sed-to-flee-uk-over-labour's-tax-plans.44745/

 

[Cardinal]

JohnLocke said:
There are some threads below that you can read up on; your questions have been raised here many times before.

https://www.offshorecorptalk.com/threads/eu-citizen-registered-us-llc-how-to-get-bank-account.42434/https://www.offshorecorptalk.com/threads/c-corp-vs-llc-for-non-us-citizens.35124/
And you should check for alternatives to Mercury because they now require substance, and you need to do business with someone in the USA to keep your account. They changed the rules earlier this year, which means that not everyone can open an account with them unless they do business with Americans.
Click to expand...

Thank you for the links and the info about Mercury. From the first thread you shared and some research I did, it seems that incorporating an LLC might be a better choice because of its taxation benefits and simplicity. However, I'm still not sure in which country the LLC will be taxed.
I understand that an LLC with non-US sourced income will be subject to zero tax in the US. Does selling (in my case, app subscription, for example) to US customers count as US-sourced income?
And how will HMRC view this LLC? Will it see the payments distributed by the LLC as income or dividends? Apparently, the US and UK view LLCs differently (transparent vs opaque), and I'm not sure how it will affect my taxation.

All of the transactions I'll receive will come from Google and Apple, which act as intermediaries to sell subscriptions to users and also collect sales tax from the users themselves. There is also a possibility that I'll use Admob (a subsidiary of Google) to display ads as well.

Marzio said:
Are you aware that soon you'll be taxed as a non dom?

https://www.offshorecorptalk.com/th...sed-to-flee-uk-over-labour's-tax-plans.44745/
Click to expand...

I haven't had the chance to utilize my non-domiciled status yet, and in this case, I think I won't be able to do so either if I become the director of the foreign company?! Or can I use the remittance basis on the dividends of the company while I'm still a director?

Last edited: May 13, 2024