An LLC is a relatively new type of entity in the U.S. It combines the limited liability of a corporation with the pass-through taxation of a partnership. Owners (or members, as they are called) of an LLC can be individuals or any type of entity, from anywhere in the world, and unlimited in number.
Using a Delaware LLC, non-resident aliens of the U.S. can typically avoid all U.S. federal taxes for their non-U.S. business activities.
The Delaware Corporate law structure does not impose restrictions on foreign ownership or management, and it does not require a Delaware LLC to have any presence in Delaware except for a registered office and registered agent.
Unlike other states, Delaware requires very little information to be made public in order to form an LLC. In Delaware, members and managers are not required to be named in.
When all the LLC’s income is “Non-United States Source Income” (as defined by the IRS), the non U.S. members of the LLC are typically not subject to U.S. federal income taxation. The non U.S. clients can take advantage of Delaware’s freedom of Contract and strong U.S. legal infrastructure, without having to provide any member information for public record, and the ability to operate anywhere in the world they choose, without being subject to filing U.S. tax forms.
The LLC is a hybrid business vehicle that combines some of the best features of corporations and partnerships. Like a corporation, an LLC has a legal existence separate and distinct from its owners, and its owners and managers are not personally liable for the company’s debts and obligations. Like a partnership, an LLC can be treated as a pass-through entity for tax purposes.
This feature, when combined with non-U.S. source income, means non-resident aliens of the U.S.A. will avoid all U.S. taxation when using an LLC.
The operations and management of the LLC are governed by a written agreement among its owners that is not required to be publicly filed or disclosed to the Delaware Division of Corporations. As a result, an LLC allows secure confidentiality and the ability to create a customized management structure, which prescribes the economic relationship among owners. The agreement can be written in any language and is not required to be translated into English.
The Delaware LLC statute allows parties to define their business relationship in a written agreement as they so desire. This is called “freedom of contract”. Delaware law provides rules only for those matters on which the parties have failed to agree. The stated policy of the Delaware LLC law is to give maximum effect to the principle of “freedom of contract” and to the enforceability of LLC agreements. .
While the Delaware Act permits a Delaware LLC to be managed by its members, it does not require members to be managers. More importantly, it also provides that no member or manager is obligated personally for any debt, obligation or liability of the Delaware LLC solely by reason of being a member or acting as a manager. This limitation on personal liability compares favorably with the limitation on personal liability enjoyed by shareholders of a Delaware corporation.
A Delaware LLC will be treated as a partnership for Federal income tax purposes; therefore, it will not be subject to U.S. Federal income tax. This means that a Delaware LLC can offer the same tax advantages as a Subhapter S corporation or a limited partnership, including the ability to provide through a written agreement for allocations of income and/or distributions to members in amounts which differ from the members’ economic interest in the LLC, as well as the ability to provide a basis to members for non-recourse debt. A Delaware LLC will also provide greater tax flexibility in areas of distributions and can be used as a valuable tool for estate planning and wealth transfers.
Limited Company
This type of company is applicable for a wide range of economic objects, in particular for active international commercial transac- tions, as a holding organization for subsidiary companies and for many more purposes. The minimum capital must be CHF 50 000, EUR 50 000 or USD 50 000. A Liechtenstein Company may have bearer or registered shares which are admissible; the minimum nominal value is not stipulated. It is also possible to issue voting shares.
Submission of Balance Sheet
The annual account examined by the audit authority is required to be submitted to the Liechtenstein Tax Administration.
New Tax Act of January 2011
The new Tax Act came into force in January 2011 (Act of 23 September 2010 concerning National and Municipal Taxes – “Gesetz vom 23. September u”ber die Landes- und Gemeindesteuern”), gave the Principality of Liechtenstein simple, internationally compati- ble tax laws which are compliant with European law.
Tax on earnings
In general terms, tax on earnings for all legal entities domiciled in the Principality of Liechtenstein amounts to 12.5% of taxable net earnings, with a minimum tax charge of CHF 1,200.00 per annum. Capital and coupon taxes are no longer imposed.
The attributable tax base does not include:
- Dividends
- Capital gains
- Earnings of non-domestic permanent establishments
- Real estate capital gains
- VAT: The VAT generally amounts to 8 %.
The VAT is levied on:
- All domestic deliveries of goods and the provision of services;
- The importation of goods;
- Goods consumed and services provided domestically;
- Services in excess of CHF 10 000.– procured abroad
- For certain articles of daily use (e.g. food and beverage as well as cereals, medicaments, newspapers) a reduced rate of VAT is applied. At the present time this amounts to 2.5 %.
- Exports are exempt from VAT.
About the Country
The state of St. Vincent and the Grenadines (SVG) is located north of Trinidad and Tobago. It is approximately 1,600 miles southeast of Miami and 100 miles from Barbados, and forms part of the Windward Islands, themselves being part of the Lesser Antilles. Today St. Vincent and the Grenadines is an independent democracy. The islands gained independence from Britain in 1979 but the Queen remains as Head of State and is represented by a Governor General. SVG is a member of the British Commonwealth, the United Nations, the Organization of American States, the International Labor Organization, Caricom, and the Organization of Eastern Caribbean States.
Compliance
a) Legal Nature/Purpose/Type of Law
The International Business Company (IBC) is a legal entity for business purposes (trading and investments). The International Business Companies (amendment and consolidation) Act Chapter 149 of the revised laws of St. Vincent and the Grenadines, 2009 and regulations SRO No. 6 of 2008 govern the incorporation of International Business Companies in St. Vincent and the Grenadines.
b) Capital/Shares and Shareholder
The share capital may be expressed in any currency. The minimum issued capital is one share of no par value or one share of par value.
Min. paid up capital: US$ 1
Type of shares: registered or bearer shares; bearer share certificates must be deposited with an approved custodian who needs not to reside in SVG.
c) Incorporation Procedure
By submission of:
– Articles of Incorporation
– Details of the situation of the registered office and agent
– Details of the currency of the capital, authorized capital and type of shares
d) Annual General Meetings (AGM)
There are no limitations on where or how meetings may be held.
e) Tax Status
An IBC receives upon formation a Government Certificate of Exemption from taxes for 25 years from the date of incorporation.
f) Annual Return and Financial Statements
Whilst there is no requirement to file audited accounts, a company is required to keep financial records, which reflect the financial position. Filing of annual return with the authorities is not required.
g) Tax Treaties
SVG has tax information exchange agreements with a number of countries.
h) Disclosures
No disclosure of beneficial owner’s identity to SVG registrar.
