US LLC + Italian citizenship

[Zio Silvio]

Hey guys,

I'll quickly explain my situation and hope to get an answe to this burning doubt I have:

- I am based in Italy.
- I am a freelancer, but work only with non-Italian companies.
- I obviously don't want to pay taxes.
- I can't get tax residency elsewhere because of family reasons.
- I am willing to take a small risk

My question is:

If I open an US LLC from Italy, with a US bank account. And never:
- Transfer money to myself or one of my EU bank accounts.
- Never declare the US LLC to the Italian governement.
- Do not invoice Italian companies.

Will the Italian governemtn automatically know about the US LLC?

I know that under FACTA only bank data is exchanged, but it doesn't affects LLC.

Is it correct?

I know it's not the cleanest solution, but because of family reaosns, I can't move my citizenship elsewhere.

 

[JohnnyDoe]

Big risk. If you don't want to move your a*s out of Italy, be prepared to pay the price for your laziness.

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@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields​

 

[bibing]

Italy has an agreement with US since 2014.

They do exchange info to each other.

 

[Zio Silvio]

bibing said:
Italy has an agreement with US since 2014.

They do exchange info to each other.
Click to expand...

Would you please share the agreement? Is it FATCA?

 

[Zio Silvio]

JohnnyDoe said:
Big risk. If you don't want to move your a*s out of Italy, be prepared to pay the price for your laziness.
Click to expand...

@JohnnyDoe nice photo
Can you expand more your answer? Is the information exchanged automaitcally?

 

[bibing]

FATCA

 

[daniels27]

Yes, this one
https://www.irs.gov/pub/irs-lbi/italy_competent_authority_arrangement.pdf

Edit: Both US and Italian financial institutions report informations. @bibing, somehow I read that they do "not" report information. Which is incorrect.

Last edited: Jan 31, 2025

 

[bibing]

daniels27 said:
Seems indeed purely unilateral.
Click to expand...

It's not. It's reciprocal.
In particular, the IGA is a reciprocal agreement, meaning that Italy and the US will automatically exchange annually, on a mutual basis, specific account holder information that financial institutions in each country will report to their own competent authority as required under local law.

 

[Zio Silvio]

bibing said:
It's not. It's reciprocal.
In particular, the IGA is a reciprocal agreement, meaning that Italy and the US will automatically exchange annually, on a mutual basis, specific account holder information that financial institutions in each country will report to their own competent authority as required under local law.
Click to expand...

Yeah, but the financial account is owned by the LLC, not myself.

Is it wrong?

 

[daniels27]

bibing said:
It's not. It's reciprocal.
In particular, the IGA is a reciprocal agreement, meaning that Italy and the US will automatically exchange annually, on a mutual basis, specific account holder information that financial institutions in each country will report to their own competent authority as required under local law.
Click to expand...

Sorry. I just woke up and misread your post. Yes, they share information in both directions.

Zio Silvio said:
Yeah, but the financial account is owned by the LLC, not myself.

Is it wrong?
Click to expand...

US banks collect details about all authorised users and about UBOs. They will report you.

 

[daniels27]

Zio Silvio said:
I know it's not the cleanest solution, but because of family reaosns, I can't move my citizenship elsewhere.
Click to expand...

You do not need to move the citizenship, you need to move you.

You either need to stop working (or at least not own anything on paper and also not be the director of the company) or you need to leave Italy. All other ways are going to fail sooner or later.

 

[bibing]

Zio Silvio said:
Yeah, but the financial account is owned by the LLC, not myself.

Is it wrong?
Click to expand...

Yes you are wrong. Because they don't care. What's important is who is the UBO. That will be you and you will be reported. There's no going around that

 

[JohnnyDoe]

Zio Silvio said:
@JohnnyDoe nice photo
Can you expand more your answer? Is the information exchanged automaitcally?
Click to expand...

There are so many ways you can get into serious trouble with this strategy, in addition to exchange of information. Not worth trying your luck.

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[marioIT]

you could do that 15 years ago.... but those times are gone.
these days you are playing with fire.

And since italian tax agency sees the LLC as opaque structure, they'll charge you with all the taxes and social security as if it were a local corporation...
and the issue is that if you do decent numbers, you're pretty much always above the criminal threshold too...

they don't care if the USA see it as disregarded entity.
You could get away with it if you have a partner in the US, and office etc... a real partnership.
But if you're alone you pretty much shooting yourself in the foot and cannot really defend.

man up and relocate if you're serious about your business... you've got malta, switzerland, or even any cheap eastern europe country under 2hr flight depending on where you are in italy...
if you really want to stay in italy these days... just get a well paying job, even a remote one, and enjoy sun and pizza.
for bootstrapping a business you better leave while you can...

 

[JustAnotherNomad]

Since OP already wants to break the law, there are probably (illegal) ways to do this if he can use someone else's name.

 

[daniels27]

JustAnotherNomad said:
Since OP already wants to break the law, there are probably (illegal) ways to do this if he can use someone else's name.
Click to expand...

Yes, he uses a nominee director and nominee shareholder as I proposed.

 

[ilke]

JustAnotherNomad said:
Since OP already wants to break the law, there are probably (illegal) ways to do this if he can use someone else's name.
Click to expand...

Yes, I say the same.

To set up a nominee structure with the LLC does not seem particularly complex.

And as long as he does not appear too suspicious, it is not very likely to be discovered, especially when OP is not planning to make any distributions from the LLC.

But this is not a legal option, just a less-likely-to-be-caught option.

 

[Konstanz]

Zio Silvio said:
Hey guys,

I'll quickly explain my situation and hope to get an answe to this burning doubt I have:

- I am based in Italy.
- I am a freelancer, but work only with non-Italian companies.
- I obviously don't want to pay taxes.
- I can't get tax residency elsewhere because of family reasons.
- I am willing to take a small risk

My question is:

If I open an US LLC from Italy, with a US bank account. And never:
- Transfer money to myself or one of my EU bank accounts.
- Never declare the US LLC to the Italian governement.
- Do not invoice Italian companies.

Will the Italian governemtn automatically know about the US LLC?

I know that under FACTA only bank data is exchanged, but it doesn't affects LLC.

Is it correct?

I know it's not the cleanest solution, but because of family reaosns, I can't move my citizenship elsewhere.
Click to expand...

You will get in trouble. Italian government will find out about your company sooner or later and you will get in big problems

 

[cherry]

ilke said:
Yes, I say the same.

To set up a nominee structure with the LLC does not seem particularly complex.

And as long as he does not appear too suspicious, it is not very likely to be discovered, especially when OP is not planning to make any distributions from the LLC.

But this is not a legal option, just a less-likely-to-be-caught option.
Click to expand...

Not that I would suggest ever breaking the laws of our overlords, but there is a probabilities equation here:

1. Unlikely to be discovered using nominee framework but if you are, it's bad news for you.
2. Let them know you are the BOI, and with a stroke of a pen they can change their rules and rob you with ease.

Which would OP prefer?

 

[Armani]

Citizenship is ok, what you need is a proper residence.

I know that many Italians evade taxes, even those using US LLCs, it is pretty normal and perceived risk is low but it is never a good idea.

For peace of mind, just pay your taxes (you can always optimize) or leave

Why can't you take a non dom res in Cyprus for example?