Opening a European Subsidiary in the U.S


I am an American setting up a U.S. based subsidiary office for a small Eastern European company. What are the methods I can get paid assuming the company does not have capital for straight salary and I own 49% and they own 51% of the subsidiary LLC. I have negotiated a percentage of wholesale bulk sales which is negligible in terms of annual salary and the end consumer product goods will be the main revenue generator.

Is there a standard method of remuneration (salary vs. performance) or is it on a case by case basis? Is it typical for a CEO or Principal to be paid a % of gross sales, gross profit or net profit, etc if there is no salary?

Any one or other better for minimizing tax burden?


Salary International Corporate Structure Subsidiary

asked Jul 7 '11 at 00:12
11 points

2 Answers


I'd want to get paid out of money that I could get my hands on. Whatever cash flow is coming through the US subsidiary should be fair game.

Typically I see companies without much money paying salary and just having it deferred (so it accrues and the cash payout is when the company has the cash), and then having a bonus based on sales, etc., but in this situation, think outside the box.

answered Oct 5 '11 at 10:43
1,747 points
  • That depends a lot of contracts, but i would assume people want a contract with a US company too - and would pay the US subsidiary, which then pays the parent company for the services. This is teh easiest thing, and it keeps the cashflow going through the US company. – Net Tecture 12 years ago


If you're going to be the US face of a foreign company, you should think through what risk that puts you in. Meaning, if there's a taxation issue, who is the IRS going to call? You or the overseas parent.

From your post, it's hard to give any substantive advice on salary vs. profit sharing, etc., but I definitely would factor in the risk of being a non-US company's representation here.

answered Jul 7 '11 at 03:09
840 points
  • Factor in 0. Even in the US ithe ISR is not retarded enough not to understand international buinsess. – Net Tecture 12 years ago

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Salary International Corporate Structure Subsidiary