Cross-border Tax and Advisory Services for Non-Resident Investors and Business Owners.
Cross-border tax and advisory services are critical for non-resident investors in U.S. businesses and real property. There are numerous issues that can arise with regard to compliance with tax laws in the U.S. and the investor’s home country, as well as the proper entity selection and structure for foreign-owned U.S. businesses.
O’Brien & Panchuk, LLP is a cross-border tax and advisory firm that specializes in helping non-resident investors in U.S. businesses and real property deal with these and many other tax compliance issues. For example, the Tax Cuts and Jobs Act has dramatically changed the landscape for non-resident investors in U.S. businesses and real property.
Moreover, the TCJA has affected U.S. investors in foreign businesses — namely, U.S. interests in controlled foreign corporations (CFCs) — by introducing repatriation tax issues that didn’t exist previously.
O’Brien & Panchuk, LLP is a cross-border tax and advisory firm that specializes in helping non-resident investors in U.S. businesses and real property deal with these and many other tax compliance issues. For example, the Tax Cuts and Jobs Act has dramatically changed the landscape for non-resident investors in U.S. businesses and real property.
Moreover, the TCJA has affected U.S. investors in foreign businesses — namely, U.S. interests in controlled foreign corporations (CFCs) — by introducing repatriation tax issues that didn’t exist previously.
Dealing with Cross-Border Funds Transfers
There are also tax ramifications involved in the transfer of funds across borders. For example, the U.S. Internal Revenue Service (IRS) will automatically withhold a percentage of funds generated from certain types of transactions when funds are transferred out of the U.S. into foreign countries.
However, tax treaties exist between the U.S. and some countries that supersede the IRS’s withholding rules. O’Brien and Panchuk is well-versed in these kinds of treaties and all the other nuances involved in cross-border funds transfers so we can offer expert guidance that helps ensure tax compliance, saves you tax dollars and improves your cash flow.
However, tax treaties exist between the U.S. and some countries that supersede the IRS’s withholding rules. O’Brien and Panchuk is well-versed in these kinds of treaties and all the other nuances involved in cross-border funds transfers so we can offer expert guidance that helps ensure tax compliance, saves you tax dollars and improves your cash flow.
The Importance of Proper Entity Selection
Failure to choose the proper entity structure for U.S. businesses can also be extremely costly for non-resident investors, many of whom struggle when it comes to choosing the right type of entity for the business. There are several different entity structures available to owners of U.S. businesses — making the right choice is critical to minimizing U.S. federal income taxes.
The main entity structures for U.S. businesses are C corporation, S corporation, partnership, limited liability company (or LLC), limited liability partnership (or LLP) and sole proprietorship. Incorporation as a C corp or an S corp shields owners from personal liability for the business’ debts, obligations and losses and also offers potential tax benefits, including more flexibility in deducting business expenses.
If you choose to incorporate, your business will be treated as a C corporation unless you elect S status. S corps avoid the double taxation that occurs with C corps where income is taxed at both the corporate and individual levels. However, there are limitations with S corps that prevent some businesses from choosing S status, such as a limit on the type, residency and number of shareholders and how many classes of stock can be issued.
In addition, the entity type chosen in the U.S. may affect the way its earnings are taxed in the home country. The income of some entities can be taxed to their owners while other earnings can be shielded if the earnings remain in the U.S.
Partnerships and sole proprietorships are the simplest entity structures for U.S. businesses. No new business entity is created; instead, business income and expenses are reported on Schedule C which is filed with the owner’s personal tax return. These entity structures offer no liability protection for owners, who can be held personally liable for the debts, obligations and losses of the business.
LLCs and LLPs offer non-resident investors in U.S. businesses some of the benefits of incorporation and partnerships/sole proprietorships. Business profits and losses pass through directly to the owners, which avoids double taxation, while owners are shielded from personal liability for business debts, obligations and losses.
Another option is to organize the U.S. business as one type of entity while choosing to be taxed as another type. For example, you could organize a U.S. business as an LLC to enjoy personal liability protection while choosing to be taxed as a corporation, potentially saving money in income taxes. Tax rates on certain types of income differ drastically between individuals and corporations. For example, the federal corporate flat tax rate is 21% while the top individual rate is 37% in the highest tax bracket.
The main entity structures for U.S. businesses are C corporation, S corporation, partnership, limited liability company (or LLC), limited liability partnership (or LLP) and sole proprietorship. Incorporation as a C corp or an S corp shields owners from personal liability for the business’ debts, obligations and losses and also offers potential tax benefits, including more flexibility in deducting business expenses.
If you choose to incorporate, your business will be treated as a C corporation unless you elect S status. S corps avoid the double taxation that occurs with C corps where income is taxed at both the corporate and individual levels. However, there are limitations with S corps that prevent some businesses from choosing S status, such as a limit on the type, residency and number of shareholders and how many classes of stock can be issued.
In addition, the entity type chosen in the U.S. may affect the way its earnings are taxed in the home country. The income of some entities can be taxed to their owners while other earnings can be shielded if the earnings remain in the U.S.
Partnerships and sole proprietorships are the simplest entity structures for U.S. businesses. No new business entity is created; instead, business income and expenses are reported on Schedule C which is filed with the owner’s personal tax return. These entity structures offer no liability protection for owners, who can be held personally liable for the debts, obligations and losses of the business.
LLCs and LLPs offer non-resident investors in U.S. businesses some of the benefits of incorporation and partnerships/sole proprietorships. Business profits and losses pass through directly to the owners, which avoids double taxation, while owners are shielded from personal liability for business debts, obligations and losses.
Another option is to organize the U.S. business as one type of entity while choosing to be taxed as another type. For example, you could organize a U.S. business as an LLC to enjoy personal liability protection while choosing to be taxed as a corporation, potentially saving money in income taxes. Tax rates on certain types of income differ drastically between individuals and corporations. For example, the federal corporate flat tax rate is 21% while the top individual rate is 37% in the highest tax bracket.
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Let us help you with your Cross Border Planning and International Tax Needs
We’re a progressive Tax CPA firm that focuses on each on our clients’ needs and circumstances to provide tailored services and solutions that address their situation. It’s not the “one size fits” all approach that you find at the big box store—it’s a calculated and measured process to ensure that the result is only the very best.
Confronting Various Tax-Related Issues
There is a wide range of other tax-related issues that non-resident investors in U.S. businesses and real property may confront, including the following:
- Estate planning issues and trusts to arrange for the orderly distribution of a U.S. business or property if the non-resident investor dies while living overseas.
- Taxation of a U.S. business or property by the United States federal government and the non-resident investor’s home country upon the sale of the business or property.
- The effect of significant amounts of passive income on a non-resident investor’s overall tax situation.
One-Stop Shopping for Cross-Border Tax Planning
You could easily hire several different professionals to help you manage your cross-border tax issues, including a CPA, business broker, real estate agent, estate planning attorney and financial advisor. However, O-Brien and Panchuk offers comprehensive services under one roof, including tax planning, legal, fiduciary, trustee and general power of attorney.
In short, we are your one-stop shop for cross-border tax and advisory services. By working with us, you will save time and money and gain peace of mind in knowing that all of your cross-border tax issues are being handled efficiently by experienced professionals with decades of experience in cross-border tax planning and compliance.
To learn more about how you can benefit from O’Brien & Panchuk’s cross-border tax and advisory services, please give us a call at (760) 424-2246.
In short, we are your one-stop shop for cross-border tax and advisory services. By working with us, you will save time and money and gain peace of mind in knowing that all of your cross-border tax issues are being handled efficiently by experienced professionals with decades of experience in cross-border tax planning and compliance.
To learn more about how you can benefit from O’Brien & Panchuk’s cross-border tax and advisory services, please give us a call at (760) 424-2246.
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