If you live in a country such as Malta, the UK, Cyprus, Ireland, Dubai or similar, where taxes are low, the USA opens up attractive tax planning opportunities.
As a so-called exempt taxpayer, you can benefit from favorable company structures in the States. On this page we introduce two different options you should know about when planning your business.
Who is this for?
In many countries there are tight restrictions on what counts as a legally sound way to reduce your taxes. In most countries, for example, it is not legal to set up a foreign company just to save tax. A company needs sound commercial reasons to exist.
That is why this offer is aimed at exempt taxpayers: clients who live in countries that either have no taxes at all or where foreign income can be received tax-free. For clients resident anywhere else, these structures are not an option, and Mount Bonnell Advisors strongly advises you against them.
If your main residence is in a non-dom country or a country with similar tax rules (e.g. Ireland, Malta, Cyprus, Dubai, Thailand; since April 2025 the UK has replaced non-dom status with the four-year FIG regime), you can benefit fully from the structures below, both in terms of taxation at company level and taxation at personal level.
If you live in a high-tax country in Europe and plan to expand into the USA, this page shows you the most tax-efficient way to set it up.
How can I optimize my tax situation?
Here we present 2 tax planning solutions, each designed for clients in different circumstances.
1. Exempt LLC
The first option is based on an Exempt LLC, a tax-free LLC.
An LLC with one member, known as a Single Member LLC, is treated by the IRS as a disregarded entity. That means it is registered for tax purposes but not taxed, provided the LLC has no presence in the USA that would trigger US tax liability. Under certain conditions, you can even sell goods in the States or do similar business through this company. Contrary to popular belief, US-source income is not always taxable. Find out more on our page Avoiding US tax on US profits. Our sister firm zerotax.llc specializes in US LLCs without a US permanent establishment.
Keep in mind that the Exempt LLC's tax exemption naturally applies only in the USA. Other countries may well have tax claims. If your LLC does business in EU countries, for example, you may need to register it for EU VAT. In principle, this applies to all goods and (digital) products sold to consumers in Europe. The only exceptions are consulting services, online training and the like. On platforms such as Amazon, even non-EU companies can now only sell with a VAT ID. A US company does not protect you from this tax.
Depending on your industry, one drawback of this structure can be a lack of credibility. If you live in Dubai, say, and do business in Europe through your US LLC, European customers may well be wary of the LLC and might even consider it dubious, especially if it was formed in a state like Delaware or Wyoming.
But if an American LLC in your imprint would hurt your business, we have an optimized structure for you too, and that is what we cover next.
Learn more about the Exempt LLC here.
2. LLC & LTD agency structure
This structure is also suited to clients living in low-tax countries. It combines the reputable public image of a European company with the tax efficiency of an American LLC.
As the name suggests, the LLC & LTD agency structure consists of a US LLC and a UK LTD. The LTD acts as a kind of sales agent for the LLC: the UK company represents your business to the outside world, giving you a British address and a British tax number.
With this setup, your invoices come not from an anonymous shell company in Delaware, but from a reputable company in London or, if you prefer, in Dublin. You are following the lead of many large companies such as Google, Facebook, Microsoft and plenty more.
If you sell a product through the American company, the LTD simply handles sales. The profits are then passed straight to the US LLC, where, under the conditions explained above, they stay tax-free. Only a small share flows to the UK company as agency fees, for example 10% of operating income. That share is, of course, taxed in the UK.
Learn more about the LLC & LTD agency structure here.