Open LLC
Open LLC

DEFINITIVE GUIDE for LLCs in SPAIN 🇪🇸

2025 Edition

Digital Entrepreneurs: Navigating the Global Environment with Strategy

In today's ever-changing economic landscape, digital entrepreneurs and service professionals face constant challenges: from managing international operations and finding efficient tax structures to protecting their assets and ensuring the viability of their projects both long and short term. And this is where it's important to be realistic: with 90% of startups failing in %, the priority is to survive and consolidate from day one 💡.

Achieving sustainable growth and sound financial planning in a constantly evolving global context requires strategic vision and a real understanding of the options offered by the international market. Those who understand and apply these tools will have a decisive competitive advantage.

I'll quickly tell you the case of Carlos, web designer freelance.
Just a year ago, Carlos worked exclusively with clients in Spain and faced a business management challenge that consumed his time and energy.

Today, after forming a LLC in the USA Within a fully legal tax framework adapted to its activity, it has managed to better organize its business, expand its international presence, and manage its resources more efficiently, always complying with its tax obligations both in Spain and abroad.

*Each case is unique, and results may vary. The key lies in proper management and a strategic approach that ensures regulatory compliance and project sustainability.

That's why we created this The Ultimate Guide to LLCs in Spain: to help you structure and grow your business, optimize its management and lay the foundations for a solid financial future, always within a legal and secure fiscal framework.

Boost your Global Vision.

Anticipate challenges and build a solid business future with strategies adapted to a constantly evolving environment.

🕒 This guide is not for reading in a hurry..
It will take you between 1 and 2 hours to read it completely, but each block is designed so that you can read it separately and put it into practice instantly.
Move at your own pace and return to each section as needed.

[Last updated: August 9, 2025]

GUIDE CONTENT

What is an LLC?

Let's start by clarifying that LLC means Limited Liability Company, either "Limited Liability Company" in Spanish. They are very popular and flexible legal business structures for many digital business either freelance professionals.

Why? Because they offer the best of both worlds: limited liability (of a corporation) and flexible management and taxation (similar to those of a self-employed person or partnership), but with fewer formalities. 🙌

In many cases, LLCs operate as “pass-through” entities or transparent. This means that the profits they generate at the end of the year are directly attributed to their owner and must be declared in their Income Tax or the personal tax that corresponds to your tax residence. They cannot accumulate indefinitely without paying taxes. Therefore, LLCs are designed to check in, spend and tax in an orderly manner. 💸

Another advantage is that LLCs don't require a board of directors or mandatory annual meetings, which greatly simplifies their management. This is especially attractive for small businesses or solopreneurs. 👍

The call “pass-through taxation” implies that the profits and losses of the LLC are carried forward to the personal tax return of the member(s), avoiding double taxation that does affect corporations. 🙌

Limited Liability Company

(Limited Liability Company) Only exists in the United States

The double taxation It occurs when a company pays taxes on its profits in the country where it is registered and, subsequently, its owners return to paying taxes in their country of tax residence for the profits. dividends they receive. This system can generate a high tax burden for many entrepreneurs. In certain circumstances, LLC can help avoid this problem, since, if they are taxed as “pass-through” entities, the profits are attributed directly to the owner and are taxed only once, on their personal tax return, always in accordance with the tax regulations of their country of residence.

What does it mean for an LLC to be Pass-through?

Passthrough Entity

Profits flow to you automatically at the end of the tax year (The LLC will not “store” money)

When a LLC is pass-through It means that the company does not pay Corporate Tax for its benefits: the result it is attributed to you and you pay taxes on it in your personal income tax. For a tax resident in Spain, this happens via the Income Attribution Regime (RAR): The Treasury “sees” the LLC as transparent and makes you integrate net profit (income − deductible expenses) in the same year in which it is generated, although do not withdraw the money in the LLC account. They are not “dividends,” they are not “payroll”: it is attributable profit 💡.

📍 Where you pay taxes and why:
  • Spain (IRPF): You pay taxes via RAR, applying the IRPF sections and rules that correspond to your case.
  • USA: there is only federal tax if it exists ECI/ETBUS. Yeah No there is, No you pay tax there, but yes you report (5472 + 1120 pro-forma).
🛠 How it integrates into your personal income tax (practical tips):
  • Nature of income: the RAR maintains the original nature.
    • If you sell services, information products or consulting → income from foreign economic activities (foreign attributed income) → general base.
    • If the LLC obtains interest, royalties or dividends → returns on movable capital → savings base.
  • Conversion to euros: use the official rate of the accrual day or, if you document it well, the average annual rate of the Bank of Spain.
  • Key documentation: Bank statements, invoices issued, contracts, calculation of net profit and its conversion to euros, clearly matching the 5472/1120 pro forma.
⚠️ Typical errors that cause problems:
  • Believing that “if I don’t withdraw the money, it won’t be taxed” → fake in RAR.
  • Declare it as a “dividend” in your personal income tax return → it is not.
  • Including personal expenses in the LLC → you lose deductibility and are exposed to tax adjustments.

In practice, the pass-through converts the LLC into a fiscal channelWhatever comes into the company, the Treasury considers yours that same year. Your role is to document every figure and maintain impeccable order.

A quick example:
Imagine that you LLC gets €50,000 net profit. Being an entity "pass-through", those €50,000 are added directly to your personal tax base in Spain. This means that you will have to declare the full amount on your Income Tax as foreign attributable income, applying the section that corresponds to you according to the current Treasury scale for that exercise.

Practical example: the Pass-through and the Income Attribution Regime (RAR)

💼 OPERATING CASH FLOW | TAX OBLIGATIONS (SPAIN)

👥 Clients
Services ⬅️ 🛠️
Payments ➡️ 💳
🏢 LLC in the USA
Deductible expenses ⬅️ 🧾
Transfers ➡️ 🔁
Suppliers
Bank LLC (USA)
📅 April–June
(following fiscal year)
🏦 Personal bank
Distributed and undistributed profits
📝 Form 100 – Personal Income Tax (includes RAR)
19–47%

Imagine that this year you LLC bill 60.000 € and has 15.000 € in deductible expenses. The result is €45,000 net profit that, being an entity pass-through, are directly attributed to you as the sole member.

This means that you must declare those 45.000 € in Spain, in your Income Tax, within the section "Income Attribution Regime«. The LLC, by itself, does not pay taxes in the US.; only submits its reporting obligations through the Form 5472 and a 1120 pro forma.

In practice, your LLC:

  • NO pays taxes in the US (files informational reports only).
  • YEAH You pay taxes on these profits in Spain, directly in your personal income tax as income from foreign economic activities, applying the corresponding sections according to the current scale.

⚠️ Important note: Even if you don't withdraw money from the LLC, the profits attributed to it each year must still be reported.

Checklist to comply without errors:

  • ✅ Keep all receipts for your deductible expenses.
  • ✅ Prepare and present the Form 5472 (informational) in the US along with the 1120 pro forma.
  • ✅ Declare your profits in the Spanish personal income tax (Model 100).
  • ✅ Lean on a specialized manager to make sure everything is correct.

To calculate the Personal income tax to pay if you have an LLC, you must apply the brackets that correspond to your income level. Keep in mind that these brackets vary slightly depending on the Autonomous Community where you live, so it's always a good idea to check the regulations specific to your region. 📋

Let's see an example using the Personal Income Tax brackets for 2025 in Catalonia. Suppose that you LLC bill 50.000 € and you have 10.000 € in deductible expenses. That leaves a net profit of 40.000 €, on which you will have to pay tax. Next, we'll use the table with the applicable tax brackets to calculate the corresponding tax:

🧾 Personal Income Tax Sections 2025 · Spain

Stretch State type Autonomous type Total type Fee in section Accumulated fee Marginal applies
Average rate on income — — —

⚠️ Navarre and the Basque Country have their own special tax regime (they do not use this scale).

No personal/family minimums or other reductions. It's all piecemeal.

Another example: of the total IRPF to be paid on 40.000 € general base (without minimums or reductions), applying the 2025 IRPF sections in Catalonia:

  • First stretch: Up to €12,450, a 20,0%.
    Calculation: 12,450 × 20.0% = 2.490,00 €.
  • Second section: Between €12,450 and €17,707, a 24,0%.
    Difference: 5,257 € × 24.0% = 1.261,68 €.
  • Third section: From €17,707 to €21,000, a tax is applied 26,0%.
    Difference: 3,293 € × 26.0% = 856,18 €.
  • Fourth section: From €21,000 to €33,007, a 30,0%.
    Difference: 12,007 € × 30.0% = 3.602,10 €.
  • Fifth section: From €33,007 to €40,000, a tax is applied 33,8%.
    Difference: 6,993 € × 33.8% = 2.363,63 €.

Total IRPF: 2.490,00 € + 1.261,68 € + 856,18 € + 3.602,10 € + 2.363,63 € = 10.573,59 €.
Average type: 10.573,59 € / 40.000 € = 26,4 %.
Applicable marginal rate: 33,8 %.

Do you think taxes in Spain are being used fairly? Click here and draw your own conclusions.

Characteristics of an LLC Disregarded Single-Member

When a LLC has a sole proprietor and has not made an election to be taxed as a corporation, the IRS may classify it as a Disregarded Entity. This means that for U.S. federal tax purposes, the LLC is “ignored” and everything is attributed directly to its owner.

For a tax resident owner in Spain, this implies:

  • USA: if it does not exist ECI/ETBUS, you do not pay federal tax, but you do comply with the reporting obligations: Form 5472 next to a 1120 pro forma every year.
  • Spain: the profits of the LLC are considered foreign attributable income under the RAR and are taxed in your personal income tax, with the corresponding nature (general base or savings base, depending on the type of income).

⚠ Key point: that the IRS “ignores” it for tax purposes does not eliminate the legal protection of the LLC. Your personal assets remain separate from those of the company, as long as you maintain corporate formalities:

  • Separate bank account.
  • Contracts and invoices issued in the name of the LLC.
  • Organized accounting and internal records.

Common mistake: Think of “disregarded” as nonexistent. It may be fiscally invisible in the US, but legally, the LLC remains a legal entity with its own EIN and the ability to sign contracts, open accounts, hire staff in other countries, etc.

In practice, this classification gives you the best of both worlds: tax simplicity in the US if there is no business connection there, and a legal shield that protects your personal assets. 🛡️.

Main characteristics of a Disregarded Single-Member LLC:

  • Pass-through Taxation:
    The profits or losses of the LLC are not taxed at the corporate level in the US, but are passed directly to the owner's personal tax return. For tax residents in Spain, they are taxed via the Spanish tax return. Income Attribution Regime (RAR), which avoids double corporate and personal taxation when legal conditions are met. 💸
  • Limited Liability:
    It protects the owner's personal assets from debts, obligations, or liabilities arising from the LLC's activities, as long as the formal separation between personal and business finances is maintained. 😊
  • Less corporate formalities:
    Unlike a traditional corporation, it doesn't require mandatory annual meetings, detailed minutes, or strict formal requirements, which simplifies its management.
  • Customizable operating agreements:
    The owner can freely define the internal rules of operation and management through a Agreement tailored to your specific needs. 🙌
  • Without permanent establishment in Spain:
    To maintain its international tax advantages, the LLC must not have offices, real estate, or directly hired salaried employees in Spain. However, it may collaborate with self-employed professionals resident in Spain, provided they do not act as dependent agents who generate income. Permanent Establishment. 🤔

No permanent establishment

No offices/properties or salaried workers in the name of the LLC in Spain

Limitations to take into account:

Despite its advantages, this structure has certain restrictions:

  • It does not allow partners or shareholders, limiting possible avenues for financing or growth.

  • You must comply with tax obligations in both the US and Spain, which can add some administrative complexity.

Therefore, before choosing a Disregarded Single-Member LLC, it is important to carefully evaluate whether this structure fits your business and personal goals.

Limited Liability: Your Legal Shield in an LLC

Limited Liability

Protection of your personal assets

This type of limited liability means that the owner of the LLC and his personal assets They are protected from any financial or legal issues that may arise. The obligations fall on the company itself, since the LLC is a legal person, similar to a Limited Company (SL) in Spain.

In practice, the risk is limited to the company assets and does not extend to the personal assets of its owners. This contrasts with the self-employed, where the entrepreneur and business are legally the same, and personal assets can be affected by debts or obligations of the business.

⚠ Important: if the owner offers personal guarantees for an LLC loan, it could be personally responsible of that debt. 😮

As you can see, the limited liability It is one of the great advantages of the LLC, but it is not absoluteThere are circumstances in which you could lose the protection of your personal assets and be liable for damages from your own assets.

Therefore, it is essential to manage the LLC prudently and always comply with current regulations. Avoid any illegal, fraudulent, or negligent activity that could compromise your legal security and that of your assets.

The myth of emptying the accounts: why it's not the solution

One of the most widespread myths is to think that if at the end of the year you leave the LLC bank account at zero, you avoid paying taxes or raising suspicions. This is not the case. Taxation is not based on how much money is left on December 31, but on everything that has happened during the year: invoicing, expenses and how it is documented.

❌ Nothing could be further from the truth.

Both the Treasury and the IRS are analyzing the flow: income, expenses, transaction consistency, and traceability. If you artificially "empty" the account but can't justify where the money went, the problem won't be the balance... but the lack of supporting documentation.

What you should do to be safe:

  • Reconcile income and expenses: that bank statements match the invoices issued and received.
  • Keep only actual deductible expenses: always linked to the activity (software, advertising, freelancers, hosting, management, specific training...).
  • Avoid personal expenses: Do not use the LLC account to pay rent, electricity, or Wi-Fi for your home in Spain.
  • Comply with mandatory reportingIn the US, file a pro forma return of 5472 + 1120; in Spain, declare the profit on your personal income tax return via the RAR, even if you don't withdraw the money.

💡 Having a balance in your LLC account is not a problem If you can justify each transaction. The real risk arises when there are transactions without supporting documentation or invoices that don't match the declared activity.

bnet profit = Yoincome – Gastos deductibles*

*Deductible expenses: “Any expense related to your economic activity”

The rule is simple: You can only deduct expenses that are directly related to the activity of your LLC.

📌 Yes you can deduct:

  • Software, online tools, and subscriptions needed for your business
  • Digital advertising and marketing
  • Contracted services (self-employed, freelancers, etc.)
  • Tax, accounting, or legal advice related to LLCs
  • Hosting, domains and web maintenance
  • Specific training for your professional activity

🚫 You can't deduce:

  • Personal purchases (neither Mercadona nor Tinder Gold) 😅)
  • Housing, electricity, or Wi-Fi expenses in your name
  • Offices or premises in Spain: this generates permanent establishment (PE), and there the Treasury does get serious
  • Salaries or payrolls in Spain: the same, EP insured

💡 AdviceIf you're unsure whether an expense is deductible, ask yourself, "Is this expense essential for the LLC to operate and generate income?" If the answer is no or ambiguous, it's best not to deduct it.

Why might it be worth leaving net profit at 0?
  • Impact on Spanish personal income tax:
    If the net profit is zero, there is no income attributable to the owner, and therefore There is nothing to declare or pay taxes on in the Personal Income Tax (IRPF).This translates into zero euros to be paid in corporate profits. 💸
  • Less tax obligations and bureaucracy:
    An LLC with no profits or real activity may not even be reportable on certain IRS reporting forms (such as Form 720), which reduces paperwork and exposure.
  • It does not involve fraud or evasion:
    As long as all movements are well documented and justified, leave the net profit at zero. it is perfectly legalThe important thing is that the expenses are real, necessary, and justified.

Why might it be worth leaving net profit at 0?

  • Impact on Spanish personal income tax:
    If the net profit is zero, there is no income attributable to the owner, and therefore There is nothing to declare or pay taxes on in the Personal Income Tax (IRPF).This translates into zero euros to be paid in corporate profits. 💸
  • Less tax obligations and bureaucracy:
    An LLC with no profits and no real activity may not even be reportable on certain tax forms (such as Form 720), which reduces paperwork and exposure. 📋
  • It does not involve fraud or evasion:
    As long as all movements are well documented and justified, leave the net profit at zero. it is perfectly legalThe important thing is that the expenses are real, necessary, and justified.

🧾 Practical example:

Imagine that your LLC has invoiced 30.000 $ in 2025. During that same year, you have had the following expenses:

  • 10,000 $ in outsourced services
  • 8,000 $ in software, tools, and subscriptions
  • 7,000 $ in advertising campaigns
  • 5,000 $ in legal advice and corporate maintenance

Total expenses: 30.000 $
Net profit: 0 $

Result: You don't pay any income tax, since no taxable income has been generated. But be careful: you should keep invoices, receipts, and contracts in case the Treasury asks you to justify these expenses.

Therefore, you don't need to leave the account at zero: you need that everything that has happened to her is well justifiedIf the numbers add up and the documentation supports each transaction, the Treasury has no way in. 📚.

Who is eligible to open an LLC?

If you are an entrepreneur in Spain (or live outside Europe) and you work in the digital world with clients spread all over the planet, there is a legal structure that can become your best ally: the LLC. 🙌

The LLC is a limited liability company created in the United States that allows you Optimize your management, pay less taxes legally, and protect your personal assets.All in a flexible format designed for global businesses like yours.

Now, not everyone is a good fit for an LLC. But if you fit any of these profiles, you're probably losing money and peace of mind by not having one:

  • Digital Services: You offer technological solutions, SaaS, web development, apps or any online platform.
  • Content Creators: You generate videos, podcasts, blogs or any type of monetizable content on a global scale.
  • E-commerce and Dropshipping: You sell products online without having to store physical stock.
  • Digital Freelance: You work 100% online for international clients as a designer, programmer, copywriter, translator, etc.
  • Marketeers and Consultants: You help companies grow with digital strategies or specialized advice.
  • Coaches, Mentors and Therapists: You offer personal development, wellness, or online training sessions or programs.

💡 If you recognize yourself on this list, an LLC isn't just an option... it's the missing piece to scale your business without borders.

Basically this

If this is your routine, the LLC is your best friend.

There are certain profiles of digital entrepreneurs that can make the most of a LLC in the USABut beware: It is not a universal solution and it is not always the best option for everyone.

Before taking the plunge, it's key to analyze your specific case: your business, the type of clients you have, where they're located, and what your medium- and long-term goals are. You should also be well-versed in your tax, legal and administrative obligations both in the United States and in Spain.

Therefore, my recommendation is clear: get advice before decidingWe can help you assess the advantages and disadvantages of your situation, and help you create and maintain your LLC in a way that is 100% legal, secure, and tailored to your business.

💡 A good structure can be the difference between a business that grows unchecked and one that drowns in unnecessary taxes and paperwork.

Is your business compatible with an LLC?

An LLC is not for everyone

If you are on this list... we are so sorry :(

Although LLCs offer a structure flexible and very attractive for the digital entrepreneur, its real convenience depends on both the nature of your activity as of you tax residenceTo operate with complete legal certainty, it's key to understand which business models are truly compatible with an LLC under the legal framework of the U.S. and your country of residence.

In the case of Spain and the United States, Only certain types of activities take full advantage of this vehicle's potential.The golden rule is twofold: avoid generating permanent establishment in Spain and not fall into the category of ETBUS (Engaged in Trade or Business in the US) on US territory.

Compatibilidad LLC — UI limpia

🧾 Activities and compatibility with LLCs (without EP in Spain)

Type of business / activity Compatible with an LLC? Main reason
🧠
Quick Notes: “Yes” assumes 100% online operation, without an office, employees or dependent agents in Spain, and services/sales provided from outside Spain.
“EP” = permanent establishment (if it exists in Spain ⇒ the LLC is taxed here). “Depends” requires a detailed analysis of the case (registration, habitual status, material resources, etc.).

🛠 What alternative do you have?

If you find yourself in any of these cases, an LLC on its own It is not the definitive solutionHowever, you can opt for combined strategies:

  • Using an SL in Spain to manage physical or in-person activities.
  • Supplement it with an LLC for digital areas, marketing, international expansion or projects without a physical presence in Spain.

This way, you separate risks, optimize taxation, and comply with regulations in both countries. 💡

ETBUS: What it is and when it applies to your LLC

The term ETBUS (ANDngaged in Trade or business in the ORnited Yestates) is the criteria the IRS uses to decide whether your activity is sufficiently connected to the U.S. that you have to pay federal taxes there. It doesn't just depend on where you are physically, but on whether your business has presence or means in US territory.

Even if your LLC is a disregarded entity (taxes in your name, not in the company's name), can be considered ETBUS if it meets certain criteria, which would generate federal tax obligations.

📌 When is an LLC considered an ETBUS?
It is analyzed on a case-by-case basis, but the most common scenarios are:

  1. Physical presence in the US
    Office, employees, warehouses, representatives who negotiate or close contracts, etc.
    👉 Not typically applicable to 100 % digital structures without media in the US.
  2. Income from US sources
    E.g.: rents, interest from American banks, royalties…
    👉 If you sell services from outside to clients in the US, there are nuances: it is not always “effectively connected”, but If the activity is regular, directed to the US and you have many clients there, the IRS could consider you an ETBUS.
  3. Significant economic activity within the U.S.
    There is no official threshold like “$1 M”. It matters if you sell in a continues and substantial to the American market.
    👉 With occasional sales or small revenue in the US, it's unlikely you'll be classified as an ETBUS; if you're planning to scale up there, consult with a tax professional first.

💡 Tip: If you're in the right column, stay that way by avoiding physical presence and specifically US-based sources of income.

¿Eres ETBUS?

🇺🇸 Are you ETBUS? (Engaged in Trade or Business in the US)

ETBUS = have business activity actually carried out in the USA.

🚫 I am ETBUS
  • Physical presence in the US (office, employees, warehouse, agents who close contracts).
  • Income from American source (rent, royalties, interest, etc.).
  • Continuous and significant activity in the American market .
  • Required to file federal return; possible Form 1120-F.
  • You pay federal tax for income connected to the US.
✅ I'm not ETBUS
  • You have no physical presence or dependent agents to close contracts in the US.
  • Your income comes mainly from customers outside the US
  • Occasional sales or billing reduced In U.S.A. .
  • You only complete informational forms (e.g., 5472 with LLC disregarded).
  • No You pay federal tax in the US for your activity (since there is no ETBUS).
⚠️ Guiding criteria (not law). Borderline cases: fulfillment in the US, local subcontracted personnel, signatories with power of attorney, etc. If in doubt, document and review each case individually.

💡 What if I'm ETBUS?

  • You must present the US tax return
  • You will pay federal taxes on US-connected income
  • You might even have to file the Form 1120-F (even if you are disregarded).

🎯 So, does ETBUS affect me?
👉 If you sell digital services from outside the US, you are most likely NOT ETBUS.
👉 As long as you have no physical presence or income from specific US sources, you will not have tax obligations there beyond information forms (such as the 5472).

Note: ETBUS isn't the only criterion that can affect your US taxation. Factors such as the type of entity, the tax treaty between your country and the US, and applicable deductions or credits also count. Before taking the plunge, speak with a tax advisor familiar with the US market. 😊

Reasons to create an LLC

Create an LLC (Limited Liability Company) can be a good option for entrepreneurs and digital companies looking to optimize their structure for global expansion and efficiency. Below, we explore the key reasons to consider this legal form: 😍

  • Protection of Personal AssetsBy creating an LLC, you separate your personal assets from the potential debts and lawsuits your business may incur. This way, you avoid putting your assets at risk if your company encounters legal or financial problems. 🛡️
  • Global Tax EfficiencyLLCs can offer an efficient tax framework for non-US residents, allowing profits to be taxed in the owner's jurisdiction of residence. This facilitates the management of international tax obligations, avoiding double taxation at the corporate level. 💸
  • Ease of Management: Creating and managing an LLC is very simple and fastYou don't need to keep complex accounting records or file annual reports. With a simple Excel spreadsheet, you can keep track of your income and expenses. 📊
  • Affordable CostsThe costs of establishing and maintaining an LLC are comparatively efficient, allowing for greater allocation of resources to growing your business. 💵
  • Flexibility in Business Expenses: LLCs allow you to have a greater freedom when managing and deducting your business expenses. You can deduct a wide variety of expenses, such as travel, accommodation, supplies, software, etc., as long as they're related to your business. 🧳
  • ConfidentialitySome US states offer the option of greater privacy in LLC public records. This can be useful for protecting the business's identity and strategy, while still meeting the tax transparency obligations of the relevant authorities. 🕵️‍♂️
  • Access to Financial Markets and Services in the US: By having an LLC, you can access business and financial opportunities in the US that would otherwise be more difficult or expensive. For example, you can use payment gateway services like Stripe, which allow you to collect payments from your customers easily and securely. You can also open a bank account in the US, which can make international transactions easier. 💳
  • Benefits in E-commerce: If your business is online sales, having an LLC can bring you Additional benefitsFor example, you can obtain certifications that increase your customers' trust, such as the Online Trust Seal or the SSL certificate. You can also take advantage of the program Fulfillment by Amazon (FBA) to store and ship your products from Amazon warehouses in the U.S. 📦
  • Visa Opportunities: If you plan to travel or reside in the US, having an LLC can make it easier for you to apply for certain types of visas, such as the E-2 visa for foreign investors or the L-1 visa for transferring employees to a subsidiary in the U.S. 🛫
  • VAT Treatment in International Operations: VAT treatment for a US LLC in Europe varies depending on the type of customer and the nature of the service.
    • For B2B services, reverse charge usually applies.
    • For some B2C services, the rule is different and stricter: being an entity not established in the EU, The LLC cannot qualify for the €10,000 threshold and must charge the VAT corresponding to the customer's country from the first sale.

    To simplify the declaration and payment of all the collected VAT, the one-stop shop system is used (Non-Union OSS). 🇪🇺

  • Structure for Quotation Optimization:
    • If you invoice as a natural person (your name/NIF), the habitual residence criteria do apply and you should pay contributions as a self-employed person if you exceed the legal limits.
    • If you invoice through your LLC, and all operations and billing are in the name of the company, in principle NO you are required to register as self-employed.
    • They could only require it from you if the Treasury proves that you are the one carrying out the activity from Spain using the LLC as a front.
    • Keys to avoiding problems: contracts in the name of the LLC, actual management outside, and documentation that supports that you are not the one providing the service.

In any case, it is your responsibility to inform yourself and declare your income and pay the corresponding taxes in your country of residence. LLCs are based on common law and may have tax and legal implications that vary by jurisdiction. Before forming an LLC, be fully informed about all the implications and consult with a qualified international tax expert.

European VAT on international transactions with LLCs

We arrived at the black beast to operate in Europe with an LLC: the VATWith 27 countries, each with their own rules, this can feel like a real bureaucratic labyrinth.

The goal of this section is to give you a clear and straightforward map. 🗺️

Before we dive into the comparison table, it is crucial that you know a "shortcut" that can change the rules of the game: the
Merchant of Record (MoR).

Imagine that instead of your LLC selling directly to the end customer, you sell to a intelligent intermediary (as Hotmart, Paddle either Lemon Squeezy), and it is this intermediary who becomes the legal seller.

In practice, this means that The whole "brown" VAT issue becomes your problem, not yours. With a MoR, the platform takes care of everything:

  • ✅ Calculate and charge the correct VAT depending on the country of each buyer.
  • ✅ Submit tax returns and pay VAT to the 27 EU tax authorities.
  • ✅ He transfers the net money to you, discounting its commission (normally a 5-10%).

This solution is perfect for those who sell B2C digital products in Europe and wants maximum simplicity.
In the following table, you'll see this turnkey strategy versus direct management head-to-head, so you can choose the path that best suits your business. 🚀

Tabla IVA – UI

🧾 VAT for your LLC

If your LLC sells… Concrete example Still… What about VAT? How do I manage it? / Complexity
💿 Product 100% digital and automated Pre-recorded course, ebook, template, SaaS 👤 B2C ⚠️ It carries VAT in the client country
From the first euro (OSS)		 Register LLC in OSS, use gateway (Stripe Tax) and declare quarterly.
Complexity: Medium
🎬 Digital product via MoR Infoproducts sold by Lemon Squeezy, Paddle, Hotmart 👤 B2C ✅ VAT managed by MoR You receive net. You don't need OSS.
Complexity: Low
🧑‍💻 100% personal service 1-on-1 consulting, coaching, design 👤 B2C ✅ Does not carry European VAT
"Not subject" sale		 Invoice without VAT. Do not declare to OSS.
Complexity: Low
🏢 Any product/service to a company SaaS license, consulting, training 🏢 B2B ✅ VAT free
Reverse Charge		 Validate VAT Number before charging. Indicate "Reverse Charge".
Complexity: Low
🎤 Hybrid video + live Q&A (Law 2025) Course with recordings + live sessions 👤 B2C ⚠️ Now it does have VAT
New law 2025		 Collect VAT and manage it with OSS or MoR.
Complexity: Medium-High

📜 Exception to the new VAT law 2025 (Directive 2022/542):

The exception is not in the format, but in the nature and fundamental value of service.
The key is whether you can make a strong case that what you are selling It is NOT a course with support, but a mentoring or personal consulting service which includes support material.

Think of two models:

  • 💻 Standard Hybrid Model (VAT included):
    You sell access to a video library, and as a bonus, there's a live group Q&A session every week.
    The main value is the videos; the live portion is a non-personalized add-on.
    This falls squarely within the new law..

  • 🎯 The Exception: Asynchronous Personalized Mentoring Service (arguable as NOT subject to European VAT)
    Imagine you sell a Acceleration Program for Designers with this structure:
    1. The student accesses support videos to understand the concepts.
    2. Each week, the student sends you his or her work (design, proposal, etc.).
    3. You, personally, review your specific job and you return a personalized 15-minute video or a detailed written report with corrections and suggestions.

    📌 Why might this fit into the exception?

    • It is not a “Virtual Event”: There are no group live sessions; it's an individual and asynchronous service. The new 2025 law doesn't seem designed for this scenario.
    • The Human Factor is Dominant: Human intervention isn't "minimal"—it's the 80% of value! The client doesn't pay for the videos, but rather for your time and analysis applied to their case.
    • It is a Professional Service: It is closer to personalized consulting or correction than to a standard digital product. Therefore, the general rule (taxed where the provider is located, in the US) and not the special rule for TBE services.

⚠️ Warning:

This isn't a strategy for everyone. If you want it to be defensible under inspection, you must comply. these three points to the letter:

  1. 💰 The price should reflect this:
    Such a service must be significantly more expensive than a simple recorded course. The main value lies in your time and your personalized knowledge, not in the videos.
  2. 🎯 Marketing must be consistent:
    You're not selling a "course." You're selling a mentoring program, coaching positions with correction or a project review serviceAll your communication should revolve around support and individual results.
  3. 📂 You must be able to prove it:
    Keep evidence (emails, correction videos, commented documents, etc.) that demonstrate that you have completed personalized work for each student. Remember: burden of proof falls on you.

⚠️ Does the client pay me for a product that I could sell 1,000 times as is (a course, an ebook) or do they pay me for my time and my brain applied to your particular case?

💡 The first option carries VAT. The second No (considered a personalized professional service).

Anonymous LLC: What You Need to Know

A Anonymous LLC It is a company registered in states such as New Mexico, Delaware or Wyoming, where the owner's name does not appear in public records. This added privacy can be very useful in sectors such as cryptocurrencies, cybersecurity either trademark protection, where strategic anonymity is an added asset.

But beware: Registration anonymity does not exempt you from your tax obligations. As a resident of Spain. This is where many people get confused... 😬

Which YEAH makes anonymity:

  • Hide your name in public databases in the state where the LLC is registered.
  • It makes casual searches or unofficial traces of ownership difficult.
  • It can give you an advantage in markets where privacy is a differentiating value.

Which NO makes anonymity (and here comes the important part):

❌ It does not eliminate your obligation to report LLC income. in personal income tax if you are a Spanish tax resident.

❌ It does not allow you to deduct personal expenses as if they were business (Mercadona, rentals, vacations… you know 😉).

❌ It does not protect you from the Treasury If you make unjustified transactions between the LLC account and your personal accounts in Spain.

So, is it good for anything?

Yeah, It serves to protect your privacy, not to hide income. A well-used anonymous LLC:

  • Allows you to operate discreetly.
  • Protect your strategy and your business image.
  • Strengthen your positioning in niches where confidentiality matters.

Of course, as long as correctly declare your income and comply with your tax obligations as a Spanish taxpayer.

🪪 Anonymous LLC: Benefits vs. Risks

✅ Benefits ⚠️ Risks / Limits
Public privacy
Your name does not appear in the state registry.
 It is not total opacity
Banks/KYC and authorities can identify the account holder if applicable.
Strategic protection
Less exposure to competitors and onlookers.
 Compliance intact
You must declare income and comply with regulations in Spain (IRPF, RAR, etc.).
Brand/positioning
Reinforces a professional image where privacy matters.
 Documentary support
Unjustified transactions between personal/LLC accounts are a clear risk.
Flexible operation
Privacy-friendly states and registered agent as a contact shield.
 Banking/fintech
Increased KYC/AML scrutiny and real-world activity testing for account opening.
Communicative simplicity
Separate person/company on websites, proposals and contracts.
 False security
Anonymity doesn't save you if you default or deduct personal expenses.

ℹ️ Eye: “Anonymous” ≠ “invisible.” It’s about public privacy and internal order, not about hiding income or circumventing KYC.

💡 Tip: use privacy as strategic tool, not as a costume. Prioritize the documentary order and the compliance; this way you'll have privacy without surprises from the Treasury.

⚠ Although there is currently no requirement to report to FinCEN if you are a nonresident and your LLC doesn't have an ECI/ETBUS, laws change. Stay up to date to avoid surprises.

Anonymity can be a commercial shield, but it is not a tax shield. Complying with the Treasury is not optional, but how you structure your business is. The key is to optimize without crossing the line. 😊

Consequences of failing to comply with your LLC

⚠️ It is critical to understand the responsibilities of operating an LLC. Lack of awareness or failure to comply with regulations can lead to significant risks. Our goal is to help you understand why you should always act within the legal framework to prevent unnecessary consequences.

Key responsibilities to keep in mind:

  • Tax compliance in both countries: US reports (e.g., 5472 + 1120 pro forma if applicable) and Spanish declaration (IRPF via RAR, where applicable).
  • Real patrimonial separation: separate bank accounts, contracts in the name of the LLC and internal records organized.
  • Documentary support: invoices, contracts, bank reconciliations and evidence that proves each transaction.
  • Prevention of permanent establishment: Avoid offices, employees or dependent agents in Spain if your model does not include them.
  • VAT/international sales: Check VAT/OSS rules in the EU or use a Merchant of Record when convenient.

💡 Conclusion: The LLC is a powerful tool if managed rigorously. With good planning and compliance, you will have protection, order and tranquillity.

⚠️ Most common mistakes and risks

  • 💸 Penalties for Failure to Declaration: Failure to declare your tax obligations in your country of residence can result in significant fines and surcharges.
  • 🔍 Tax Inspections: Tax authorities have international agreements and tools to detect inconsistencies. If there are discrepancies between your economic activity and your declared situation, they may open an investigation.
  • 📑 Income Attribution: If your LLC is considered a non-material or non-real-management vehicle in your country of residence, its income may be directly attributed to you, with applicable taxation and penalties.
  • 🛑 Loss of Protection: Mixing personal and business assets or violating regulations can cause you to lose the LLC's limited liability.
  • ⚖️ Criminal Risk: In cases of high-value tax fraud where proven intent is involved, the consequences may include prison sentences.

✅ Keys to a smooth completion

  • 📂 Transparency: Keep clear records and document all your financial transactions.
  • 🔗 Coherence: Align your LLC's activity and structure with your tax residence and applicable laws.
  • 🧠 Expert Advice: International taxation is complex; having a qualified professional ensures that your strategy is legal and appropriate for your situation.

💡 Remember: Meeting your tax obligations is not optional; it is the basis for maintaining your legal security and the sustainability of your global business.

Requirements to open an LLC

Starting a business in the US is much more simple and digitized than in many other countries, where procedures are usually in-person and more complex. 🙌
So cheer up! These requirements are already included in our service. If you meet them, the process will be fast and 100% online:

  • 🌎 No US Residence: LLC members must not be residents of the United States.
  • 👥 Employees: The owner cannot have salaried employees (yes, freelancers) in Spain or the US if he wants to avoid certain taxes and the risk of creating a permanent establishment.
  • 🛂 Valid passport: Required to open an online bank account.
  • 🏷️ Company Name: Must be unique to your LLC.
  • 📬 Registered Agent: A registered agent who receives official notifications from the state. (Included in our service).
  • 🏢 Virtual Office: US mailing address for correspondence. (Including).
  • 🧑‍💼 LLC Management: Appoint you as Manager or administrator.
  • 📄 Articles of Organization: Official document certifying the registration of your LLC.
  • 📝 Operating Agreement: Internal document detailing ownership and operating rules.
💡 Note: Requirements may vary depending on the registration status.
Some states offer greater tax protection or advantages than others.
Before choosing, compare the options carefully and select the one that best suits your business.

Why open it in the United States?

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 was born in the USA to provide a legal solution to the self-employed with moderate income.
Over time, it has evolved to become a popular choice even for companies that handle million dollar transactions.
In addition, it allows the non-resident foreigners can create and manage a business in the U.S. without having to travel to the country. 😎

💡 Important: The U.S. isn't the only option. Depending on your goals, other countries also offer opportunities for starting a business from abroad.
  • 🇮🇪 Ireland:
    • 📉 Corporate tax of the 12,5%, one of the lowest in the EU.
    • 🌍 Privileged access to the European market (500+ million consumers).
    • 🚀 Dynamic economy with sectors such as technology, pharmaceuticals and finance.
    • 🏢 Legal form: LTD (Limited Company), equivalent to the LLC, but requires at least one director resident in the EU.
  • 🇪🇪 Estonia:
    • 💻 The most digitalized country in the world, with 100% online administration.
    • 🆔 Possibility of obtaining the e-residency to create and manage your business from anywhere.
    • 🏢 Legal form: OÜ (Osaühing), equivalent to the LLC, with the tax advantage of deferring taxes until profits are distributed.

Other countries such as Singapore, Hong Kong and Cyprus also offer interesting alternatives.
Before deciding, compare the pros and cons and consult with an international tax expert to choose the best option for your business.

To whom are LLCs accountable?

Have a company in the United States It involves complying with two tax authorities: 🇪🇸 Spain and 🇺🇸 USA.

  • 🇪🇸 Tax Authority (Spain): If you reside more than 183 days a year In Spain, you must declare and pay taxes on the profits your company makes in the U.S. The tax rate will depend on the company's legal structure and your personal situation. 💶
  • 🇺🇸 IRS – Internal Revenue Service (USA): You must file an annual report of your company's activities in the U.S., even if you don't pay taxes if you meet certain requirements (no employees or offices there). This report is the Form 5472 and is presented next to the Form 1120. 💵
💡 Tax tip: There is a agreement to avoid double taxation between Spain and the US. It allows you to deduct in Spain the taxes paid in the US, as long as you file the Form 1040-NR with your ITINBefore filing, consult with an international tax advisor.

Institute Revenue Service

There you only inform, information is power.

Tax Classification of LLCs according to the IRS

The IRS (Internal Revenue Service) It is the United States tax agency, and applies different rules to LLCs depending on their number of members and the tax option chosen.

  • 👥 Domestic LLC with two or more members:
    By default, the IRS treats it as a collective society.
    ➡️ Members declare and pay taxes on their share of profits.
    ➡️ You can choose to be treated as corporation, in which case the LLC pays taxes and then the members pay dividends.
    📄 For this option the following is presented: Form 8832.
    (Not recommended for tax residents in Spain)
  • 👤 Unipersonal LLC (Single Member Disregarded Entity):
    The IRS considers it a ignored entity, that is, the LLC does not exist for US tax purposes.
    ➡️ The owner declares and pays taxes as if he were self-employed, but in his country of tax residence.
    (Recommended for Spaniards)

✅ We manage the creation of your Sole Proprietorship LLC, that will not pay taxes in the US. provided that:

  • Do not have employees in the US.
  • Don't have a physical office in the US.
⚠️ Important:
The IRS and the Spanish Tax Agency exchange information.
You must comply with your tax obligations in both countries and avoid any practices that could be construed as fraud or tax evasion.

Double taxation agreement between Spain and the United States

Spain and the United States They have an agreement so that citizens and companies that generate income in both countries do not pay taxes twice for the same reason.

📌 Aim: Establish clear rules on where and how much to pay taxes, promoting trade and investment between both countries.

Imagine if you're from one country and earn money in another. This agreement means you may not have to pay taxes in the country where you earned that money.

  • 🇺🇸 If you're Spanish and earn money in the U.S., you may not have to share your profits with the U.S. government.
  • 🇪🇸 If you have already paid taxes in the US, you can deduct what you paid there is compared to what you have to pay in Spain for that same income.
✅ Main benefit: Avoid paying taxes twice on the same income in two different countries.


If you want more details, you can consult the Double taxation agreement signed by Spain and the United States. (in force since 22 February 1990). 📄

This agreement also includes other advantages, such as the elimination of double taxation on dividends, interest, and royalties, and the reduction of withholding taxes. Before doing business between Spain and the United States, be fully informed about the conditions and benefits. A tax advisor specializing in the US market can save you trouble and money.

⚠️ Important: Complying with the rules of this agreement requires making correct declarations in both countries and keeping all documentation.

LLC and income attribution according to the DGT

Entities in the income attribution regime (RAR) These are entities that do not pay taxes as an entity, but rather their income is distributed among their members, who declare it on their own tax returns.

Also applies to some foreign entities, such as American Single Member Disregarded LLCs, which operate in Spain and pay taxes in an equivalent manner. 🌐

🎯 Aim: Avoid the double taxation of income, both at the entity and partner level, applying the principle of tax transparency.

DGT Information Consultation

In conclusion, this type of entities must actually pay taxes on form 100 of the partner receiving the income in section E. Special regimes | Income attribution regime providing the name of the entity, the percentage of participation and the total annual return.
Download and Read

📌 Query:

A Spanish tax resident is the sole owner (100%) of a American LLC "disregarded" (that is to say, fiscally transparent in the US), which offers online services and does not have EP in Spain.

Ask if you should report the profits of the LLC on the model 100 (IRPF), in the section E. Income attribution regime, although the model program only allows up to 99% to be included, and he has 100%.

✅ Administration Response:

  1. Yes, you must declare the profits of the LLC on Form 100., in the section E (Special regimes | Income attribution regime).
  2. The LLC meets the requirements to be treated as an entity under the income attribution regime in Spain (according to resolution of 06/02/2020).
  3. Although the model only allows up to 99%, This does not exempt you from declaring the 100% on your income.The important thing is to pay taxes on everything generated.
  4. The returns must pay taxes as an economic activity in the income of the resident partner (form 100).
  5. The LLC, having a sole partner resident in Spain, cannot benefit from the Double Taxation Agreement (DTA) between Spain and the USA

The problem of model 100 in LLCs

📌 Query:

When are you going to declare these returns:

  • The model It asks you for the percentage of participation in the entity.
  • But It only lets you put up to 99%, even if you are the sole partner (100%).
  • The model automatically calculates the yield to be declared as:
    👉 Total return of the entity × % of participation

🛑 Result: If you enter 99%, the model will only declare 99% of the actual profit, and you will be leaving money untaxed (even if it is unintentional).

✅ The solution (accepted by the Treasury)

The Treasury has acknowledged in an official response that this limit of 99% is a technical error in the program, but that's it does not exempt you from declaring the 100% of the attributed income.

Therefore, the solution is:

💡 Adjust the total performance so that the 99% equals the actual 100%.

🧮 Practical formula

If the actual profit of your LLC is, for example, 100.000 €, you must:

  1. Divide it by 0.99:
    100.000 / 0,99 = 101.010,10 €
  2. Introduce:
    • Participation percentage: 99% (because it doesn't let you anymore)
    • Total performance of the entity: 101.010,10 €

The model will calculate:
99% of €101,010.10 = exactly €100,000 → ✅ Correct

🚫 What NOT to do

  • Do not enter the actual profit (€100,000) and then the 99%, because only €99,000 would be imputed.
  • Do not adjust the % participation (it is not possible except with management software or with TaxDown).
  • Don't forget to declare your total performance, even if the software doesn't make it easy for you.
To file taxes correctly, enter 99% as participation and divide your profit by 0.99.

[Remember that you are responsible for ensuring that all the information you provide is accurate and truthful. This means that if there are any errors or inaccuracies in your statement, 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.]

Alternatively, if you do not want to do it yourself or your return is more complex because you have other income and special considerations, we strongly recommend using professional services such as TaxDown (plan FULL) to ensure that 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:

  • Bank statements from your LLC's bank.
  • Your accounting spreadsheet (in case it is requested).
  • Your 1120 and 5472 returns filed in the US (We will send them to you).
  • Folder with invoices for deductible expenses.

Having these documents will facilitate the filing process and ensure that you are prepared for any requests for additional information from the tax authorities.

Plan your future: Social Security and assets

When operating your business internationally, it is essential to plan how to manage your social protection and you financial futureAn LLC gives you business flexibility, but that flexibility requires a personal strategy for your long-term well-being. 🌍

Key considerations for your financial future:

  • 🛡️ Global social protection: If your international operations do not involve contributions to the Social Security of your country of residence, design a alternative plan for retirement, health and other contingencies (private insurance, pension plans, etc.).
  • 📈 Strategic capital management: Take advantage of the efficiency of your structure to allocate resources to investments that consolidate your financial cushion (liquidity + growth).
  • 💼 Personal investment options: Rate pension plans private, index funds, real estate investment either life annuitiesThe right combination depends on your goals, time horizon, and risk profile.
🔎 Factors to evaluate: liquidity of each vehicle, taxation in your country of residence, expected profitability, total commissions (TER) and risk/volatility level.
👩‍💼 Professional advice: International financial planning is complex. Compare your strategy with a financial advisor and you tax advisor to adjust product, taxation and regulatory compliance.

LLC Jurisdiction and How to Avoid Permanent Establishment in Spain

A LLC (Limited Liability Company) It is an entity governed by the legislation of the US state where it is created (Delaware, New Mexico, Wyoming, etc.).
This means that it is subject to US regulations, even if you operate 100 % online and live in Spain or Europe. 🇺🇸

Now then, What makes the tax difference is not where the LLC was created, but how and from where it actually operates..

⚠️ The key point: do you have Permanent Establishment in Spain?

The concept of Permanent Establishment (PE) determine if the IRS can treat your LLC as a Spanish company for tax purposes (and therefore require VAT, IS, etc.).

According to the Article 5 of the OECD Model Convention and the Article 6 of the Non-Resident Tax Law, a foreign entity has a PE in Spain if:

  • Has an office, premises or fixed installation in Spanish territory.
  • You have salaried employees or dependent representatives acting on your behalf.
  • He regularly carries out his business activities from Spain.

✅ If you DO NOT have an EP, the LLC does not pay taxes in Spain as a company.

This is true if:

  • Your business is 100 % digital.
  • You don't have a physical office or warehouse in Spain.
  • You do not hire salaried employees in Spain on behalf of the LLC.
  • You are not acting as a dependent representative of the LLC from Spain (for example, by signing contracts in person or regularly negotiating with clients in Spain).

➡️ So there is no EP, and therefore the LLC does not pay taxes as an entity in Spain.
Instead, the benefits are attributed to the owner, who pays personal income tax as a natural person under the Income Attribution Regime.

Then:

  • If your LLC is a disregarded entity (fiscally transparent).
  • And you are a tax resident in Spain.

➡️ You only pay personal income tax as an individual for the profits of the LLC (distributed or not).
No Corporate Tax.
No obligation to apply VAT on behalf of the LLC.
Without the company being considered a tax resident in Spain. 💸

And yes: this structure can offer greater operational efficiency and legal security if it is well set up and managed.

Did you know there are over 2 million LLCs registered in the U.S.? They're very popular among American entrepreneurs for their flexibility and protection.

Tax residency and global structure: keys to expansion

Establishing an international presence with your LLC requires a good understanding of the implications of your tax residence and how each country's regulations affect your business structure. The tax treatment of your LLC and your income can vary greatly depending on your current and future country of residence.

But Each country has its own way of looking at an American LLC, and what in Spain is considered a transparent entity (pass-through), In others it may be irrelevant or even treated as an opaque entity subject to CFC rules..

🧠 The CFC Rules (Ccontrolled Foreign CCorporate Rules) are rules that some countries apply to prevent their residents from parking profits in foreign companies with lower taxes.

(Basically, they're trying to prevent you from setting up a company abroad just to defer or avoid taxes, when in reality you control it and it has no real structure.)

🧭 Jurisdiction Analysis for Global Entrepreneurs:

The choice of your tax residence directly impacts the management of your LLC and your tax obligations. Each country has its own regulatory and tax frameworks that you should evaluate based on your needs. personal and business goals and the fit with your international structure. 🌍

It is crucial to perform an individualized analysis to:

  • 🔎 Classify your LLC in the new country (transparent, opaque, hybrid) and understand their effects.
  • 🧠 Evaluate CFC standards and how could they impute you undistributed profits.
  • 💼 Determine taxation of the LLC's income (distributed or not) under local regulations.

What to look for in each country (quick checklist):

  • 🏷️ Treatment of CLL: Pass-through, company subject to IS, hybrid entity?
  • 🏢 Permanent establishment / significant presence: offices, employees, dependent agents, or effective management.
  • 🧩 CFC Standards: participation/control thresholds, low taxation test, substance tests.
  • 📜 CDI and withholdings: existence of a treaty, types of withholding tax (royalties, interest, services) and credit mechanism at destination.
  • 📅 Personal tax residence: days of stay, center of vital interests, habitual residence, effects of a change of residence.
  • 🏦 Reporting and compliance: information templates, CRS/FATCA, banking requirements (KYC/AML) and supporting documentation.
  • 💳 VAT: B2B/B2C rules, OSS (or MoR if applicable), and local sales links.
  • 🩺 Social security: mandatory contributions, bilateral agreements and coverage (health, pension).
  • 💸 Effective taxation: marginal rates, exemptions/deductions, imputation of income and treatment of dividends/capital gains.

🎯 Key idea: Your LLC's “passport” is US, but Who is in charge is your tax residenceFirst, define where you reside (and will reside), and align the LLC's operations with that framework to avoid surprises and optimize with legal certainty.

📝 Final Conclusion:

For one strategic and legally compliant international tax planning, a detailed analysis of your personal and business situation in relation to the laws of your country of residence and the jurisdiction of your LLC is essential. 🌍

✅ Make sure you understand How your country of residence views your structure and how to meet all your obligations. Good planning involves choosing the setting where your business shines. ✨ always within the legal framework.

Effective management of the LLC: impact on tax residency

Even if your LLC is registered in the 🇺🇸 USA and does not have permanent establishment in Spain, it is essential to consider the concept of effective direction. 🧠 If your company's management and control are based in Spain, the Treasury could consider it a tax resident in Spain, with the consequent tax implications. This would give them room to declare her as a tax resident in Spain.

🧾 What does the law say? According to the Article 8.1.c) of Law 27/2014:

"An entity is considered to have tax residence in Spain when has its effective management headquarters in Spanish territory. It will be understood that there is an effective address when the address is located in Spain. direction and control of all its activities."

That is, even if the LLC:

  • ❌ It was not incorporated under Spanish law.
  • ❌ It has no registered office in Spain.
  • ✅ But You manage everything from home In Spain, the Treasury could say that YEAH has Spanish tax residency.

🛡️ How to ensure effective management outside Spain (role of the manager)

One way to ensure that the effective address of your LLC resides outside of Spain is to formally delegate his management in an external and professional figure: the managerA professional manager is a American legal entity that:

  • 📋 Assumes the operational, administrative management and legal compliance from the LLC from the USA
  • 🛠️ Executes the decisions and guidelines established for the operation of the LLC.
  • 📄 File forms and returns (IRS, FinCEN, BEA, etc.).
  • 🤝 Acts as an intermediary with the registered agent.
  • 🗂️ Ensures documentary evidence that executive management is carried out from the U.S.

🤔 Strengthening the structure for compliance

Delegating effective management to a professional manager is key to strengthening the validity of your LLC. operates outside of Spain For tax purposes. From a legal and documentary perspective, your LLC is transparently managed from the U.S.

This approach adds a layer of legal security to your structure, although remember that the interpretation and application of tax regulations may vary and change over time.

💡 Tip: Always consult with a certified tax professional to adapt the strategy to your specific case and current regulations.

Service of manager for your LLC

As managers of your LLC, we assume the administrative and operational management of your company directly from the USA, guaranteeing its legal and tax compliance in that jurisdiction. Our goal is to offer you tranquillity and efficiency, so you can focus on what really matters: the strategic growth of your business 🚀.

📝 All this is formalized by a
service provision contract between your LLC and us, a US entity (US person) with operational headquarters in the US, which reinforces that the effective headquarters of management is outside of Spain.

This document is tangible evidence that you can present in case of inspection to support your structure.

🛠️ Creation and maintenance of the LLC
We take care of setting up your LLC, processing your EIN, and ensuring it complies with all legal and corporate obligations required in the U.S.

📋 Operational Management and Compliance in the U.S.
We oversee the legal and tax status of the entity, maintaining up-to-date records and processing the necessary forms. We file annual returns with the IRS (Forms 5472 and 1120), FinCEN, and BEA (BE-13, if applicable), and manage the renewal of the registered agent, as well as any other federal or state requirements.

🤝 Support and Coordination
We offer ongoing support to resolve questions, coordinate procedures, and assist you with any requirements or processes that arise.

💬 Communication and ongoing support
We are available to answer questions, coordinate procedures, and assist you with inspections or official requests.

🎯 Commitment to Management and Compliance
We are committed to managing your LLC in a legal, efficient and transparent, acting on your behalf to ensure that your business operates with solidity and compliant with US regulations.

ImportantThis service isn't a panacea, but it is a key element in giving substance to your US LLC and strengthening your legal defense in the event of a review.

Agreement: the legal basis of your LLC

🔥 He Agreement An LLC (LLC) is the fundamental internal document that governs the operation and management of your LLC. Although it's not mandatory in many U.S. states, drafting it correctly is key to establishing a solid structure, defining roles, and ensuring the legal security of your global business.

📌 What is OA for?

✅ Operating rules: how decisions are made, profits are distributed, and the company is managed.
✅ Role of the owner and manager: in a single-member LLC (single-member), the owner can manage it directly or delegate to a third party.
✅ Effective address in the USA: key to preventing the Treasury from considering the LLC a tax resident in Spain.
✅ Limited liability protection: The company's debts and obligations do not affect personal assets.

🤝 Your LLC's OA if you use a US manager.

If you like ensure that effective management is exercised in the U.S. and strengthen the legal structure, the OA can formalize the delegation of management functions to a professional manager In U.S.A.

A well-structured OA with a manager should include:

  • 📋 Delegation of administrative and operational management: The manager is responsible for administrative, operational, and legal compliance functions in the U.S., ensuring that the LLC complies with its bylaws and local regulations.
  • 🎯 Clarity in roles: The OA defines the manager's responsibility for day-to-day management and compliance, while the owner maintains a strategic oversight role.
  • 🧾 Tax compliance: The manager handles tax and regulatory obligations to the IRS and other entities, including filing official forms.

🔒 Importance for legal security and taxation

A well-drafted OA and a professional US manager are key evidence that your LLC has substance and effective direction in your jurisdiction of incorporation. This strengthens the legal security of your structure and demonstrates compliance with international regulations.

In short, the OA is the legal backbone of your LLC. Well-designed, it allows you to operate with transparency, consistency, and efficiency, ready to respond to any information request.

How to face a tax audit with your LLC

If one day you receive a notice from the IRS advising of an inspection or investigation into your LLC in the U.S., take a deep breath. 😌 and follow these practical steps to deal with it safely:

1️⃣ Keep calm and organize your documentation

  • Gather the essentials at once: Agreement, contracts with managers or suppliers, bank statements, accounting records, US forms (1120, 5472, BE-13) and expense vouchers.

2️⃣ Be clear about the areas that will be examined with a magnifying glass 🔍

  • Tax residence of the LLC: It shows that the effective direction and key decisions are made in the US, with documentary support.
  • Permanent Establishment (PE) in Spain: No offices, salaried employees, or dependent representatives in Spanish territory.
  • Income taxation: If you're a tax resident in Spain, declare your profits correctly on your personal income tax return and ensure your figures are consistent.
  • Deductible expenses: Only those directly linked to the LLC's activity and with valid supporting documents.
  • VAT: Verify B2B (reverse charge) and B2C (OSS/MoR if applicable) in accordance with European regulations.

3️⃣ Collaborate… but with precision 🧠

  • Respond to the Treasury in a clear, concrete manner, always supported by documentation.
  • If any questions are complex, consult with a tax/legal advisor first to ensure consistency and certainty.

4️⃣ Rely on specialists 💼

  • Having an international tax advisor reduces risks and guides you throughout the entire process.

📌 Remember: A well-managed structure and proactive compliance are your best defense against any inspection. Transparency and solid documentation are the foundation of your legal security and the sustainability of your global business.

💪🚀 Cheer up, if you have everything in order, you've won!

The role of LLCs in global business

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, as it offered multiple benefits for entrepreneurs. 🚀

By the 1990s, nearly all states had adopted this legal form, which combined the best aspects of partnerships and corporations. Thus emerged a solid legal framework that allowed entrepreneurs to choose a flexible and protective business form. 🙌

Today, LLCs remain very popular, especially in digital commerce and global entrepreneurship. Their success is due to the fact that they offer a perfect balance between the protection of a corporation and the simplicity of a partnership. Their advantages include:

  • ✅ Efficient organizational structure
  • ✅ Simplified regulatory requirements
  • ✅ Elimination of double taxation typical of traditional corporations

With these characteristics, LLCs have become a preferred option for businesses seeking to expand internationally and for digital startups that value speed and reduced bureaucracy. 🌎

And which states are the most advantageous for creating them? 📍 Delaware, Wyoming, and New Mexico are among the favorites for their favorable laws, low taxes, and high confidentiality. If you want to create an LLC in the U.S., our top recommendation is New Mexico.

Recommended states to open your LLC

If you want to create a LLC (Limited Liability Company) in USAIt's crucial to choose the state where you register wisely. Not all offer the same conditions or benefits, and some stand out especially for their tax, legal, and administrative advantages. 🇺🇸

Among the most favorable for LLCs, the following stand out: New Mexico, Wyoming and DelawareEach one has characteristics that can be very attractive to Spanish entrepreneurs, depending on their goals and needs. 🙌

  • New Mexico: Shines for its administrative efficiency and simplicityThe incorporation process is quick, doesn't require an Annual Report, and minimizes the administrative burden. Perfect for those who value agility and easy maintenance. 😎
  • Wyoming: It offers a strong asset protection and a legal framework that limits the reach of creditors over the LLC's assets. Furthermore, it does not apply state corporate or personal income taxes. 💵
  • Delaware: It stands out for its legal security and sophisticated legal frameworkIts regulations allow for customized structures, efficient management, and investor attraction. It maintains competitive and transparent annual costs. 🚀

💡 Our recommendation: If you are not a citizen or resident of the U.S., New Mexico It is the best option due to its low cost, zero annual bureaucracy, and total privacy in registration.

📩 If you want us to help you create your LLC and optimize it for your global business, contact us hereWe take care of everything so you can get off to a good start. 🚀

Sales Tax in the US: What You Need to Know

When operating your LLC In the US, it is key to understand how the Sales Tax (sales tax) to digital services, as it depends on the state where it's registered. Regulations aren't the same across the country, and following the rules will prevent surprises. 😮

📌 Application of Sales Tax on digital services: Some states, such as New Mexico, also apply this tax to digital services. This means that certain providers may add it to your bill if your LLC's registered address is in one of these states.

📌 Determination of the obligation: A LLC Single-Member Disregarded A company without a permanent establishment in the U.S. is typically not subject to this tax. However, some providers apply it by default based on the company's registered address.

✅ Strategies to avoid improper payments:

  • Communicate your situation to suppliers: Contact them to confirm if Sales Tax applies and, if so, send the necessary documentation (such as the form W8-BEN) to demonstrate that you are an exempt foreign entity.
  • Choose your state of incorporation wisely: When registering your LLC, be aware of local laws regarding sales tax on digital services. Some states don't apply it, which can save you money.

💡 Important: Since rules vary by state, always consult with a U.S. tax advisor to ensure your LLC is properly compliant… and that you aren't being charged anything you shouldn't. 😉

Legality of opening an LLC in the US

If you are a Spanish resident and want to create a company in USA, one of the best options is LLC (Limited Liability Company). This is a legal form that allows you to own a foreign company without legal or tax issues. 🇺🇸 One of the advantages of LLCs is that they are passthrough companies, meaning they don't pay taxes at the entity level; their owners declare them on their personal taxes. Furthermore, by not having a permanent establishment in Spain, they don't 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 the geographic restrictions that might affect other types of companies. This way, you can have a diversified customer base and take advantage of the opportunities in the digital market. 🌎

If you are a tax resident in Spain and want to create a company in USA, one of the best options is LLC (Limited Liability Company). This legal form allows you to own a foreign company without legal or tax issues. 🇺🇸

One of the great advantages of LLCs is that they are companies passthrough: They do not pay taxes at the entity level, but their profits are passed on to the owners, who declare them on their personal taxes. Furthermore, if your LLC does not have permanent establishment in Spain, is not subject to the taxation or regulations of a Spanish company. 😎

This makes them an ideal option for businesses that operate globally, without the geographic limitations that plague other business structures. This way, you can diversify your customer base and take full advantage of the opportunities in the digital marketplace. 🌎

Another advantage is that an LLC can be anonymous, offering greater privacy and protection. However, this feature can raise suspicions with tax authorities if there's no legitimate reason to open it abroad. 😓

Therefore, it is key to maintain transparency and comply with all tax obligations in both Spain and the United States. you will avoid problems with the Treasury and you'll fully enjoy the benefits of having an LLC. 🙌

Remember: LLCs with at least one foreign-owned 25% must file Form 25% annually. 5472 before the IRS (Internal Revenue Service) to report transactions between the LLC and its foreign partners. Failure to comply can result in fines of up to 25,000 $. We handle your annual filing for you, so you don't have to worry.

Economic Sense of an LLC

Opting for an LLC in the US represents a strategic decision for entrepreneurs and digital companies seeking operational efficiency and a solid legal framework Globally. This structure offers a series of advantages that position it as a key option for the success and growth of your international business. Here are some of them:

🔄 Flexibility in management and structure
A single-member disregarded entity (SME) LLC allows you complete control over business operations without partners or complex structures. You can adapt to the digital market quickly and with less bureaucracy.

🧠 Efficiency and Legal Security: A well-structured LLC provides a solid legal framework and efficient international tax management, providing security for your global business.

  • 🛡️ Limited protection
    Your personal assets are protected from debt or lawsuits. An LLC creates a clear separation between your personal and business finances.
  • 🔒 Privacy in the Public Registry
    Some US states offer the option of not publicly disclosing the owner's name in state LLC records. This feature can be important for protecting the business's identity, while complying with tax transparency obligations to the relevant authorities.
  • 📑 Simplified accounting
    Being entities passthroughLLC accounting is simple: income and expenses are reported directly to your personal income tax. Less paperwork, less cost.
  • 💲 Efficient set-up and maintenance costs
    Establishing and maintaining an LLC is comparatively efficient, with affordable costs that make it easy to start and continue your business without large initial outlays.
  • 📉 Reduction of bureaucracy
    Fewer forms, fewer regulations, and more agility. You can focus on growing your business, not filling out PDFs for the administration.

💳 Operational advantages: Tools, hard currency, global payments… Having an LLC opens doors that an SL can't touch.

  • 🛒 Access to Stripe USA
    An LLC opens the door to Stripe USA, with better rates, more integrations, and more services than the European version. Ideal if you sell information products or SaaS.
  • 💵 Access to the dollar
    Getting paid in USD gives you stability and protects you from the volatility of the euro or the peso. It's also a strong currency for international trade.
  • 🏦 Access to better banks
    U.S. banks offer high-quality products: multi-currency accounts, flexible credit, and easy access to international payments.
  • 💸 Access to investment and financing
    An American LLC is more attractive to foreign investors and VCs. If you ever seek funding, being in the US can make all the difference.

🌐 Strategic advantages: Gain a foothold in the U.S. without living there, build a global reputation, and scale your business more easily.

  • 🏛️ Favorable business environment
    The United States has clear laws, incentives for SMEs, and strong legal protections (e.g., intellectual property).
  • 🌟 Reputation and credibility
    Having an American company gives you prestige. It conveys trust, professionalism, and seriousness.
  • 🌐 Internationalization of your business
    From the U.S., you can sell more easily to the entire world. The country's network of trade agreements and prestige work in your favor.

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 ability to internationalize your business. You'll also enjoy limited liability protection, simplified management, and a suitable framework for the growth and success of your global business. 🌟📈

Responsibilities when opening an LLC

If you have decided to open a LLC (Limited Liability Company) in USAYou should know that there are several responsibilities and obligations to fulfill. It's not enough to simply create the company: you also have to keep it up to date with the legal and tax requirements of both countries. 🇺🇸

Some of the responsibilities you should keep in mind include:

  • 🏢 Public Address in the USA: You must have a public address in the U.S. to receive business correspondence. This can be your office address, your home address, or a virtual mail service.
  • 📬 Registered Agent in the U.S.: The person or company that receives official notifications and certified mail on behalf of the LLC. Must have a physical address in the state where you registered the LLC and be available during business hours.
  • 📄 LLC Documentation: Include the Certificate of Formation, the Operating Agreement, the EIN (Employer Identification Number), and, if your business requires it, the ITIN (Individual Taxpayer Identification Number). They must be complete and up-to-date.

Regarding tax obligations, consider the following:

  • 📝 US Tax Return: The LLC must file an annual tax return with the IRS (Internal Revenue Service).
  • 💰 Paying Taxes in Spain: As the owner of an LLC in the US, you must pay personal income tax in Spain on the profits you earn, declaring that income as income from economic activities.

In addition, there are specific reporting obligations:

  • 📑 Form 1120 + 5472: Annual IRS return, including Form 5472 if you have at least one foreign-owned LLC. This is used to report transactions between the LLC and its foreign owners or partners.
  • 📊 BE-13: Federal Economic Survey for investments over $3 million in a U.S. LLC or investments received from abroad. Filed with the Bureau of Economic Analysis (BEA).

In Spain, you must also comply with reporting obligations:

  • 🌍 Form 720: Mandatory if you have assets abroad valued at more than €50,000. This includes bank accounts, securities, stocks, insurance, income, or real estate. This must be submitted once, unless there are significant changes.

💡 Did you know that there are differences between LLCs in different states across the U.S.? For example, some states require an annual report summarizing the LLC's activity and information, while others don't, which simplifies management and reduces costs. Therefore, it's a good idea to compare the characteristics of each state before registering your LLC.

US Taxation: Framework and Obligations

You are not going to pay anything there

(Inform only)

If you have one LLC (Limitated Lreliability CIf you're an LLC (company) in the United States, it's important to understand its tax framework and how you can optimize your business's tax burden. The tax treatment of LLCs varies depending on several factors. 🇺🇸

Among the conditions that you must meet are the following:

  • Activity Location: If your LLC operates exclusively online, without having a physical establishment in the US, it may benefit from a more efficient taxation at the state level in the jurisdiction where it is registered.
  • Nationality and Residence of the owner: If you are a tax resident in Spain, you will have to declare and pay personal income tax on the profits you obtain from the LLC. 😓
  • Dependency on American Workers: If you don't need to hire employees in the U.S. who are essential to the operation of your business, you won't have to pay taxes on them. For example, a virtual secretary isn't considered essential, but a development team is. 💵

Compliance with these conditions may influence the tax efficiency of your LLC in the USIt's important to remember that even if your LLC is a "pass-through" entity (where profits are attributed to its owners for personal tax purposes), you are required to file an annual information return with the IRS (Internal Revenue Service). 📄

When choosing your state of registration, it's important to consider the state's tax framework. Some states, such as Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming, do not impose state corporate or personal income taxes. This feature can contribute to the overall efficiency of your structure, provided you comply with federal and state regulations. Therefore, we recommend analyzing the advantages of each state before choosing where to register your LLC.

💡 There are more than 40 states with different rules. 

📊Popular states for LLCs and their key points
State State tax Annual report Owner Privacy
new Mexico 0% No High
Wyoming 0% Yeah High
Delaware 0% Yeah Average
Florida 0% Yeah Average
Texas 0% Yeah Average
💡
Indicative data. May exist fees, franchise tax or other state/annual fees. Always confirm state requirements and applicable regulations.

Should I open an LLC before a bank account?

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:

  • 📄 Articles of Organization: Document certifying the creation of the LLC and containing basic company information, such as name, address, purpose, and members.
  • 🔢 Tax Identification Number (EIN): Number that identifies the LLC before the IRS (Internal Revenue Service), equivalent to the NIF/CIF in Spain.
  • 📝 Form SS-4: Form you must submit to the IRS to apply for an EIN. It can be submitted by mail, fax, or online.

These documents prove the legal existence of your business and are essential for meeting banking requirements. Without them, you won't be able to open a business bank account for your LLC at a neobank. 😓

⚠️ Not all banks accept foreign LLCs. Some only work with companies with a physical presence in the U.S. (an office or warehouse). Others require you to travel to the U.S. to open the account in person. Therefore, we'll recommend banks that offer facilities and benefits for your LLC.

CP 575, the long-awaited letter with your EIN number

When to apply for an EIN from the IRS

The chart shows the average wait time (in weeks) to obtain an EIN depending on the month in which it is applied for.

🔴 In January and December The wait can last until 10 weeks.
🟡 From March to November, the time is more reasonable, between 4 and 6 weeks.
🟢 And the best time to request it is April to July, with only 3 weeks waiting.

👉 If you're thinking about setting up your LLC and need an EIN quickly, you already know which months to avoid 😉

Tiempo medio de espera EIN

Average wait time (weeks) to obtain an EIN

Depending on the month of application to the IRS.

1–3 weeks 4–6 weeks ≥9 weeks

Recommended Banks for LLCs

If you have one LLC (Limited Liability Company) in USA, you'll surely want to have a business bank account that offers you facilities and advantages for your business. But not all banks are the same, and some may put obstacles in your way or charge you exorbitant fees. Therefore, we recommend that you opt for the neobanks, digital banks that operate 100% online and offer you modern solutions tailored to your needs. 🚀

Among the most notable neobanks for LLCs, three stand out: Payoneer, mercury and wiseThese neobanks stand out for their compatibility with the cross-border and digital needs of LLCs. 🌎

  • 💳 Payoneer: American neobank operating in euros (€) and US dollars ($). It allows you to open a multi-currency account to send, receive, and convert money in more than 50 currencies with real exchange rates and no hidden fees. It includes a virtual and physical debit card for online payments anywhere in the world.
  • 🏦 mercury: US dollar-denominated neobank ($) with an online business account, invoicing and accounting tools, integrations with Stripe and Shopify, and access to financing programs. It offers physical and virtual debit cards for online and in-store payments. this link you will have immediate access. 💵
  • 🌐 wise: Formerly TransferWise, it's a European neobank operating in over 50 currencies, including euros (€) and dollars ($). It facilitates international transfers with transparent fees, a real exchange rate, and low commissions.

Neobanks comply with the same regulations and guarantees as traditional banks. By operating online and without physical branches, they reduce costs and can offer you better terms and services. Therefore, trying out a neobank may be the step your LLC needs to simplify its financial management.

Benefits for the US when opening your LLC

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 are registered. These fees vary by state, but are usually around hundreds of dollars annually. 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 key personal and financial information, such as the EIN (Employer Identification Number) and, in some cases, the ITIN (Individual Taxpayer Identification Number). This data allows the U.S. 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 LLCs are very popular among American and foreign entrepreneurs due to their flexibility and protection. Each state has its own rules and advantages, so choosing where to register wisely is key. For example, Delaware It stands out for its modern legislation, its court specializing in commercial matters, and its low taxes.

Accounting for LLCs: What is and isn't mandatory

Many entrepreneurs believe that LLCs (Limited Liability Company) in USA They don't need to keep formal accounts. But this is a myth which can cause problems. Although LLCs do not have to file full financial statements, they are required to report certain accounting information at the federal level. 🇺🇸

The entities requesting this information are:

  • IRS (Internal Revenue Service)
  • FinCEN (Financial Crimes Enforcement Network)
  • BEA (Bureau of Economic Analysis)

These agencies require key data such as: costs, income, expenses, profits, transactions, assets and liabilities. All of this is reported on specific forms such as the 1120, he 5472 and the BE-13. 😓

Therefore, it is essential to carry a accurate and transparent accounting for your LLC. Avoid the mistake of incorrectly reporting or inappropriately deducting expenses. Accounting should reflect the financial reality of the company, as it is the basis for calculating personal income tax and any other taxes applicable in your country of residence. Proper accounting management is key to the legal security of your business. 💵

To avoid mistakes, you should know which expenses are deductible and which are not:

  • Deductibles: Directly related to the business, necessary and reasonable.
  • Non-deductible: Fines, penalties, donations or personal expenses not related to business activity.

💡 Some states require LLCs to maintain complete accounting records and file financial statements. This is the case in California, New York, Pennsylvania, and Utah. In these cases, you must record detailed income and expenses and file a balance sheet and income statement with the state.

Personal Income Tax Optimization: Withdrawals and Deductible Expenses

If you have one LLC (Limited Liability Company) in USA, you should know that you have to include all the benefits of your business in the calculation of the Income Tax (Personal Income Tax) in Spain. This includes both amounts you withdraw and amounts you leave accumulated in the company. This way, you'll avoid problems with the Tax Agency and comply with your tax obligations. 🇪🇸

⚠️ Common mistake: Many entrepreneurs believe they only need to report what they withdraw from the company. However, for LLCs, U.S. tax rules state that you must declare all accumulated profits at the end of the year, whether you retire it or not. 😓

💡 How to pay less legally?

The key is in maximize deductible expensesThese are expenses directly related to business activity and that are necessary and reasonable. When deducted:

  • 📉 You reduce the tax base (the amount on which taxes are calculated)
  • 💵 You pay less taxes
  • 📈 You increase net profitability

🚫 Expenses that No are deductible

  • Personal expenses
  • Fines or penalties
  • Donations

If you're not clear about what you can and can't deduct, you could make serious accounting errors that could result in penalties. Therefore, it's essential to be familiar with the rules regarding deductible expenses, a topic we'll cover in detail in the next section. 🙌

Deductible Expenses in LLCs

If you have one LLC (Limited Liability Company) in USA, it is crucial to understand what expenses you can deduct from your businessOnly expenses that are directly deductible are linked to your business activity and necessary to generate income. 🇺🇸

Principles of Deductibility:

  • Need and connection: the expense must be strictly necessary to generate income and be directly related to the activity of your LLC.
  • Documentary justification: preserves invoices (no tickets), receipts, contracts and proof of payment that prove the reality and amount of the expense.
  • Reasonableness and proportionality- The amount should be consistent with business usage (e.g., tool proration, multi-user licenses, etc.).
  • Separation of assets: uses bank account and payment methods of the LLC to avoid mixing with your personal sphere. 🔐

Non-Deductible Expenses (common examples):

  • Personal expenses: consumer purchases, leisure, non-business travel, household expenses, etc. Including them is incorrect and creates a risk of penalties.
  • Fines and penalties: are not deductible.
  • Donations: In general, they are not deductible in the field of economic activity.

💼 SpentUSA (general criterion)Spain (IRPF self-employed)
Business lunchesDeductible to 50% when it is ordinary and necessaryDeductible 10% (with limits and formal requirements)
Vehicles used for the activityDeduction proportional to use accredited businessDeductible 30% if the affectation and requirements are proven
Fines and penalties❌ Not deductible❌ Not deductible

Note: Percentages and criteria are subject to conditions and limitsAlways provide evidence (invoices, meeting agendas/justifications, usage sheets, etc.).

Risks of misuse:

  • Tax fraud: inflating or inventing expenses distorts economic reality and may be classified as punishable conduct by the IRS/AEAT.
  • Penalties and surcharges: adjustments, interest and penalties for improper deductions.
  • Loss of limited liability: Mixing assets or using the LLC as a “personal box” can compromise the corporate veil. ⚠️

Deductibility between jurisdictions: Rules may differ between the US and Spain. For your Income Tax As a Spanish resident, deductibility is governed by Spanish regulations, although In the US, certain concepts may be broader. Declare your LLC's profit in Spain according to Spanish personal income tax rules and document the adjustments.

Practical recommendation:

  • Transparency: that the accounting reflects the economic reality (income ↔ expenses ↔ statements).
  • Rigorous documentation: invoice to the LLC, LLC payment method, contract/work order, and traceability.
  • Internal expenditure policy: Define in writing what is deductible, limits, approvals and archiving (checklist + cloud folder). 📂
  • Professional advice: Validate dubious criteria with an international tax expert to avoid subsequent adjustments.

There are deductible expenses in the US that may not be in Spain (and vice versa). For prudence, guide your accounting with the Spanish personal income tax If you are a resident in Spain, always keep sufficient documentation for each deduction.

Types of expenses allowed

If you have one LLC (Limited Liability Company) in the U.S., you can deduct necessary business expenses… but be careful: if you are tax resident in Spain, the profits of your LLC are taxed in your Spanish personal income tax under the income allocation regime, and only You will be able to deduct the expenses recognized by Spanish law, although the IRS is more flexible.

Key idea: The profit you declare in Spain No is the net “IRS”, but the net after deducting only the expenses permitted by Spanish personal income tax law. 🇪🇸

How does it affect you?

  • USA Accounting: Keep it impeccable for your daily operations (suppliers, banks, SaaS…).
  • Declaration in Spain: recalculates the benefit according to the criteria of the Spanish Personal Income Tax before filing your income tax return.
  • Expectations: games like meals, car, travel or training are more restrictive in Spain → the taxable profit is usually elderly than the one you see in the LLC accounting or at the bank.

How to do it right?

  • 📁 Document absolutely everything: invoices made out to the LLC, contracts, payment receipts, emails/work orders.
  • 🧾 Only justified, routine and directly linked expenses to the activity (economic coherence).
  • 🧑‍⚖️ If you doubt Regarding deductibility in Spain, consult a specialized tax advisor before including the expense.

What does it mean in practice?

  • You can keep the accounting of the LLC with the IRS deductible universe for internal control and suppliers.
  • When preparing your personal income tax in Spain, recalculates and deduct only what the Spanish Treasury accepts (the rest does not reduce your base here).
  • Expenses that the IRS would accept but Spain wouldn't → No They lower your personal income tax; they would only be of use to you if you ever had taxes in the US.

Inconvenient reality 😬The Treasury is not naive. If it suspects, it closely reviews transactions, expenses, and even social media accounts. If it detects inconsistencies, will reclassify and the burden of proof will be on you.

Extra good practices

  • Guard all invoices, receipts and any records that justify the need for the expense.
  • If an expense could be controversial (premium trips, recurring meals, gifts), consider apportion or be conservative with the deduction.
Tipos de gastos permitidos

💼 Types of permitted expenses (Spanish personal income tax criteria)

If you operate a US LLC but are a tax resident in Spain, the expense that reduces your personal income tax is the one that recognizes Spanish lawBelow is a visual guide to help you communicate this clearly to your client/team.

Deductible Gray area / with limits Amortization / special
Category Examples Treatment Requirements / Notes
💳Financial expenses
Interest, commissions, bank fees
 Stripe/PayPal fees, interest, transfers Deductible Traceability with the activity and invoice/receipt in the name of the LLC.
🚗Transport
Trips to clients, messaging, vehicle rental
 Trains/Flights, Uber/Taxi, One-Time Rentals Gray area Just the strictly Business. Keep itineraries/agendas and receipts. Avoid personal interactions.
📣Advertising/Marketing
Ads, affiliates, sponsorships
 Google Ads, Meta Ads, affiliate commissions Deductible Nominative invoice and direct relationship with sales or collection.
🍽️Business lunches
Meetings with clients/suppliers
 Menus, coffees, travel tickets Gray area with limits No overnight limits Guidelines: 26,67 € in Spain and 48,08 € abroad. Electronic payment, full invoice and reason/client noted.
🎓Training
Courses, books, materials
 Course platforms, technical books Gray area Must have direct link with the activity. Provides the syllabus/program and its relationship to the service.
🛡️Insurance
RC, professional responsibility
 Liability insurance, cyber, surety Deductible Only strictly business ones. Personal ones → do not deduct.
🤝Third-party services
Freelancers, consultants
 Design, editing, copy, consulting Deductible Contract/order, invoice and deliverables report.
📦Inventory
Purchases for resale, losses
 Stock, packaging, justified losses Deductible Inventory control and documented losses.
🖥️Physical assets
Equipment, furniture
 Laptop, camera, desk, chair Amortization Deductibles via amortization according to personal income tax tables. Avoid allocating the entire amount at once.
🚀Pre-operating expenses
Constitution, rates, fees
 Registered agent, state fees, notary Gray area Deductible if there is support and they are affected by the start of activity.
🏛️Maintenance LLC
Agent, reports, 5472/1120 pro-forma
 Registered agent, state annuities, information forms Deductible Corporate compliance and registration expenses.
🧰Software / Tools
SaaS, hosting, CRM
 Notion, Google Workspace, hosting, CRM Deductible License in the name of the LLC and for professional use.
🌐Web and domains
Domain, email, SSL
 Domains, certificates, corporate email Deductible Costs directly linked to the online presence.
🖇️Office supplies
Consumables, stationery
 Ink, paper, low-value peripherals Deductible Exclusive or main use in the activity.
📉Amortization / Depreciation
Cost distribution over time
 Equipment, licenses with useful life Amortization Applies coefficients/useful life from official IRPF tables.

Order type: Use a cloud folder with subfolders by month/area and a control sheet (Date · Supplier · Concept · Amount · Payment method · Link to invoice).

❌ Can I deduct 18,000 $ per year for teleworking?

No, and be careful with this myth that is circulating out there.

Some “LLC sellers” They assure that you can deduct up to 1,500 $ per month for working from home. The basis for this error often comes from a deduction that exists in the US called home office deduction, but it doesn't apply as you think, nor does it work in your context.

Let's go step by step 👇

🇺🇸 In the United States:

  • There is a deduction for teleworking called Simplified Home Office Deduction, which reaches up to 1,500 $ per year, not per month.
  • Only applies if:
    • You are self-employed (self-employed) under the federal tax code.
    • You have a space exclusive and habitual work at home.
    • This space is perfectly documented (m², plan, photos…).
  • ➡️ If you use an LLC disregarded and you pay taxes in Spain, this deduction No applies to your personal income tax. This only applies to those who file direct tax returns in the US.

🇪🇸 In Spain:

  • You cannot just deduct a percentage of your primary residence.
  • The deduction for household expenses is only allowed if:
    • You have a space affected by economic activity.
    • You are registered as self-employed in Spain.
    • You can prove that the space is not for personal use.
  • ➡️ And most importantly, if you recognize part of your home as the LLC office, you may be generating Permanent Establishment (PE)…and that’s where things get complicated.

💡 Conclusion: Neither 1,500 $/month in the US, nor 18,000 $/year in SpainIf you work from home, you can deduct what's reasonable and justified. Period. Don't confuse real deductions with tax marketing. Optimizing isn't inventing.

Correct invoicing and accounting in LLCs

It is essential to carry one legal and transparent accounting for your LLC. Avoid the mistake of including illegitimate expenses, as this can lead to serious problems with the IRS in the US and the Spanish Tax Agency.

🚫 Risks of including illegitimate expenses:

  • Tax Simulation: Including personal expenses as business expenses (e.g., gas for personal travel, clothing, entertainment) is incorrect and is considered tax fraud. These expenses are not related to business activity and are not deductible.
  • Tax Fraud: Falsifying a company's financial situation through artificial expenses can be construed as tax fraud. Tax authorities have mechanisms to detect these practices through bank transactions and other means.
  • Penalties: If illegitimate spending is discovered, significant fines, retroactive penalties, and other legal issues may result.

📌 Principles of correct deductibility:

  • Reality and Connection: Only expenses that are actual, necessary, and directly related to your LLC's business are deductible.
  • Documentation: It is essential to have invoices, receipts, and contracts that justify each expense.
  • Transparency: Your LLC's accounting should accurately reflect the financial reality of your business.

💡 Recommendation:

  • Do not use the company to cover personal expenses.
  • Avoid practices that generate artificial expenses.
  • Consult with accounting and tax experts For any questions regarding tax deductibility and to ensure compliance with applicable regulations in the U.S. and your country of residence.

Related-party transactions: transparency and compliance

When two related companies (for example, with the same owner) carry out transactions with each other, these are considered related-party transactionsIt is essential that these operations be carried out under criteria of complete transparency and legality to ensure regulatory compliance.

📏 Principle of Arm's Length: Tax regulations establish that related-party transactions must be valued at market prices, that is, at the price that would have been agreed upon between independent parties under free competition conditions. This principle seeks to ensure that profits are properly allocated to each entity, avoiding the artificial shifting of profits for tax purposes.

✅ Keys to compliance:

  • Royal services: Invoices must correspond to services actually provided or goods actually delivered.
  • Fair assessment: The agreed prices must be consistent with those that would apply between unrelated companies.
  • Comprehensive documentation: It's crucial to have detailed contracts, valuation reports, and proof of the actual provision of services or delivery of goods. This is essential for justifying transactions to tax authorities, such as the Spanish Tax Agency.

⚠️ Consequences of non-compliance: Manipulating prices or simulating related-party transactions may be considered tax fraudThis carries heavy fines, penalties, and, in cases involving significant amounts, even prison sentences. Tax authorities scrutinize these transactions closely to detect irregularities.

💡 Recommendation: Always carry out related-party transactions with maximum transparency and at market prices. Consult with a tax advisor specializing in international taxation to ensure proper compliance.

Digital Assets and NFTs: Tax Treatment in LLCs

Digital assets like NFTs (Non-Fungible Tokens) are a new innovation in the financial landscape. Understanding how transactions involving NFTs are handled in the context of your LLC is critical to ensuring proper tax compliance and avoiding risks.

📊 Principles of valuation and deductibility:

  • Reality of expenditure/operation: Any NFT transaction your LLC makes must be a real, business-related transaction.
  • Market value: The valuation of NFTs in related-party transactions (e.g., between the LLC owner and the LLC) must be adjusted to market prices to reflect the asset's true value.
  • Deductible expenses: Only losses or expenses arising from genuine transactions directly related to the LLC's activity are deductible.

⚠️ Risks of unjustified operations:

  • Tax simulation: Manipulating prices or artificially generating losses through transactions involving digital assets can be interpreted as tax simulation by tax authorities.
  • Tax fraud: Practices that seek to evade paying taxes through illegitimate transactions can constitute tax fraud, with fines, penalties, and, in serious cases, even criminal proceedings.
  • Scrutiny by the authorities: Both the IRS in the US and the Spanish Tax Agency review transactions involving digital assets and can verify their authenticity and valuation.

💡 Recommendation:

  • Transparency: Conduct all NFT transactions for your LLC transparently and for legitimate business purposes.
  • Rigorous documentation: Keep a thorough record and justification of all transactions involving digital assets.
  • Professional advice: Consult with digital tax and accounting experts to ensure compliance with applicable regulations in the U.S. and your country of residence.

How to open your LLC step by step

If you want to create a LLC (Limited Liability Company) in USAWe make it easy for you. We take care of everything so you can have your business up and running in no time, without paperwork or complications. We work with New Mexico, one of the most advantageous states for LLCs. 🇺🇸

🧭 Step by step
  1. 1 Legal Constitution

    We register your LLC in New Mexico, with commercial address and registered agent.

    ℹ️ Includes Certificate of Formation/Articles, Operating Agreement, and agent registration to receive notifications.
  2. 2 Documentation + EIN

    We prepare the package and manage the SS-4 for your EIN (IRS).

    ℹ️ The IRS usually takes 1–8 weeks Depending on the season, we provide an assignment letter and digital dossier.
  3. 3 Confirmation and use

    You receive your EIN and the LLC is ready to issue contracts and invoices.

    ℹ️ With the EIN + original documents, you can operate and prove the existence of the entity to third parties.
  4. 4 Online banking

    We help you with accounts in mercury either Payoneer.

    ℹ️ Remote onboarding; multi-currency, virtual cards, and real-rate transfers. KYC/AML required.
⏱️ Total estimated time: 1–2 months (depending on the IRS)

⏳ In 1 to 2 months (depending on the IRS), you'll have your LLC ready to operate and enjoy benefits such as:

  • Limited liability protection
  • Management flexibility
  • Operational efficiency and access to global customers

Why New Mexico: It's one of the most popular states for LLCs thanks to its simple formation, low costs, and efficient administrative framework, making it easier to maintain your company and allowing you to focus on growing your business.

Services included in the flat rate

If you want to create a LLC (Limited Liability Company) in USA, we offer you a comprehensive and affordable service to get your business up and running in no time. Our package costs $1,750 per year and will maintain this price until December 31, 2024 for existing customers. 🇺🇸

Includes everything you need:

  • Complete documentation management: We take care of all the legal and tax procedures to create your LLC in New Mexico, one of the most advantageous states. You'll receive your certificate of formation, Operating Agreement, corporate seal, and other key documents.
  • Obtaining the EIN: We manage your Employee Identification Number (equivalent to the CIF in Spain), essential for opening bank accounts, filing taxes, and operating commercially.
  • Registered Agent Included: Required by law in the U.S. to receive official notifications. Ensures security, confidentiality, and legal compliance.
  • Business Address in the USA: Business address for your LLC, useful for invoices, contracts, and correspondence, projecting a professional image in the U.S. market.
  • Annual tax return: IRS advice and filing, optimizing your LLC's tax strategy and facilitating all necessary forms.
  • 1:1 support all year round: Personalized support by phone, email, or chat to answer any questions you may have about managing your LLC.
  • Priority registration in NeoBank: Exclusive link to open an online account in the U.S. with no fees or minimum requirements, and the ability to receive and send payments in multiple currencies at the real exchange rate.

This plan simplifies administration and ensures that your LLC properly complies with all of its tax and legal obligations in the United States. You'll enjoy benefits such as limited liability protection, operational efficiency and ease of management for your global business. 🙌

📂 Documentation you will receive

When you hire our LLC creation and management service in the U.S., we provide you with the key documents to prove its legal existence, open a bank, and comply with regulations.

1

EIN (Employer Identification Number)

IRS Fiscal ID

Tax identification number issued by the IRS. Required for banking and tax returns.

ℹ️ Includes an EIN assignment letter (CP 575 or 147C, if applicable). You can use it to activate banks and suppliers.
2

SS-4 (EIN Application)

IRS Application

Copy of the form filed with the IRS. Useful for banking procedures and verifications.

ℹ️ Supports the data used for the EIN (legal name, address, entity type, and responsible party).
3

Certificate of Training / Articles

State Constitution

Official state document (New Mexico). It verifies name, date, and registration information.

ℹ️ It serves to demonstrate legal existence to third parties and for registration with suppliers or payment gateways.
4

Agreement

Internal Governance

Internal rules of the LLC. Essential for demonstrating structure and separation, key if you pay taxes in Spain.

ℹ️ Defines membership, powers of the manager, distribution of benefits and limits of liability.
5

Contract with the Manager (if applicable)

Effective direction US Ops

It formalizes management in the US and reinforces that effective management is outside of Spain.

ℹ️ Includes scope, reporting, fees, and operational evidence (for banks and, if applicable, inspections).
6

Founder's Declaration

Legal separation Privacy

The organizer designates the member and relinquishes control. This reinforces separation and privacy.

ℹ️ It does not constitute the LLC itself, but it documents the transition and who holds corporate control.
7

BE-13C (Foreign Investment)

BEA Compliance

Report to the BEA when the owner is foreign. Record the investment and maintain compliance.

ℹ️ Depending on the case/threshold, it may not apply. If applicable, we prepare and submit it ourselves.
8

Simple Accounting Excel

Tool Management

Basic Excel template for recording income, expenses, and calculating profits easily.

ℹ️ Includes preconfigured formulas and LLC-adapted categories. Ideal for managing your business without complex software.
9

Bank registration links and other information of interest

Banking Resources

Shortcuts and guides for opening accounts with Mercury, Payoneer, and others, plus helpful information for your LLC.

ℹ️ Includes official bank registration links, a document checklist, and links to relevant U.S. agencies.
✅ With this set, your LLC can operate, open banking, and comply with regulations seamlessly. Depending on the case, some documents may not be necessary or may require additional information.

Starting an LLC on your own: brave or reckless?

Setting up an LLC in the US on your own can seem like an epic adventure. But if you do it without a map or compass—without knowing exactly where you're sailing—you can easily end up running aground in murky tax waters. 🏴‍☠️

Without experience, you're flying blind. And that, in international taxation, isn't romanticism... it's real risk.

For example:

  • 💥 Fines for not correctly filing Form 5472 (yes, the one that almost no one mentions) or the BE-13C can exceed 25.000 $It's like hitting an invisible iceberg: you don't see it coming... until it's too late.

⏳ Time, mistakes and pitfalls (which cost money)

Many people jump into creating an LLC thinking it's a simple "click, click, and done." But without prior training, it will take you weeks (or months) to understand:

  • Federal tax obligations.
  • The most suitable type of LLC (SMLLC, multi-member, manager-managed…)
  • What forms you need to file and when (and the fines of up to 25,000 $ for “forgetting”).

And there's more:

  • The most common mistake is to forget the AgreementWithout it, your LLC is like a ship without a rudder: no legal direction, no protection, and easier to sink if the IRS comes calling.

Being able to sleep well at night… is priceless.

⚠️ Maintenance is not optional

Even if you set up your LLC properly, that's just the beginning. After that, you need to maintain it:

  • Renew the registered agent.
  • Submit forms to the IRS (5472, 1120…).
  • Reports to FinCEN and the BEA.
  • Maintain valid operating address.
  • Support for unforeseen events and queries.
  • Keep accounting records.

➡️ All of this has to be done every year. And if you don't, they won't let you know: you are sanctioned.

🚀 The difference between a hobby and a serious business

Are you building a spontaneous venture or a solid foundation for financial freedom?

With our service, you not only get help creating your LLC:

  • You have a captain on board.
  • We take care of the paperwork, deadlines, forms, and communication with the U.S.
  • You just focus on what you do best: growing your business.

✅ Ready to sail without fear?

  • No tax errors that ruin your year.
  • No worries with the Treasury or the IRS.
  • No sleepless nights.

Your LLC, well done, it's your ship.
Us, your on-board team.
AND USA, the ocean where you can play with advantage.

Are you coming on board? 🌊

Being able to sleep well at night… It is priceless.

📖 Glossary of key terms

  • Registered Agent: A person or company in the U.S. responsible for receiving legal and government notifications on behalf of the LLC. One is required to form and maintain an active LLC.
  • BEA (Bureau of Economic Analysis): A U.S. agency that requires information reports (such as BE-13 or BE-10) if there is foreign direct investment in the U.S. Non-compliance may result in sanctions.
  • Ultimate Beneficiary Owner (UBO): A natural person who directly or indirectly owns or controls an entity, whether by ownership or significant influence.
  • Net profitTotal income less deductible expenses; basis for calculating pass-through or corporate tax.
  • BOIR (Beneficial Ownership Information Report): Mandatory form from 2024 to 2025 to report the beneficial owner of an LLC to FinCEN (it is no longer mandatory).
  • CRS (Common Reporting Standard): International system for the automatic exchange of financial information between participating jurisdictions for tax purposes.
  • Double Taxation Agreement (DTA): Treaty between countries to prevent taxpayers from paying taxes twice on the same income.
  • Self-Employed Fee: Fixed monthly amount that self-employed workers in Spain must pay to contribute to Social Security, regardless of their income.
  • DGT (General Directorate of Taxes): Spanish body that issues binding consultations on the interpretation of tax regulations.
  • Business Address: Physical address in the U.S. that serves as the LLC's administrative headquarters. This is different from the registered address or the owner's address.
  • Distribution of benefits: Transfer of profits earned by an entity to its owners. Its formalization and taxation vary depending on the legislation of each jurisdiction.
  • EIN (Employer Identification Number): IRS-issued tax number required to operate your LLC, open bank accounts, and file returns.
  • Disregarded Single-Member Entity: A single-member LLC, treated for tax purposes as a transparent entity in the U.S., whose profits are attributed directly to the owner.
  • Permanent Establishment (PE): Sufficient physical presence (offices, employees, warehouses, machinery) that generates tax obligations in a specific country.
  • Usufruct strategy: A legal model in which the use and enjoyment of an asset (such as real estate or a vehicle) is transferred to one person, while legal ownership remains with another entity. Its tax treatment depends on the legislation of each jurisdiction.
  • ETBUS (Engaged in Trade or Business in the United States): Sufficient economic activity in the U.S. to generate specific tax obligations there, such as filing Form 1120-F.
  • FinCEN (Financial Crimes Enforcement Network): Agency of the U.S. Department of the Treasury that oversees financial crimes. It administers the BOIR and regulates the use of entities to prevent money laundering.
  • Form 1120: US Corporate Tax Return Accompanying Form 5472 for Non-Resident LLCs.
  • Form 1120-F: Corporate tax return for foreign companies that are considered ETBUS.
  • Form 5472: Mandatory U.S. information form for foreign single-member or foreign related-party LLCs.
  • Deductible expenses: Costs directly related to business activity that reduce the tax base and, therefore, tax payments.
  • Holding company: An entity that owns shares in other companies (for example, an LLC that owns other LLCs). It is used to hierarchically structure businesses, optimize taxation, and separate risks.
  • Personal Income Tax (IRPF): Spanish personal tax that taxes the income earned by individuals who are tax residents in Spain.
  • IRS (Internal Revenue Service): U.S. Internal Revenue Service responsible for managing federal taxes and enforcing tax regulations.
  • European VAT (OSS – One-Stop Shop): Simplified system for declaring and paying VAT on online sales within the EU to end customers.
  • Jurisdiction: Place or territory under whose law a company is established, regulated and taxed.
  • LLC (Limited Liability Company): American limited liability company. It offers limited asset protection and management flexibility, making it a versatile structure for digital and service businesses.
  • Manager: Person or entity designated to formally manage the LLC in its jurisdiction of incorporation, exercising effective management of the company.
  • Merchant of Record (MoR): A service that manages international sales on behalf of the seller, handling collections, invoicing, and the payment of taxes such as VAT.
  • Model 100: Annual income tax return in Spain, which includes the income attributed from the LLC (in section E).
  • Model 720: Declaration of foreign assets, relevant if the LLC's bank account balance exceeds €50,000 or if other foreign assets are held.
  • Non-Dom (Non-Domiciled Regime): Special tax regime applied in some jurisdictions, which grants particular tax treatment to income generated outside the country or not remitted to it, according to specific legislation.
  • Operating Agreement (OA): A fundamental internal document of an LLC that establishes its operating rules, management, and member rights. It is essential for the internal organization and legal security of the company.
  • Pass-through (Transparent Entity): A type of tax entity that does not pay taxes at the corporate level, but instead passes its profits or losses directly on to its owner.
  • Income Attribution Regime (RAR): Spanish tax regime that directly attributes the profits of a transparent entity to the personal income tax of its members.
  • World Income: A tax system in which you pay taxes in your country of residence on all your income, regardless of where it is generated (such as in Spain).
  • Land Income: Tax regime where you only pay taxes on income generated within the country (e.g. Panama, Paraguay).
  • Effective residence or effective address: The location from which the company's key decisions are made. In Spain, if the effective management is in Spanish territory, the Treasury may consider the company to be a tax resident there.
  • Tax residency: Country where a person or company has a legal obligation to pay taxes, usually based on criteria such as days of residence, domicile or effective address.
  • SS-4: Official form to apply for an EIN from the IRS.

📚 Useful resources and links

Official websites and legislation:

Tax and accounting tools:

European VAT management strategies:

  • Paddle – Merchant of Record for B2C sales and simplified VAT management
  • Lemon Squeezy – Alternative for VAT management in Europe
  • Hotmart – Platform for the sale and distribution of digital products with an affiliate network

Official resources from other jurisdictions / international taxation:

Recommended guides, resources and services:

Extra: European legislation and directives

🙋‍♂️FAQ - Frequently Asked Questions

You cannot have salaried employees in Spain hired directly by your LLC, as this would create a "Permanent Establishment" and require you to pay taxes as a Spanish company.
However, you can hire freelancers, as long as they don't work exclusively for you or use permanent physical facilities in your name.

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.

The LLC is a versatile structure for digital entrepreneurs and non-physical businesses with a global clientele. It offers benefits such as limited liability protection, management flexibility, access to US financial markets, and operational efficiency for your global expansion. It's important to evaluate the compatibility of your business with the structure to ensure regulatory compliance.

If your business has a physical presence or Permanent Establishment in Spain (e.g., a restaurant, brick-and-mortar location, salaried employees), an LLC alone is not sufficient. In these cases, an LLC can complement a local entity (such as a Spanish limited company) for the international or digital aspect of its activities, ensuring compliance with the tax regulations of both countries.

  • During each tax return in Spain, in the personal income tax you must indicate in the section “Income allocation regime” the data of your LLC and your profits for that fiscal year.

  • 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.

  • 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.

Counting from the year you founded the company and every 5 years, you must fill out a BEA report:

  • BE-13: This form allows the Bureau of Economic Analysis to know how much money enters and leaves the country through companies.

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.

  • FIRPTA 8288-B: If you are a foreigner, or an international investor, you must take into account the tax withholding on the sale of FIRPTA properties.

VAT management for an LLC operating internationally depends on the nature of the services/products and the location of the customers. For B2B services, reverse charge tax may apply. For B2C services in the EU, there are regimes such as OSS. It is crucial to ensure compliance with the tax regulations applicable in each jurisdiction. Consult an expert for your specific case.

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:

  1. Common Deductible Expenses:

    • Office expenses: Rent, office supplies, utilities.
    • Personal expenses: Salaries, benefits, training.
    • Equipment and Supplies: Purchase and maintenance of equipment, business supplies.
    • Business trip: Transportation expenses, accommodation, business-related meals.
    • Marketing and publicity: Costs associated with business promotion.
    • Interest and Commissions: Interest on business loans and credit cards.

  2. Automobile Expenses: If the LLC uses vehicles for business purposes, it is possible to deduct automobile-related expenses, such as gasoline, maintenance, and depreciation.

  3. Business Education Costs: Costs associated with continuing education or business-specific training may be deductible.

  4. Commercial Insurance: Insurance premiums for commercial coverage, such as liability insurance, may be deductible.

  5. Charitable Contributions: Donations to charities may be deductible if they meet certain requirements.

  6. 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.

If you receive a notification from the tax authorities, it's essential to remain calm and prepare documentation demonstrating your LLC's compliance with applicable regulations. This includes the Operating Agreement, management contracts, bank statements and accounting records, and US tax forms. It's crucial to prove the LLC's effective management outside of Spain and that a Permanent Establishment has not been established in your country of residence. Always seek the assistance of a specialized tax advisor.

Yes you can, but keep in mind that any profit generated from crypto or NFT transactions must be declared on your Spanish personal income tax return under the income attribution regime. The Treasury closely monitors these activities, so keep accurate documentation of all transactions.

The easiest way is to use platforms like Wise, Payoneer or Stripe, which allow you to receive payments in euros, easily convert currencies, and transfer funds to your European bank account from the LLC.

YeahEven if you don't have any profits, you'll need to file information forms 5472 and 1120 in the U.S. each year to keep your LLC active.
In Spain, if you don't have any real profits, you won't be required to pay personal income tax, although it's a good idea to keep supporting documents to prove your lack of income.

It is not legally mandatory in all states, but it is highly recommended. The Operating Agreement protects your limited liability, strengthens your position against tax audits, and prevents misunderstandings about who actually exercises effective management of the company.

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In LLC.Devil.MarketingWe 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 final say lies with the banks and 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.

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