I'm currently researching how to go about creating a US subsidiary of a UK company. One of the people involved in the business wondered if it would be possible to use an LLP to do business in the US. In my reading about this issue, and talking to some people who know more about this than I do, I haven't come across situations where this is the case. So I was wondering, is there some reason why this would be impossible, difficult, or undesirable? The main reason for doing this would be to avoid the double taxation issue with a C Corporation, and what seems to be an uncertain tax status for US LLCs in the UK. Thanks in advance for any thoughts.
UK Tax International Partnerships
Are you sure that you really need a US-Company? Are your Sales Volumes and Profits high enough?
If you could answer the questions with yes, than I recommend to talk to a lawyer and a tax advisor with experience in setting up subsidiaries between USA and UK.
IMHO no matter what legal entity you will use in the USA, you will always have to deal with taxation or how about to avoid double taxation. There is no easy way out. If you do it wrong, you will pay taxes twice.
So, better invest a bit of money in consultation, before paying tousands of pounds or dollars in taxes you would have been able to avoid.
This advice comes late, but its free ;-)
Hope it helps.
If you mean an English LLP, then the answer is probably no. First of all, an English LLP must have two members, so you will need a second company (which could be a sub of the first).
Secondly, and this is the important bit, HMRC and the FSA have quite definite views about what you should be doing with an LLP. An LLP where not all partners are active managers is treated as an investment vehicle.
Disclaimer: Do not rely on free advice from the internet.
Definitely get some advice up front. I've been through this with putting up a US subsidiary of a company based in the EU. A couple of key points, from my experience
Rambled on a bit, there, but trust me, I've been through it. I'm relatively new here, but if you need more info, PM me - I think you can do that....