2024 Edition
The economic and social future of Spain does not look good, and I am not the only one who says so. Just take a look at the current situation:
I'm sure you can relate to several of these problems, right? This “Titanic” is sinking, and it's time to find a way out. That's why I created this The Ultimate Guide to LLCs in Spain, to help you pay less taxes and ensure a solid financial future.
Yes, there you live!
You have the opportunity to save yourself, we warn you 30 years in advance so you can prepare.
Let's start by clarifying that LLC means Limited Liability Company, or “Limited Liability Company” in Spanish. These are very popular and flexible legal business structures for many digital business either freelance. Because? Because they offer the best of both worlds: limited liability (typical of a corporation) and flexible management and taxation (similar to those of a company or a self-employed person), but without so many formalities. 🙌
LLCs are entities pass-through or transparent, which means that the profits they generate at the end of the year pass directly to their owner. That is, they must be taxed and cannot be accumulated without paying taxes. Therefore, LLCs are designed to check in, spend and tax. 💸
In addition, LLCs do not need to have a board of directors or hold annual meetings, which greatly simplifies their management. This feature is especially attractive for small businesses or individual entrepreneurs. 👍
One of the most important benefits of LLCs is “pass-through taxation.” This means that the company's profits and losses are reflected directly on the members' personal tax returns, thus avoiding double taxation to which corporations are subject. 🙌
Double taxation is when a company pays taxes on its profits and then its owners pay taxes again on the dividends they receive in their country of tax residence. This can mean a very high tax burden for entrepreneurs. Therefore, LLCs are an interesting option to avoid this problem.
Limited Liability Company
(Limited Liability Company) Only exists in the United States
Passthrough Entity
Profits flow to you automatically at the end of the tax year (The LLC will not “store” money)
The term "Pass-through” means that LLCs are not taxed as a business, but rather the profits they generate are considered directly as the owners' income for tax purposes. This is different from traditional companies, which pay taxes on their profits and then the owners pay taxes again on the dividends they receive in their country of tax residence. In an LLC, the money goes directly to your individual in the eyes of the Treasury, in personal income tax. 💸
To calculate the value of the tax in personal income tax, it is necessary to analyze the sections established according to the level of income. These sections vary depending on the state in which the LLC is located, so it is important to consult the regulations of each one. 📋
IRPF is the personal income tax, which taxes the income obtained by individuals. Depending on the amount of income you have, one percentage or another will be applied. For example, in Spain, the lowest bracket is 19% for incomes less than €12,450 and the highest is 45% for incomes over €60,000. 😮
To calculate the Personal income tax to pay if you have an LLC, you must apply the established sections according to the income level. These sections vary depending on the state in which the LLC is located, so it is important to consult the regulations of each one. 📋
Let's look at an example with the sections of Spain in 2024. Let's assume that you invoice €50,000 and have €10,000 of deductible expenses. So, you have €40,000 of profits left at the end of the year and you are going to pay taxes on that amount. To do this, we will apply the sections of the following table:
| Personal income tax sections 2024 | State type | Autonomous type | Total type |
|---|---|---|---|
| Up to €12,450 | 9,5 % | 9,5 % | 19 % |
| From €12,450 to €20,200 | 12 % | 12 % | 24 % |
| From €20,200 to €35,200 | 15 % | 15 % | 30 % |
| From €35,200 to €60,000 | 18,5 % | 18,5 % | 37 % |
| From €60,000 to €300,000 | 22,5 % | 22,5 % | 45 % |
| More than €300,000 | 24,5 % | 22,5 % | 47 % |
For calculate the personal income tax to pay for €40,000 of profits, we will apply the Personal income tax sections 2024:
Adding the values of each section, the total personal income tax payable would be 2,365.5 + 1,860 + 4,500 + 1,776 = 10,501.5 euros. Therefore, with 40,000 euros of profits in 2024, the total payable of Income Tax would amount to 10,501.5 euros (a 26,2% of the total).
A Disregarded Single-Member LLC is a legal structure that only has one member, who is usually the owner or founder of the company. This structure has many advantages, but also some limitations. For example, you cannot have partners or shareholders, which can make it difficult to grow or finance your business. Additionally, you must comply with the tax obligations of both the United States and Spain, which can involve additional complexity and cost. Therefore, it is important that you carefully evaluate whether this structure adapts to your needs and objectives.
No permanent establishment
No offices/properties or salaried workers in the name of the LLC in Spain
Limited Liability
Protection of your personal assets
This type of responsibility implies that the owner of the LLC and his personal assets are protected from problems financial or legal that may arise in different situations, since this weight falls on the company, since the LLC is a legal person.
In this case, the risk would only affect the assets of the company and not those of its owners. But of course, if an owner offers personal guarantees for a loan of the company, it could also be personally responsible of that debt. 😮
As you can see, limited liability is a great advantage of LLCs, but it is not absolute. There are certain circumstances in which you may lose the protection of your personal assets and have to respond with your assets. Therefore, it is important that you be prudent and responsible when managing your LLC, and that you do not engage in illegal, fraudulent or negligent activities that could compromise your security.
It is important to understand that an LLC's financial balances do not need to be exactly zero at the end of the fiscal year. The goal is rather to get the difference between income and expenses, that is, net profit, as close to zero as possible. But why is this result sought?
It is essential to clarify a misunderstanding: the argument that “even if you leave the net profit at 0, you still owe money to the Treasury” is not valid. If when calculating the net profit, the result is zero, this simply indicates that there were no profits or losses during the tax period, which, in turn, means that there is no tax debt associated with undeclared profits. 🙌
Therefore, we can state that at the end of the fiscal year, the prudent approach should not be to try to balance account balances to an exact zero. Instead, the priority should be to keep accurate accounting of all income and expenses. This strategy ensures that all tax obligations are met correctly, avoiding confusion about the financial situation of the LLC. 👍
The net profit of an LLC is a key factor in determining the personal income tax payable. Therefore, it is important that you know how to calculate it and how optimize it. One way to do this is to increase your deductible expenses, such as travel expenses, training expenses, advertising expenses, material expenses, etc. These are some of the strategies that I can explain to you in my guide for digital entrepreneurs who open an LLC in the USA.
If you are an entrepreneur in Spain and you dedicate yourself to digital businesses with a global clientele, you may be interested to know that there is a legal structure that can offer you many advantages: the LLC. 🙌
The LLC is a limited liability company that is created in the United States and that allows you to save taxes, protect your assets and simplify your management. 💸
But not all activities are suitable for an LLC. There are some profiles that can benefit more from this option than others. These are:
There are some profiles of digital entrepreneurs who can benefit from opening an LLC in the USA. However, this does not mean that it is a valid option for all cases. Before deciding on this legal structure, you must carefully evaluate your situation, your activity, your clientele and your objectives. You should also inform yourself about the tax, legal and administrative obligations that come with having an LLC, both in the United States and in Spain. Therefore, I advise you to consult with us, so that we can guide you on the advantages and disadvantages of this option, and help you create and maintain your LLC legally and safely.
Basically this
If this is your routine, the LLC is your best friend.
An LLC is not for everyone
If you are on this list... we are very sorry 🙁
In the fiscal framework of Spain and the United States, only certain types of businesses can benefit from favorable tax structures like the LLC. In Spain, these are companies without a fixed base or employees in the country. In the United States, they are those that do not meet the criteria to be considered a “ANDngaged in Trade or business in the ORnited Yestates” (ETBUS).
So what is the type of business less suitable to ride under these conditions? There are different models, which we can even come across on a daily basis, that would not be suitable for opening an LLC:
If your business is a specific type, keep in mind that a Limited Liability Company (LLC) alone may not be suitable or compatible with your needs. Consider complementing it with a Limited Company (SL) to maximize efficiency and tax compliance. 🚀
LLCs offer great flexibility and freedom to entrepreneurs who want to expand their businesses in the international market. By creating an LLC, you protect your personal assets from possible claims, and access financing and collaboration opportunities with other entities. Before creating an LLC, make sure your business meets the legal and tax requirements of both countries, and enjoy the advantages of this legal form.
ETBUS (ANDngaged in Trade or business in the ORnited Yestates) is a crucial concept for foreign business entities that operate in the United States. It refers to the economic activity carried out within the country that can generate specific tax obligations with the IRS. This term applies to both multi-member entities and single member LLCs, although the latter are typically treated as disregarded entities for federal tax purposes.
A single member disregarded entity LLC is considered part and parcel of its owner and therefore does not file separate tax returns at the federal level. However, it can be classified as ETBUS under certain circumstances:
Physical presence in the US: If the single member LLC has offices, warehouses or other physical establishments in the United States, it can be considered ETBUS.
Revenue generated in the US: If the single member LLC earns specific income from sources within the United States, such as rents, royalties or interest, it could be classified as an ETBUS.
Operations with significant reach in the US: If the single member LLC makes significant sales in the United States or has a significant customer or user base in the country, this could also lead to classification as an ETBUS.
Determining whether a single member disregarded entity LLC is ETBUS involves a detailed evaluation of its business activity in relation to the criteria established by the US tax authorities. Although the single member LLC does not file a separate tax return, its owner must be aware of the tax requirements and implications of being considered ETBUS to properly comply with tax obligations in the United States.
The ETBUS concept is not the only one that affects the taxation of foreign companies in the US. There are other factors that can influence the tax burden of your business, such as the type of entity, the tax treaty between your country and the US. ., and the deductions and credits available. Before starting or expanding your activity in the US, consult with a tax advisor specialized in the US market. 😊
Create an LLC (Limited Liability Company) can be a good option for entrepreneurs and digital companies who want to enjoy a series of both fiscal and operational benefits. These are some of the reasons to consider this legal form: 😍
LLCs have their origins in common law and are not recognized in many countries in the European Union. Before creating an LLC, be well informed about the legal and tax implications it entails. You can also consult with an expert in international taxation to help you choose the best option for your business.
Bonus: Pay less taxes. Do you think the current use of them in Spain is correct? Click to see it in detail.
An anonymous LLC allows its owners to maintain their privacy in official records, especially in places like New Mexico, Delaware and Wyoming. However, this anonymity does not affect the Fiscal obligations before the Spanish Tax Agency. It is a common misconception that the anonymity of the LLC allows you to avoid reporting income or improperly deducting personal expenses. 😬
Whether anonymous or not, the LLC must comply with the Spanish tax legislation, reporting all your income. In addition, financial operations, including transfers between the LLC and accounts in Spain, must be carried out with full transparency to avoid incurring tax irregularities. 💯
Anonymity does not offer a way to avoid taxes, as it would be the way to penalties for tax fraud in that case. So regardless of the level of privacy, owners should be sure to properly report their LLC's income. The key is in the honest management and compliance with tax rules to avoid legal problems and ensure the well-being of the business. 🙌
Anonymous LLCs may have competitive advantages in some markets, such as cryptocurrency or computer security. By offering a higher level of privacy, they can attract customers who value this aspect and differentiate themselves from the competition. Before creating an anonymous LLC, carefully evaluate the pros and cons of this option for your business. 😊
Start a business in the United States is much more simple and digitized compared to other countries, where procedures are usually in person and more complex. So cheer up, these requirements will be included in our service! 🙌 To open an LLC in the US, these requirements must be met, if you meet them the process will be fast and 100% online:
The requirements for opening an LLC in the US may vary depending on the state where you register it. Some states have stricter or more flexible rules than others, which can affect the protection, taxation and management of your business. Before choosing a state for your LLC, compare the advantages and disadvantages of each and choose the one that best suits your needs. 😊
By not contributing to the Social Security system in Spain as the owner of an LLC, the right to public pension or to generate days in the unemployment benefit. 😢
An alternative is reinvest that savings in a private pension. If with the LLC you save 5,000 euros per year, in 10 years you could save 50,000 euros, in 20 years, 100,000 euros, and in 30 years, 150,000 euros. 💰
These funds could provide a financial support in retirement from 67 to 90 years old if you invest them wisely. 📈
There are different types of private pension plans, with different characteristics, advantages and risks. Before choosing one, find out about the conditions, commissions, profitability and taxation of each option. You can also consult with a financial advisor to help you plan your future.
USA It is a very destination attractive for entrepreneurs who want establish an LLC (Limited Liability Company). The process is economical, fast and simple, and offers a series of both fiscal and operational benefits. 
The LLC is a legal form that was created in the United States to provide a legal solution to the self-employed who had a business with a moderate level of income. However, over time, the LLC has gone evolving and has become a very popular option for all types of companies, even those that manage million dollar transactions. Additionally, the LLC allows non-resident foreigners They can create and manage a company in the United States without having to travel to the country. 😎
But the United States is not the only country that offers facilities to create a company from abroad. There are other options that may also be interesting, depending on your goals and needs. For example:
There are other countries that also offer options to create a company from abroad, such as Singapore, Hong Kong or Cyprus. Before deciding on one country or another, compare the advantages and disadvantages of each, and consult with an expert in international taxation to help you choose the best option for your business.
Have a company in the United States means having to comply with two tax administrations different: the Spanish and the American.
There is an agreement between Spain and the United States to avoid double taxation. This agreement allows you to deduct the taxes you have paid in the United States from those you have to pay in Spain, as long as you present Form 1040-NR with the ITIN. Before filing your tax return, consult with a tax advisor specialized in the US market.
Institute Revenue Service
There you only inform, information is power.
The IRS (Internal Revenue Service) is the United States tax agency, and has different rules for LLCs depending on the number of members and the tax options they choose.
We will help you create a Sole Proprietorship LLC in your name, since these are the ones They will not pay taxes in the US., only in your country of tax residence, as long as you meet certain requirements, such as not having employees or offices in the US 😊
The IRS has an agreement with the Spanish Tax Agency to exchange information on the activities of foreign companies in the US. This means that you must comply with your tax obligations in both countries and avoid any type of fraud or tax evasion.
Spain and the United States They have an agreement so that citizens and companies that make money in both countries do not have to pay taxes twice for the same. The objective is to put clear rules about where and how much they should pay, and so on promote trade and investment between the two nations. 🤝
Think that you are from one country and earn money in another. This agreement tells you that you may not have to pay taxes in the country where you earned that money. For example, if you are Spanish and earn something in the United States, you may not have to share your earnings with the US government.
But if you already paid taxes in the United States, this agreement helps you not hurt as much in Spain. Can deduct what you paid in the United States than what you have to pay in Spain for that same money. This prevents your pocket from suffering from paying taxes twice for the same thing in two different places. 💶
If you want more details, you can consult the “Double taxation agreement signed by Spain with the US” which came into force on February 22, 1990. 📄
This agreement also includes other advantages, such as the elimination of double taxation on dividends, interest and royalties, or the reduction of withholding at source. Before doing business between Spain and the United States, be well informed about the conditions and benefits of this agreement. You can also count on a tax advisor specialized in the US market.
Entities in the income allocation regime (RAR) They are those that do not pay taxes as an entity, but rather their income is distributed among its members, who declare it on their personal taxes. 📋
It also applies to some foreign entities, such as American Single Member Disregarded LLCs, which operate in Spain and pay taxes in an equivalent manner. 🌐
The objective of this regime is to avoid double taxation of income, both at the entity and partner level, and follow the principle of tax transparency.
[When you complete your tax return yourself, you will see that it is NOT possible to enter the 100% participation due to limitations of the form, you will have to use other software or hire the services of an agent to do it correctly on your behalf.
You are responsible for ensuring that all information you provide is true and correct. This means that if there are any errors or inaccuracies in your return, you will be solely responsible.
It is highly recommended that you consult with a tax manager or professional before submitting your return to the tax authorities. This is important to ensure that you are complying with all tax rules and regulations, and to avoid potential fines or penalties.]
We strongly recommend using professional services such as TaxDown to ensure your tax return is handled correctly and efficiently.
Additionally, it is important that you have the following documents prepared or on hand in case they are later required by the Treasury:
Having these documents will facilitate the filing process and ensure that you are prepared for any requests for additional information from the tax authorities.
A LLC (Limited Liability Company) is a legal form that is subject to the laws of the state where it was registered. Therefore, if you create a US LLC, you will have to comply with the United States jurisdiction, even if your business is online and operates in Spain or Europe. 🇺🇸
If your business is 100% digital and you do not have employees or offices in Spain, you will not have to follow the rules or taxation of a Spanish company. 😎
This is because, according to Spanish law, if your LLC does not have a permanent establishment in Spain. That is, it does not have a significant physical presence (such as offices or factories) nor a salaried worker in Spain who can act on its behalf. So you will not have to pay taxes in the US, as long as your LLC is tax transparent and has a structure similar to the income allocation regime. 💵
This implies that you will only have to pay personal income tax in Spain for the benefits you obtain, without having to pay Corporate Tax. This can mean considerable tax savings, especially for entities with a high level of profits. 🙌
Did you know there are over 2 million LLCs registered in the US? LLCs are very popular among American entrepreneurs because they offer them great flexibility and protection.
Although your LLC cannot have permanent establishment in Spain, because we want it to remain a non-resident foreign company and therefore an LLC that follows the US tax rules, there is another factor that, although not decisive, can emphasize our beloved Tax Agency putting its finger on the sore spot. : the effective direction of your company.
Although the business activity is carried out by the LLC from the US, it could be argued that since the effective control of it is carried out by you from your home, it could be considered Spanish.
According to the Regulations: Article 8: Residence and tax domicile of Law 27/2014, of November 27, on Corporate Tax:
That it had been established in accordance with Spanish Law.
(NOT our case).
That has its registered office in Spanish territory.
(NOT our case).
That it has its effective management headquarters in Spanish territory. It will be understood that an entity has its effective management headquarters in Spanish territory when the direction and control of all of its activities is located there.
For this reason there is a gap that the Tax Agency could use to sabotage our American entrepreneurial dream.
However, there is a solution at our disposal: the appointment of a manager. 😎
The manager, whether a natural person or a legal entity, will assume the role of direction and control of the activities of your LLC from abroad. This allows you to concentrate solely on operations and financial management from Spain, while, in the eyes of the treasury, the management of the company is not carried out from this country.
Implementing this solution will ensure that our company complies with tax regulations in both the United States and Spain, and will protect our American entrepreneurial dream from any interference from the Tax Agency.
On the other hand, since the income allocation regime implies that the entities do not have their own legal personality, the concept of tax residence of entities should not (should) be directly applied, including the criteria of incorporation, registered office and seat of effective management.
Let's be frank, the Treasury is unpredictable, it is better to have one more shield for security. 🚀
However, because the interpretation and application of tax regulations can be complex and subject to change, it is advisable to consult with a certified tax professional for specific and up-to-date advice.
As managers of your LLC, we will act as a transparent and reliable intermediary to guarantee the company's legal and tax compliance, ensuring that all decisions are made in consultation with you, who will have the final say in all management matters.
Creation and maintenance of the LLC: We will be responsible for establishing the LLC and managing its continued operation, ensuring that it complies with all regulations and legal requirements.
Operational maintenance: We will process the necessary forms, keep records up to date, and ensure that the business is in good working order at all times.
Management decision making: We will act as operational leaders of the company, making strategic decisions and directing the course of operations from the United States, in line with your guidelines.
Tax Returns and Tax Compliance: We will prepare and file all necessary tax returns with the IRS, as well as any other required government forms, to ensure compliance with all tax obligations.
Ongoing communication and support: We will maintain open and transparent communication with you, providing you with guidance and support whenever you need it.
Ultimately, we are committed to managing the LLC efficiently and legally, acting on your behalf to ensure compliance with all regulations and protect your interests as the owner.
Did you know that the first LLC (Limited Liability Company) was created in Wyoming in 1977? It was an innovative idea that soon spread throughout USA, since it offered many benefits for entrepreneurs. 🚀
By the 1990s, almost all states had adopted this legal figure, which combined the best of partnerships and corporations. Thus, a consistent legal framework was created so that entrepreneurs could choose this flexible and protective business form. 🙌
Today, LLCs remain very popular, especially in the context of digital commerce and global entrepreneurship. This is because they offer an optimal balance between the protection of a corporation and the simplicity of a personal partnership. In addition, they are characterized by their efficient organizational structure, simplified regulatory requirements and the elimination of double taxation typical of traditional corporations. With these factors, LLCs have positioned themselves as a preferred option for businesses seeking to expand internationally and for digital startups that value speed and the reduction of bureaucracy. 🌎
Are there some states that are more advantageous than others for creating an LLC? For example, Delaware, Wyoming, and New Mexico are some of the most popular, as they have very business-friendly laws, very low taxes, and high confidentiality. If you want to create an LLC in the US, we will always recommend New Mexico.
If you want to create a LLC (Limited Liability Company) in USA, you have to choose carefully the state where you are going to register it. Not all states offer the same conditions and benefits for LLCs. There are some that stand out for their tax, legal and administrative advantages.
Among the most favorable states for LLCs, there are three that stand out: New Mexico, Wyoming and Delaware. These states offer various advantages that may be attractive to Spanish entrepreneurs, depending on their specific needs and objectives. 🙌
New Mexico, Wyoming and Delaware are the only four US states that allow the formation of anonymous LLCs. This means that they do not have to reveal the identity of their owners or their managers to the state, which gives them great privacy and protection. This feature is highly appreciated by entrepreneurs who want to maintain their anonymity and avoid possible problems with tax or legal authorities.
If you are a Spanish resident and want to create a company in USA, one of the best options is LLC (Limited Liability Company). It is a legal form that allows you to own a foreign company without legal or tax problems. 🇺🇸
One of the advantages of LLCs is that they are pass-through companies, that is, they do not pay taxes at the entity level, but rather their owners declare them on their personal taxes. Furthermore, by not having a permanent establishment in Spain, they do not have to follow the rules or taxation of a Spanish company. 😎
This makes LLCs ideal for businesses that want to operate globally, without being limited by geographic restrictions that might affect other forms of business. Thus, you can have a diversified customer base and take advantage of the opportunities of the digital market. 🌎
Another advantage of LLCs is that they can be anonymous, which gives you more privacy and protection. However, keep in mind that this may raise suspicions among the tax authorities, especially if you do not have justified reasons to open a company abroad. 😓
Therefore, it is important that you maintain transparency and comply with all tax obligations in both Spain and the United States. So, you will avoid problems with the Treasury and you can enjoy the benefits of having an LLC. 🙌
LLCs must file an information return with the U.S. IRS (Internal Revenue Service) each year. This is form 5472, which is used to report transactions between the LLC and its foreign owners or partners. This form is required for LLCs that have at least one foreign-owned 25%, and failure to comply may result in fines of up to $25,000. We will take care of submitting the forms on your behalf each year, don't worry.
If you are a Spanish tax resident and are considering creating a digital business, establishing an LLC (Limited Liability Company) in the United States offers you multiple advantages. You may be worried that the Treasury will claim that an LLC does not make economic sense, arguing that you should have set up an SL or become self-employed to invoice your clients. However, this couldn't be further from the truth. By opting for an LLC, you can take advantage of a number of benefits not available with other business structures, ensuring that your choice not only makes economic sense, but also puts you in an advantageous position for the success and growth of your business. digital. Here are some of the key advantages of establishing an LLC in the United States:
Establishing an LLC in the United States for your digital business can provide you with numerous advantages, from better access to banking services and the stability of the dollar, to the ease of using Stripe USA and the possibility of internationalizing your company. Plus, you'll enjoy limited protection, greater privacy, and simpler accounting, allowing you to focus on the growth and success of your business. 🌟📈
If you have decided to open a LLC (Limited Liability Company) in USA, you should know that there are several responsibilities and obligations that you must fulfill. It is not enough to create the company, but you must also keep it up to date with the legal and tax requirements of both countries.
Among the responsibilities that you must take into account are the following:
Regarding tax obligations, you must take into account the following:
As the owner of an LLC in the US, you must also comply with certain reporting obligations, which are as follows:
In addition to these obligations in the US, you must also comply with some reporting tax obligations in Spain, which are as follows:
Did you know that there are some differences between LLCs in different US states? For example, some states require LLCs to file an annual report, which is a document that summarizes the LLC's activity and data. Other states do not require it, which simplifies management and reduces costs. Therefore, I recommend that you compare the characteristics of each state before choosing where to register your LLC.
You are not going to pay anything there
(Inform only)
If you have one LLC (Limited Liability Company) in USA, you may be wondering if you can pay the 0% tax. The answer is yes, but only if you meet certain conditions. Not all LLCs have the same tax treatment, but it depends on several factors.
Among the conditions that you must meet are the following:
If you meet these three conditions, then your LLC will not have to pay taxes in the US. But be careful, that does not mean that you do not have to declare them. Even if your LLC is passthrough, that is, it does not pay taxes at the entity level, but rather its owners declare them on their personal taxes, you must still file an information return with the IRS (Internal Revenue Service), which is the tax agency of USA 📄
There are some states that do not have state corporate or personal income taxes. These states are Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. If you are going to be ETBUS and create an LLC in one of these states, you will be able to save even more taxes, as long as you meet the conditions that I have explained to you. Therefore, I recommend that you compare the tax advantages of each state before choosing where to register your LLC.
If you want to open a commercial bank account for your business, the first thing you should do is form a LLC (Limited Liability Company) in USA. Banks will ask you for a series of documents that you can only obtain when creating the LLC.
Among the documents you will need are the following:
These documents prove the legal existence of your business and are essential to comply with banking requirements. Without them, you will not be able to open a business bank account for your LLC at a NeoBank. 😓
Not all banks accept foreign LLCs. Some banks only work with businesses that have a physical presence in the US, such as an office or warehouse. Other banks will require you to travel to the US to open the account in person. Therefore, we will recommend banks that offer facilities and advantages for your LLC.
If you have one LLC (Limited Liability Company) in USA, you will surely want to have a commercial bank account that offers you facilities and advantages for your business. But not all banks are the same, and some can put obstacles in your way or charge you abusive fees. Therefore, we recommend that you opt for neobanks, which are digital banks that operate online and that offer you modern solutions adapted to your needs. 🚀
Among the most prominent neobanks for LLCs, there are two that stand out: wise and mercury. These neobanks are characterized by their compatibility with the cross-border and digital needs of LLCs. 🌎
wise: It is a neobank of Belgian origin that operates in euros (€) and American dollars ($). It allows you to open a multi-currency account with which you can send, receive and convert money in more than 50 currencies, with the real exchange rate and without hidden fees. In addition, it offers you a virtual debit card, with which you can pay online anywhere in the world. At the moment, they do not offer physical cards, as they have temporarily retired them, but they hope to offer them again soon. If you want to open an account with Wise, you can do so through this [link], which will give you priority access. 😎
mercury: It is an American neobank that offers its services in American dollars ($). It allows you to open a business account with which you can manage your business online, with tools such as invoicing, accounting, integrations with platforms such as Stripe or Shopify, and access to financing programs. In addition, it offers you a physical debit card and a virtual one, with which you can pay both online and in physical establishments. If you want to open an account with Mercury, you can do so through this [link], which will give you immediate access. 💵
Neobanks are safer than traditional banks. Although they operate online, neobanks comply with the same rules and regulations as conventional banks, and have the same data and fund protection guarantees. Furthermore, by not having physical branches or unnecessary employees, they can reduce their costs and offer you better conditions and services. Therefore, we recommend that you try neobanks and forget about the usual banks.
Did you know USA benefits from the LLCs (Limited Liability Company) that non-residents create? Although these entrepreneurs do not pay taxes on their businesses in the US, the country receives income in another way. 🇺🇸
Each year, LLCs must pay fees to the state where they were registered. These fees vary by state, but are typically a few hundred dollars. If we add up the fees of all the LLCs in the US, the result is a substantial source of income for the country. 💵
But not only that, the US also benefits from the information it collects from LLCs. When creating an LLC, owners must provide some personal and financial information, such as the EIN (Employer Identification Number), the ITIN (Individual Taxpayer Identification Number) and the BOIR (Beneficial Ownership Information Report). This data allows the US to monitor international financial activities and strengthen its market intelligence, giving it a competitive advantage in the global economy. 🚀
There are more than 2 million LLCs registered in the U.S. LLCs are very popular among American and foreign entrepreneurs, offering them great flexibility and protection. Additionally, each state has its own rules and advantages for LLCs, so you have to choose carefully where to register them. For example, Delaware is one of the most favorable states for LLCs, as it has very modern and business-friendly legislation, a court specialized in business matters, and very low taxes.
Many entrepreneurs believe that LLCs (Limited Liability Company) in USA They do not need to keep formal accounting. But this is a myth that can cause problems. Although LLCs do not have to file complete financial statements, they do have to report certain accounting information at the federal level. 🇺🇸
The entities that request this information are the IRS (Internal Revenue Service), FinCEN (Financial Crimes Enforcement Network) and the BEA (Bureau of Economic Analysis). These entities require specific data about the LLC's financial condition, such as costs, revenues, expenses, profits, transactions, assets, and liabilities. This information is reported on specific forms, such as 1120, 5472, 114, BE-13 and BOIR. 😓
Therefore, it is important that you do not make the mistake of reporting incorrectly or deducting expenses inappropriately. Some entrepreneurs think that they can declare any expense as deductible, to reduce taxable income and pay less taxes in Spain. But this is not only illegal, it is also risky. Although LLCs do not have to send supporting documents, except in the case of an audit, it is essential that the accounting reflects the financial reality of the company, since this data will influence the calculation of personal income tax and taxes payable in Spain. 💵
To avoid errors in the accounting management of a US LLC, you must know which expenses are deductible and which are not. Deductible expenses are those that are related to the course of business and that are necessary and reasonable. Non-deductible expenses are those that are not related to the business, that are fines or penalties, or that are donations. In another section, we will explain more about deductible and non-deductible expenses for a US LLC. 🙌
Some states that require LLCs to maintain complete accounting and file financial statements? These states are California, New York, Pennsylvania and Utah. If you create an LLC in one of these states, you will need to keep detailed records of your income and expenses, and file a balance sheet and income statement with the state.
If you have one LLC (Limited Liability Company) in USA, you should know that you have to include the profits of your business in the calculation of the Income Tax (Personal Income Tax) in Spain. You must not only declare the amounts you withdraw from the company, but also those you leave accumulated. This way, you will avoid problems with the Tax Agency and comply with your tax obligations. 🇪🇸
But be careful, there is a very common mistake that can make you pay more taxes than you owe. Some entrepreneurs think that they only have to declare and pay taxes on the company's actual withdrawals, that is, on the money they put in their pockets. But this is not the case, at least for LLCs. US tax rules state that LLCs must report all accrued profit at the end of the tax year, regardless of whether they withdraw it or not. 😓
So, How can you reduce taxes legally? The key is in maximize deductible expenses. Deductible expenses are those that are related to the course of business and that are necessary and reasonable. By deducting these expenses, you reduce the tax base, that is, the amount on which taxes are applied. Thus, you pay less taxes and increase your profitability. 💵
But not all expenses are deductible. There are some that you cannot subtract from your income, such as personal expenses, fines or penalties, or donations. If you don't know which expenses you can deduct and which you can't, you can make serious accounting errors, which can lead to fines or penalties. Therefore, it is crucial that you know well what expenses can be deducted, a topic that we will explain in more detail in another section. 🙌
If you have one LLC (Limited Liability Company) in USA, you should know that you can deduct some expenses from your business to pay less taxes. But not all expenses are deductible, only those that are linked to business activity and that are necessary to generate income. 🇺🇸
Deductible expenses are those that you can subtract from your total income to calculate the tax base of the Income Tax (Personal Income Tax) in Spain. Thus, you reduce the amount on which taxes are applied and increase your profitability. 💵
But be careful, you cannot deduct personal expenses, such as clothing, entertainment, vacations, etc. Doing so involves legal risks, such as the loss of limited liability protection in LLCs and banking problems due to misuse of business funds. 😓
Furthermore, including personal expenses as deductibles falsifies the company's financial situation and can be interpreted as tax fraud. Both the IRS (Internal Revenue Service) in the US and the Tax Agency in Spain have mechanisms to detect these practices through banking transactions. Therefore, it is vital to consult accounting and taxation experts to ensure compliance with tax regulations and avoid errors. 📄
To carry out correct tax accounting, you must adopt a proactive and not reactive attitude. That is, you should anticipate possible audits and request invoices in the company's name for legitimate expenses. This way, you will be able to justify your deductions and demonstrate that they are real and reasonable. 🙌
But don't use the company to cover personal expenses or try to pass them off as deductibles. This is illegal and can lead to investigations by the Treasury, which can easily detect the simulation of expenses not related to business activity. If you are caught, you could be fined and have to pay what is due plus interest for late payment. 😱
You should also be careful with some recent practices in Spain, such as the acquisition of NFTs (Non-Fungible Tokens) or the issuance of invoices between companies of the same owner to artificially generate expenses and reduce the tax base. These practices are borderline legal and could constitute tax fraud. It is essential that you correctly record expenses and be aware of the categories that often cause confusion among LLC owners, especially in the United States, to avoid errors and possible legal consequences. 😕
There are some expenses that are deductible in the US but not in Spain, or vice versa. For example, in the US you can deduct the 50% from the cost of meals for business purposes, but in Spain you can only deduct the 10%. Or, in Spain you can deduct the 30% from the cost of vehicles used for economic activity, but in the US you can only deduct the part proportional to commercial use. Therefore, to maintain our health, I recommend that you abide by the deductible expenses of Spain.
If you have one LLC (Limited Liability Company) in USA, you should know that you can deduct some expenses from your business to pay less taxes. But not all expenses are deductible, only those that are linked to the business activity and that are necessary and reasonable.
For Avoiding problems with the Treasury in Spain, we recommend you deduct only the expenses that are also deductible in Spanish territory.
Here is a list of the most common expenses and the conditions for them to be considered deductible:
It is very important to keep receipts for all expenses you deduct and to keep good accounting records in Excel. This way, you will be able to prove the deductible expense in the event of an inspection by the Treasury or the IRS. If you do not have the receipts or do not keep an orderly record of your expenses, you could have problems justifying your deductions and could face fines or penalties. Therefore, we recommend that you keep receipts for all expenses you deduct and that you keep good accounting records in Excel, which will allow you to keep track of your income and expenses.
If you have one LLC (Limited Liability Company) in USA, you should know that legal and transparent accounting must be carried out. But not all business owners do this, and some make the mistake of including non-legitimate expenses in their LLCs. This can cause problems with the IRS (Internal Revenue Service) in the US and with the Tax Agency in Spain. 🇺🇸 🇪🇸
Some business owners try to reduce their taxes by including personal expenses as if they were business expenses by requesting invoices in the name of the LLC. For example, they include gas for a personal trip, clothing, entertainment, etc. But this is illegal, and it is called Tax Simulation. If the expense is not related to the business activity, it is not deductible, regardless of who it is billed to. 😓
Tax Simulation is a risky practice that can lead to penalties. If the IRS or the Tax Agency discovers that you have included non-legitimate expenses in your LLC, they could fine you and even apply retroactive penalties. Therefore, it is crucial that you manage your LLC's accounting legally, without assuming that the absence of immediate audits allows improper practices. 💵
Additionally, you should be careful with some questionable practices that are growing in Spain among LLC owners. Although they may seem beneficial in the short term, these practices can be illegitimate and lead to legal problems. For example, some people acquire NFTs (Non-Fungible Tokens) or issue invoices between companies of the same owner to artificially generate expenses and reduce the tax base. These practices are borderline legal and could constitute tax fraud. 😕
If you have one LLC (Limited Liability Company) in USA and one SL (Limited Company) in Spain, you should know that there is a billing strategy between companies that some owners use to pay less taxes. But this strategy can be illegal and dangerous. 🇺🇸 🇪🇸
The strategy consists of creating an LLC that invoices services to its own SL, with the objective of reducing the profits reported by the SL and thus reducing its tax burden. For example, if you have an LLC that sells products online and an LLC that offers marketing services, you could have the LLC bill the LLC for marketing services, thereby reducing the SL's profit. 💵
But be careful, this strategy is only legal if the invoices reflect real services and are valued according to the market. If the invoices do not correspond to services actually provided or are overvalued, this can be considered tax fraud. Tax fraud is a crime that can lead to fines, penalties and even jail time. 😓
To avoid legal risks, it is crucial that you document and prove the effective provision of services between your LLC and your SL, ensuring that all operations are legitimate and justified before the Tax Agency. You must keep in mind that the Tax Agency can review the invoices and check if the services are real and if the prices are in line with the market. If it detects any irregularity, it can sanction you and demand payment of the evaded taxes. 😱
Did you know that there is a rule that regulates linked operations between companies of the same owner? It is called the arm's length principle, and it establishes that related-party transactions must be carried out at market prices, that is, at the price that would have been agreed between independent parties. This principle seeks to prevent prices from being manipulated to transfer profits from one company to another and avoid paying taxes.
If you have one LLC (Limited Liability Company) in USA and you want to pay less taxes, perhaps you have heard of a strategy with NFTs (Non-Fungible Token) that some LLC owners in Spain are using. But this strategy can be illegal and dangerous. 🇺🇸 🇪🇸
The strategy consists of creating and self-purchasing an NFT to generate accounting losses that reduce taxes. An NFT is a unique digital asset that is based on blockchain technology. It can be a work of art, a tweet, a video, etc. NFTs can be bought and sold with cryptocurrencies, such as ether or bitcoin. 💵
The idea is to transfer funds from the LLC to cryptocurrency and then create an NFT from a personal account. This NFT is sold to the LLC at a high price, and then repurchased at a much lower value, creating an artificial loss on the LLC's books. For example, if you have an LLC with profits of €50,000, you could create a digital art NFT and sell it to your LLC for €50,000. You could then buy back the NFT for 500 EUR. Thus, you would generate a loss of EUR 49,500 for the LLC, and reduce your taxable profits to almost zero. 😓
But be careful, this strategy enters a legally dubious area and requires caution. It could be considered tax fraud, since it involves manipulating prices and losses to avoid paying taxes. Tax fraud is a crime that can lead to fines, penalties and even jail time. 😱
Therefore, we recommend that you consult with tax advisors to avoid possible legal violations. You should keep in mind that both the IRS (Internal Revenue Service) in the US and the Tax Agency in Spain can review NFT operations and check if they are real and if the prices are in line with the market. If they detect any irregularity, they can sanction you and demand payment of the evaded taxes. 📄
If you want to create a LLC (Limited Liability Company) in USA, we offer you a fast and simple service so that you can have your company operational in a short time. We explain the steps we follow to create your LLC in New Mexico, one of the most advantageous states for LLCs.
At the end of this process, your LLC will be operational in a period of 1 to 3 months, depending on the speed of the IRS. This way, you can enjoy the benefits of owning a business in the US, such as limited liability protection, tax flexibility, privacy, and ease of management. 🙌
Is New Mexico one of the most LLC-friendly states, charging no state taxes or annual fees, and offering a high level of confidentiality and protection for owners? Therefore, we recommend that you choose New Mexico as the state to register your LLC, as you will save money and problems.
If you want to create a LLC (Limited Liability Company) in USA, we offer you a comprehensive and economical service so that you can have your company up and running in a short time. We explain the benefits of our service package, which costs $1,499 per year and will be maintained until December 31, 2024 for old customers.
Our service package includes:
This plan is designed to simplify the administration of your LLC by 2024 and ensure tax and legal compliance in the United States. This way, you can enjoy the benefits of owning a business in the US, such as limited liability protection, tax flexibility, privacy, and ease of management. 🙌
The following table compares the costs associated with operating as a freelancer versus maintaining an LLC, highlighting the differences in annual financial burden. Structuring as an LLC can be significantly cheaper, offering savings of 55-85%!
| AUTONOMOUS | COST | COST | LLC |
|---|---|---|---|
| Self-Employed Fee | €80-300/month | 1499 $ / year | Maintenance LLC |
| Monthly Management | 50 - 150 € / month | 50 - 150 € / year | Specific Management |
| VAT | (If there is non-payment, you will advance a 21% to the treasury) | N/A | N/A |
| TOTAL | 130 - 450 € / month 1560 - €5400 / year | 125$/month €1,499 / year | TOTAL |
Another way of looking at it
Within 30 years being Self-Employed VS with LLC.
Creating an LLC in the United States can be as complex as navigating a pirate ship without a compass or map. If you do it on your own, you will lack in-depth knowledge of navigation and maritime laws. Thus, you expose yourself to getting lost or even hitting an iceberg, which would be equivalent to making costly legal or tax errors. 💸
For example, fines for failing to comply with tax obligations, such as filing federal profit and loss forms, can be up to $25,000. It would be as if, when sailing alone, you were caught in an unexpected storm and had to deal with costly damage without a captain to guide you. ⛈️
Although the law allows you to create an LLC on your own, it will always require you to have a Registered Agent and a Business Address in the USA. This agent is your liaison to the mainland, responsible for receiving all official communications, including those from the IRS and legal demands. 📩
Creating an LLC on your own also means spending about four months studying the relevant legal and tax regulations in detail. This time is not only valuable, but crucial, as attempting to navigate these processes without proper preparation can lead to rookie mistakes. These mistakes, no matter how innocent, can carry significant costs. 😱
Additionally, you should keep in mind that although creating the LLC may seem like the “easy” part of the process to you, it is a serious and common mistake to do so without a proper operating agreement. This step, often underestimated, is essential for the future structure and operation of the company. If you can overcome this obstacle without help, you may want to delegate annual maintenance to a professional. This involves managing business addresses in the United States, preparing and filing various legal and tax forms, and meeting all annual regulatory obligations. Taking this approach can reduce risks and improve the performance and legality of the LLC in the long term. 🚀
Would you like to have an expert captain to guide you on your entrepreneurial journey? Do you want to avoid the legal and fiscal pitfalls that can sink your ship? 🚢
Don't hesitate and hire us to help you create and maintain your LLC in the United States! This way you can enjoy the peace of mind of having your company in order and take advantage of the advantages of this type of company! 😊
Of course it's possible! You can even register your business without having to travel, obtain a visa, a social security number (SSN) or an individual taxpayer identification number (ITIN). U.S. regulations do not impose restrictions on business formation for citizens around the world, except in some countries subject to trade sanctions.
If the LLC operates online without a physical presence in the United States, has no employees or dependent agents, and none of its partners are residents or citizens of the United States, it will be classified as Foreign Owned and will not be considered “Engaged in Trade or Business.” in the US” (Engaging in Trade or Business in the United States). By not having the ETBUS designation, it benefits from a territorial exemption in tax terms. In short, if the LLC meets these requirements, it will be exempt from taxes in the United States. Otherwise, you will not enjoy the exemption and must obtain an ITIN number and pay taxes in both the US and your country of tax residence.
Any entrepreneur can benefit in various ways to reduce tax payments at the end of the year. However, digital businesses (such as Amazon FBA, marketing specialists, consultants, coaches, mentors, therapists, etc.) that are also NOT face-to-face, have the potential to completely replace the role of the self-employed in Spain.
The LLC offers the possibility of billing WITHOUT VAT, NO SELF-EMPLOYED FEE, WITHOUT MANAGEMENT, and also allows you to pay less Income Tax at the end of the year by subtracting DEDUCTIBLE EXPENSES to the profits of that fiscal year.
If you have a physical 100% business, such as a restaurant, barbershop or beauty center, the LLC is not the only solution, but a tool that should COMPLEMENT your SL. This will allow you to generate expenses and pay less taxes in Spain at the end of the year.
Typical case: Juan, owner of a laundry, invoices and earns €1,000 net in April from his SL.
Theoretically, Juan would pay a % on the profits (Profit Tax), with a general rate of 25%. This means that €250 goes to the Treasury. Then, you withdraw €750 from your individual, which is again taxed in your personal income tax, say a 20%, resulting in €150 for the Treasury. Although there are other fixed costs (Self-Employed Fee, management), in this case there is not much room for maneuver. The result: Juan receives “net” of less than €600.
With LLC: Juan invoices €1,000 net from his SL, but this time he has an LLC.
It generates an expense of €1,000 from the LLC, labeled as “web management and social networks”. Juan pays €1,000 from the SL to the LLC. In the eyes of the Treasury, the SL has earned €0 that month. You save 25% of taxes for free. It is true that those €1,000 will later be taxed in personal income tax, but a FREE 25% is nothing to sneeze at.
End of story. Things become incredibly simple with an LLC.
Model 720 (Informative): The LLC must inform the State Tax Administration Agency (AEAT) about the assets and rights located abroad that belong to it, provided that the total value exceeds 50,000 euros. This filing is made annually and includes detailed information about bank accounts, securities, insurance, property, and other relevant assets.
Model 347 (Informative): If the LLC has carried out transactions with third parties, whether suppliers or clients, for an amount greater than 3,005.06 euros during the fiscal year, it is required to submit Form 347. This form details the operations carried out, as well as the corresponding quantities.
Related transaction information: In the event that the LLC carries out transactions with related parties, whether they are people or entities with which it maintains a special relationship, it is necessary to maintain documentation that supports said operations and establishes its market value. In the case of an inspection, this information will be required to be provided to the AEAT.
Annually, we will file the following forms with the IRS on your behalf:
Form 1120: This document informs the IRS about the income and expenses incurred by your LLC during the tax year.
Form 5472: This form provides the IRS with information about the type of business and the details that will be filed on Form 1120.
Starting in 2024, it will be mandatory to submit the information form:
Counting from the year you founded the company and every 5 years, you must fill out a BEA report:
Additionally, if you operate or plan to operate in the United States, you may need other forms. Initially, if your activity is focused on Europe, you probably don't need to worry about them:
Form W-7: Used to request the ITIN number from the IRS, similar to the EIN, allowing you to comply with your tax obligations in the country.
Form 1040NR: This form is essential at the end of the tax year to demonstrate to your country of tax residence that you have paid taxes in the United States, which could allow you to deduct them in your country of taxation.
Form 8-BEN: Requested by companies that must pay taxes on behalf of your company in the United States. In this case, the ITIN will be required.
There is no VAT in Europe for most B2B services and for B2C services, the first €10,000 will be exempt: If you sell services to customers in Europe, having an LLC can save you from paying VAT. This is because LLCs are not subject to VAT in Europe for B2B companies, as long as they do not have a permanent establishment in any country in the European Union. Also, if you sell services to B2C, the first €10,000 will be exempt from VAT, thanks to the one-stop shop regime that came into force in 2021.
Before making any expenditure, it is crucial to keep a detailed record of it. You can use a spreadsheet like Excel to keep track efficiently, and in order to make this task easier for you, we will provide you with a template to use.
That said, it is important to note that there are certain expenses that your LLC will be able to deduct, and therefore, you will need to keep the corresponding invoices and transfer records and ensure that they are registered in the name of your LLC:
Common Deductible Expenses:
Automobile Expenses: If the LLC uses vehicles for business purposes, it is possible to deduct automobile-related expenses, such as gasoline, maintenance, and depreciation.
Business Education Costs: Costs associated with continuing education or business-specific training may be deductible.
Commercial Insurance: Insurance premiums for commercial coverage, such as liability insurance, may be deductible.
Charitable Contributions: Donations to charities may be deductible if they meet certain requirements.
Commercial Taxes and Licenses: The fees and licenses required to operate the business are deductible expenses.
Keep in mind that you will not be able to deduct expenses that are directly linked to the country, such as offices or property, as this could create tax complications for your LLC by operating exclusively from your country of residence.
If your LLC makes a clear separation between business and personal accounts, maintains accurate accounting in Excel, meticulously saves all invoices, and has an Operating Agreement, you have no reason to worry. However, if not, there is the possibility that a judge in the United States will 'pierce the corporate veil', putting the legal protection of the LLC at risk. For this reason, it is essential to rigorously comply with all the aspects mentioned above.
It is only required that the company be duly incorporated and current with all its documents, including the EIN number (company tax identification), and the manager's updated passport. It is not necessary to have a Social Security Number or ITIN. We cannot guarantee account opening, as banks must conduct a security check called KYC (Know Your Customer), which is mandatory under federal regulations established in the Patriot Act, before approving a customer. .
In the event that we are unable to register your business within 60 days due to an error on our part, we will refund the full amount you paid, with no questions or explanation required.
At LLC.Devil.Marketing, we are with you every step of the way to open your bank account from the comfort of your home. We do our best to make the process easier for you, but keep in mind that the banks have the final say with their own regulations.
If for some reason things don't go as planned, no problem. We offer you 60 days from when we receive your documents to request a refund, as long as there are no delays from the IRS or the State, as those are out of our control.
At times, the US or Spanish tax authorities may require additional information, which could complicate the process. In those cases, and even if we regret it, we will not be able to make a refund.
We understand a lot about business, but for legal or tax matters, it is best to consult an expert. A lawyer or accountant will be your best ally for binding tax and legal consultations.
Although we are here to support you, remember that we are not lawyers. For those more complex legal dilemmas, we will help you find a qualified professional.
The information provided may change, so we recommend that you do not consider it immutable.
