Foreign Services, Foreigners and International Organizations
Your business is your passion. Your service is your life purpose and self expression. We get that and we are committed to your success. It is easy to do everything by yourself. We will help you to design systems for managing your people, compensation, building your team based on each person’s unique abilities, and scaling your businesses, so you can focus on what you do best and love and enjoy freedom, abundance, and fulfillment.
In today’s global, and digital world, we live and work in many countries in the world, and we set up our business in many jurisdictions. We ourselves are international and many of our clients are international. We have developed our unique expertise in international businesses.
With proper planning, you can save tens of thousands dollars on tax.
State income tax
If you are a US person living and working abroad, whether for foreign services or private businesses, you may choose a domicile where the State does not tax a nonresident domiciliary’ out of state income such as New York; and income case, even in state income, such as California. This also gives today’s digital professionals and investors a great advantage.
There are 10 states that under certain conditions, do not tax income earned while the tax payer is outside the state: California, Connecticut, Idaho, Minnesota, Missouri, New Jersey, New York, Oregon, Pennsylvania, and. West Virginia.
Even better, you can choose to domicile in a state that have no income tax at all. This way when you do return home and stay in the state full time, you still enjoy the state tax holiday. There are currently seven states with no state income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.
Foreign earned income exclusion
Federal employee cannot claim foreign earned income exclusion. However, you can claim foreign income exclusion if you are not a Federal employee in foreign services. Spouses of diplomats can work abroad and claim foreign earned income exclusion. Remember the income has to be foreign earned. So if your clients are in the US, best we structure a foreign company that do business with your US clients or with you US company that does business with your clients. And use your foreign company to pay you.
Many jurisdictions such as Hong Kong, Dubai, Curacao, and Cayman Islands, do not tax or have a preferred low rate, on income earned from foreign trade or from foreign sources. You may register a company in these jurisdiction and have it buy products and services from a high tax jurisdiction at a reasonably low price and sell them to a high tax jurisdiction with a reasonably high price. This effectively leaves most of your profit within the low tax jurisdictions. These jurisdiction often times have open financial market where you have many choices to invest your profit. Including investing for a captive insurance company.
Foreigners investing in the US
Foreigners do not have to pay capital gain tax if you invest in stocks, bonds, and companies. However, real estate is an exception. Best practice is to structure a US entity, such as a Delaware trust, or a C Corp, and buy the property in the US entity’s name. This way the US company can avoid being subject to tax withholding when selling the property. The capital gain now becomes a normal US capital gain. We now can use regular US Corporate tax strategies for investment and tax savings. What type of entity and which state to register has to do with your personal situations and goals.
Nevis trust and Cook Island trusts for asset protection
It is important you protect your family assets for generations to come with strong privacy and legal protections. If you are in a business that have a high chance of being sued, such as a medical doctor, a domestic trust may still be penetrated. We’ve found the Nevis trust and Cook Islands trust are the best for our clients’ family legacy.