While I'm researching what I need to pay in taxes for my LLC formed in Delaware (I'm a non-resident alien from China), I found this page which is very interesting: http://www.webhostingtalk.com/archive/index.php/t-331329.html
Take this post for example,
I was about to apply for an LLC, but after I red this thread I contaced an accountant to make sure that I will not be paying Taxes. Here is the naswer of the accountant:
Question: Do I have to pay Taxes if I established an LLC in Delaware although I will not be doing business in the USA, as my business is located in Saudi Arabia. Some US clients do buy from us at our web site, but I send them their orders from here via the post office.
Answer:
Basic tax rules:
Any single member LLC, where the sole member is a foreign person for U.S. tax purposes (meaning he or she is not a US citizen, does not have a U.S. green card or who does not reside in the US. for more than a month or so each year) - the LLC is ignored for U.S. and most states income tax purposes. Accordingly, any income earned is treated as earned directly by the foreign person. Such income is not subject to U.S. taxation so long as the foreign person did not perform his services or sales activity in the U.S. himself or thru an employee or agent. This means someone (the foreign person, employee of the foreign person or agent thereof) must be physically present in the U.S. while earning the income. It is apparent that many, if not most of the single member LLCs are conducted purely over the internet with no physical presence in the U.S.
For example: If a French citizen, the owner of Internet business that sells goods over the internet receives an order from a U.S. citizen. The order is received, goods shipped and invoice sent by the French sole member of a U.S. LLC. The Sole member never sets foot on U.S. soil - nor did he have any employees or agents conducting his business on U.S. soil.
Would the income earned be taxable in the U.S. or require a return to be filed in the U.S.?
The answer is NO...no reporting of the income nor are payments of any taxes required. I hope this is clearer. This rule only applies to the Single Member LLC
It sounds too good to be true.
Considering this thread was 8 years old, my question is if this was true and if it was, does it still hold true today?
