Wyoming LLC, FACTA report?

[Leeqap]

Hello,

I'm freelancer developer in EU (Denmark) and I would like to incorporate an LLC in Wyoming, because I hate paperwork and don't want to pay 50-60% tax in my country. My income is 15-20K EUR / month. I have clients in several countries (EU, UAE, AU, USA etc... ). I don't have experience in international tax matters, but need to solve this problem.

I would like to use STRIPE with TransferWise borderless, but i'm not sure in it.

What's your experience, the US goverment will report the LLC's revenue to danish tax authorities because the owner is danish? The FACTA is not clear for me, because i'm only a member in this LLC and I'm not US resident. I don't have salary from the LLC.

 

[Martin Everson]

Whats wrong with relocating‍ to lower tax or tax free country?

 

[Leeqap]

Relocating to another country

I didn't think about that yet 🙂

 

[Leeqap]

Martin, do you any experience with FACTA?

 

[JustAnotherNomad]

That doesn't sound like a smart solution⁢ at all. Pretty sure TransferWise will report it. The company is not even tax resident︀ in the US, it is transparent taxation. It's basically a Danish company with a US︁ address. (I'm no expert, but that's what I've read online so far.)

Even if the revenue isn't reported, you will be required to︅ report the company registration to your home country. Failure to do so will most likely︆ be treated as tax evasion.
Meaning they don't even have to know the revenue to︇ prosecute you. They just need to know that you created this company and did not︈ inform them. It also shouldn't be too difficult for them to estimate your revenue based︉ on previous years.
You may want to rethink that plan.

 

[Leeqap]

But the company is not danish, but US. I want to start a new company‌ in Wyoming. 🙂

 

[John Andrews]

In theory you can have a US LLC but you would have to report is‌ as personal income in Denmark. Obviously this doesn't make any sense.

Here's what will happen.‍ Tax authorities in Denmark will figure out you have an offshore company - either because⁠ they got the info from TransferWise (via reporting) or because you bought expensive stuff and⁤ someone reported you (and then it will be up to you to prove the source⁣ of funds).

There are 3 legal options here:

1. move out of Denmark to some other⁢ country
   
2. set up a limited company abroad with enough substance (office, employees, ...)
   
3. set up︀ a company in Denmark
   

I suggest going for the 1st option but it highly depends︁ on your revenue/net worth and preferences. With 15-20k EUR/month you can simply move to Cyprus︂ and become a non-dom resident.

 

[JustAnotherNomad]

LLCs without US employees use transparent taxation. If‍ you're the only shareholder, tax-wise, it will be like setting up a Danish company/sole proprietorship.⁠

 

[JustAnotherNomad]

But you need to spend at least 60 days there every‍ year and can't be in any other country for 183 days or more - right?⁠

 

[John Andrews]

Yes that's correct.

 

[JustAnotherNomad]

If moving isn't really an option at the moment (also note that Denmark probably has‌ very strict rules about breaking tax residency status), you could consider finding someone you trust‍ in a low-tax country to invoice your clients. You could then invoice that company. You⁠ would basically be paying them a high commission.
But then the money would be theirs⁤ and there would be the challenge of getting it out of that company later.

 

[JohnLocke]

You will get reported with that model. Don't forget that at the end of the⁤ year you will have to submit all your personal KYC documents to the accountant and⁣ at the latest at this time you will get reported.

 

[Leeqap]

Hmm, the TransferWise personal and business account is not different? The business account is the‌ company's account, it is not mine. Am I wrong?

 

[JustAnotherNomad]

Ever heard about KYC? They want to do know who it is they are doing business‍ with. They will ask for your passport.

 

[Martin Everson]

See threads on‌ FATCA on the forum. Subject has been covered extensively with my input in those threads.‍

 

[punkstar69]

Might sound out of topic, but which channels are you using in order to achieve such an income as a freelancer developer?

 

[p69]

Might sound out of topic, but which channels are you using in order to achieve‌ such an income as a freelancer developer?

 

[hmamunj]

There are two factors.
First
Do you want to get the money in Denmark back‌ from USA company,or not ?
If so , above program will not help you .‍
On the other hand ,Manage more than one director from Low tax Country's partner or⁠ undeveloped one . There are companies who offer that. and move the money into an⁤ offshore country .
Appoint yourself as an employee of the company and get paid for⁣ that.
By doing so , You may be only pay the tax you receive in⁢ your country's bank.
There are many other thing to be covered . Details discussion is︀ required with Tax experts.
Thank you

 

[JustAnotherNomad]

Right. That won’t raise any red flags whatsoever. If the work is carried out in‌ DK, it is probably taxable in DK (permanent establishment).