Company formation for a non-resident – Delaware LLC and London LTD


5

Got a few questions about forming a single member LLC in Delaware or LTD in London. I’m looking into forming a company abroad for an easier way to do business and billing (+ its cheaper) and am looking into ways a non-resident can open them in US and UK, along with pros and cons for each. Don’t need anything fancy since I’m the only founder and won’t be taking on any external funding – at least not for this particular one.

US part:

  • How hard is it to obtain a EIN number? Can you open a US bank account with that?
  • Experiences with online incorporation services – LegalZoom, Incorporate.com, etc. – some grill them that they provide low quality corporate documents. Any experiences?
  • Accountant & lawyer – how/when do you need to hire them? Rather learn to do it yourself? How much is a normal cost for a US based bookkeeper for a startup company?
  • If you sell digitally delivered goods, do you still need to pay any state fees other than the state you incorporate in?
  • How do you pay yourself from that company when you are not a US resident, where do you pay your personal income taxes?

UK part:

  • Can you open a UK bank account when you register a LTD there?
  • How is the business taxed if all of its revenues come from outside the UK?
  • How do you pay yourself from that company when you are not a UK resident, but are based in EU & where do you pay your personal income taxes?
  • Same as before with online incorporation services, any experiences with them? Or is it more “you get what you pay for…”?

Thanks in advance for all your answers :)

LLC Legal Tax Business

asked May 26 '11 at 08:10
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Teekay
394 points

2 Answers


3

I can't answer all of your questions, but here goes, for the US part:

  1. You can incorporate in Delaware via http://www.delawareinc.com (this is the URL of Harvard Business Services). They are a reliable company. Go for the full option including a company seal etc., you use that to validate your official documents.
  2. HBS can get an EIN for you, at a nominal cost (I believe it's something like $100).
  3. You can get a bank account with an EIN, but you need more:

    (a) You need a valid Business License, which you can get from the Delaware Government. You can file for that online, I believe it costs around $75 for a year. Take a look at https://onestop.delaware.gov/osbrlpublic. They will e-mail you a temporary license and then surface-mail the actual document.

    (b) You need to physically walk into a bank in Delaware (for instance, WSFS Bank).

    (c) You need to bring your EIN document, your passport, your articles of Incorporation, the documents that HBS provided (including the Apostille), a bank reference letter, a recent utility bill in your name, your company's Business License and an initial deposit (say, $500 -- although I don't think there's a specific minimum).

  4. If you have a company in your home country, you can pay yourself by invoicing your DE company. Other than that, I don't know how it would work -- I'm not paying myself yet.

I hope this helps!

answered May 26 '11 at 17:06
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Roy Dictus
343 points

1

You obviously need to speak with real professionals about this. There are plenty of trust companies that would be very happy to offer you advice. Don't rely on free advice from the internet, especially not this.

On the UK side, corporation tax is not territorial, so your company would pay tax on its profits and capital realisations (subject to double tax treaties and tax residence).

Bank accounts shouldn't be a problem.

You pay personal taxes based on your own tax residence. There is no bar to a UK company having employees outside of the UK, or distributing dividends to non-resident members.

However, if you're not based in the UK, I don't know why you would choose to incorporate there, unless you need to incorporate very quickly, or to simplify operating in the UK. Look at other European jurisdictions, based on servicers fees, corporate tax rates, and tax treaties with wherever you are. And, speak to a professional.

answered Jul 19 '11 at 00:50
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Marcin
526 points
  • I think you're missing the non-resident LTD UK company. You can incorporate in the UK, and operate in the other european country where you are resident. This is often beneficial, since the LTD will sometimes not be subject to stringent laws that apply to the "default" company type in the country where you operate. For example, in the Nordic countries, it is very common for carpenters to be operating as a UK LTD, because they can distribute profits on a monthly basis, they get the social benefits of an employee, the capital requirements are smaller, and accounting is simpler. – User239558 6 years ago
  • @user239558 I'm not missing it. My whole answer is about the use of a UK company by a non-resident. The scenario you refer to is advantageous because of tax treaties. It is not applicable in all cases, and certainly not where there are much more significant revenues. – Marcin 6 years ago

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