Hi amigos.
I live in central america and do marketing remotely for US companies. I currently have a US LLC and bank. I have no plans of moving back to the US, but may move around to other countries. I should qualify for the foreign earned income exclusion.
I am learning (from a former IRS agent) that it is advisable that I set up an offshore corporation and bank account in a 'tax-friendly country' that I can then have my clients pay directly. I am told I then should have this offshore company pay me and my wife a salary. This framework would then allegedly exempt me from self-employment taxes (~15%). Thus, the foreign earned income exclusion + no self-employment would mean zero taxes on my first ~200k of income (married filing jointly).
So, a few questions:
1. Is this framework common? Problematic? Misinformed?
2. Any suggestions on the best country for this type of situation?
3. Is it best to set up a bank account IN the US for the foreign corporation (difficult?), OR to have the clients pay to a foreign bank account (suspicious? not allowed by some companies? problematic?)
I probably have a few more questions...but would love to get some thoughts from any experienced international business folks! Thanks!
I live in central america and do marketing remotely for US companies. I currently have a US LLC and bank. I have no plans of moving back to the US, but may move around to other countries. I should qualify for the foreign earned income exclusion.
I am learning (from a former IRS agent) that it is advisable that I set up an offshore corporation and bank account in a 'tax-friendly country' that I can then have my clients pay directly. I am told I then should have this offshore company pay me and my wife a salary. This framework would then allegedly exempt me from self-employment taxes (~15%). Thus, the foreign earned income exclusion + no self-employment would mean zero taxes on my first ~200k of income (married filing jointly).
So, a few questions:
1. Is this framework common? Problematic? Misinformed?
2. Any suggestions on the best country for this type of situation?
3. Is it best to set up a bank account IN the US for the foreign corporation (difficult?), OR to have the clients pay to a foreign bank account (suspicious? not allowed by some companies? problematic?)
I probably have a few more questions...but would love to get some thoughts from any experienced international business folks! Thanks!