Delaware LLC for nonresident. What the tax?
I’m a Kuwaiti citizen working and living in Kuwait. We don’t have taxes in Kuwait.
I’m a programmer in my spare time and I want to sell desktop applications on my website, iPhone applications in the iTunes App Store, and subscriptions to web services.
As a Kuwaiti person, I can’t even get a paypal business account, let alone a business bank account and merchant services.
So my plan is to form an LLC in Delaware to benefit from the merchant services available to US entities.
According to my research and reading:
1) a single owner LLC in Delaware is treated like a sole proprietor
2) a nonresident alien doesn’t have to pay a self-employment tax
3) there are no sales taxes in Delaware
So my question is, what taxes DO I have to pay and under which categories do they fall?
Thank you.
Sorry for being redundant, but I want to stress that my question is:
In the situation that I’ve described, what taxes do I have to pay?
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3 comments
Been there, done that on October 17, 2009 at 3:55 am
Delaware does not have sales tax, true, but they do impose a yearly franchise fee (tax) on LLC’s. You can find out more about it on the Delaware Division of Corporation’s website:
http://www.corp.delaware.gov
You will also need to have a registered agent in the State of Delaware, since you do not live there. There is a yearly fee for this service, as they are your domestic contact person should you be served with a lawsuit, or receive official correspondence from the state. Not sure about the specifics of a Kuwaiti citizen having a US LLC, but this will give you a start
123456789 on October 17, 2009 at 3:55 am
Before going into any details, you would need a tax id to register for pretty much anything, including forming a LLC. This number is something you cannot obtain based on the background you have presented.
Chuckie O on October 17, 2009 at 3:55 am
If you do manage to "organize" an LLC in Delaware (or any other state, for that matter), you will be liable for filing a 1040NR return, at a minimum. Unless you don’t make any money, of course.
It is not as much of a tax haven as you may think.
You will need an EIN to start the LLC (anywhere), as well as a registered agent in Delaware (or whatever state you organize in). There will be tax filing requirements, both federal and state.
Getting a paypal account is easy compared to that.