Nonresident Tax Planning for Cross-Border Business Operations

Structuring nonresident investment in cross-border business operations in the US requires coordinated planning under both the US tax system and the tax system of the investor’s home country, as well as that of any third country where a holding company or trust may be established. It often also involves planning for the application of an income tax treaty between the United States and the investor’s home country (or such third country holding company or trust jurisdictions) to improve the tax result experienced by the nonresident cross-border investor. For individual investors, we also integrate international estate planning into the structure, to make sure the investment structure is consistent with the nonresident investor’s home country estate plan.

If the investment is to be made into an entity operating in California, tax-efficient structuring from a California point of view is also a must (see our webpage entitled “Nonresident Investors in Entities Doing Business in California”).

In such cases, we assist with choice of entity issues in the US (including consideration of possible qualification for reduced rates of tax on future sale of the business for start-up and “small” businesses), capitalization options (including structuring financing to achieve an optimum mix of debt and equity for a US holding or operating company), planning for minimizing US tax on US operations, planning to avoid double taxation and planning for sale of the business, taking it public or other possible “exit” scenarios. As discussed on our page entitled “US Estate, Gift and Other Transfer Tax Planning,” our experience in planning for cross-border business operations extends to minimizing US transfer taxes on nonresident business owners in relation to such investments. We also advise nonresident investors in US businesses concerning US information reporting and withholding tax obligations that may apply to them.

We can also assist with drafting intercompany and third-party agreements to make the business operational, employment contracts, and joint venture or “buy-sell” agreements for investments involving multiple parties. We also incorporate immigration considerations into the analysis if the investment is associated with the issuance of one or more US investment or work visas. We advise on California probate avoidance when the owners include one or more individuals who will reside in California. US withholding tax planning for cross-border income flows to avoid or reduce the possibility of international double taxation should also be incorporated into the analysis.

As indicated above, we can assist nonresident investors and entrepreneurs with all aspects of your business operations in the US. We have helped many international businesses owned by nonresidents and residents or citizens alike with planning their global business operations, as well, from US and international sales and distribution operations, to US and offshore licensing, US and offshore manufacturing and US and offshore headquarters operations (see Mr. Lance’s biography on the “About Us” page). We welcome any inquiries that you may have concerning your specific planning situation. Feel free to call us at (760) 578-5093, contact us via email at Brent@LanceCrossborder.com or by using our online contact form. We will respond to all relevant inquiries quickly, without any obligation.