Creating a C-Corp with a foreign owner?

Question

I have read that for startups a C-Corp is the preferred type of company. Is this the same for foreigners starting a business in the US? How is the situation if a foreign company owns the majority shares of the company? Is this a Tax issue?

Answers: 2 public & 1 private

C8502e11de
Lawyer

US International Tax rules are highly complex and the main question would really be why you want to create a US entity. Will you actually have operations here, or are you just selling into the US. Are there any US owners, what country are the foreign owners resident in? The list goes on...... A foreign company can certainly own a US entity (whether a corp or otherwise), but if you are actually carrying on a business in the US, you will want to plan carefully on the set up of the entity in order to be able to repatriate profits back to the foreign owner without excessive taxation. Let me know if you would like to discuss further in this forum, or off-line.

6b1e9e27ba
IP Consultant

Having started up more companies than I want to admit, I will say that creating a C-Corp is unduly burdensome and not needed upfront unless you already have serious investors. Most of us start out self-funding, friends and family or with angels and, in those cases, it is perfectly fine - and some VCs actually prefer - if you use an LLC.

When you get real money in the door, the investors will want to amend or change your corporate articles to standardize within their ecosystem. Using an LLC enables that flexibility when you convert to a C Corp and is a preferred vehicle to this end.

In the case where a foreign company owns a majority then I think you are forced into a C Corp but every state varies in its rules.

Recent questions

Do people really steal invention ideas?

I sometimes see questions on forums like Quora about how to stop people stealing your invention i...

4 5386 2
Is interpretation of known historical facts protectable under copyright law?

I am looking for useful sources on protecting copyright. I am in the process of writing a book ba...

3 6115 2
Fair Use and news feeds

What is the current wisdom on compiling news feeds on a third party website so far as copyright i...

1 3962 0
Looking for good patent firm

How to find a good patent firm to help me apply patent in USA

3 4320 2
What constitutes 'prior disclosure'?

This might be a silly question but I’m a bit confused by ‘prior disclosure’ as it applies to pate...

2 4823 1

Do you have a question about your invention or intellectual property?
Search the questions below or post your enquiry to one of our experts via Directory.
(User questions are no longer posted publicly on this page.)