2025 Edition
In today's "dynamic" economic landscape, digital entrepreneurs and service professionals face constant challenges: from the complexity of international management and the search for efficient structures, until the need to ensure the protection of their assets and the viability of their long-term projects (and especially in the short term, remember that 90% of startups fail, we need all the help available at the beginning).
Ensuring sustainable growth and sound financial planning in a changing global environment requires a clear strategic vision and a deep understanding of the options available internationally.
I'll quickly tell you the case of Carlos, web designer Freelance. Just a year ago, Carlos was faced with the challenge of managing his business in Spain. Today, after setting up a LLC in the USA, has managed to boost its project and, most importantly, significantly improve its resource management and professional growth. 😎 *Each case is unique, and results may vary. Proper management and a strategic approach are essential to achieving success.
That's why we created this The Ultimate Guide to LLCs in Spain: to help you optimize and enhance your business and ensure a solid financial future.
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 rushing through. It will take you between 1 and 2 hours to read it in its entirety, but each section is designed to be read separately and applied at the moment. Read it at your own pace.
[Last updated: June 12, 2025]
Let's start by clarifying that LLC means Limited Liability Company, or “Limited Liability Company” in Spanish. These are very popular and flexible legal business structures for many digital business either freelance. Because? Because they offer the best of both worlds: limited liability (typical of a corporation) and flexible management and taxation (similar to those of a company or a self-employed person), but without so many formalities. 🙌
LLCs are entities pass-through or transparent, which means that the profits they generate at the end of the year pass directly to their owner. That is, they must be taxed and cannot be accumulated without paying taxes. Therefore, LLCs are designed to check in, spend and tax. 💸
In addition, LLCs do not need to have a board of directors or hold annual meetings, which greatly simplifies their management. This feature is especially attractive for small businesses or individual entrepreneurs. 👍
One of the most important benefits of LLCs is “pass-through taxation.” This means that the company's profits and losses are reflected directly on the members' personal tax returns, thus avoiding double taxation to which corporations are subject. 🙌
Limited Liability Company
(Limited Liability Company) Only exists in the United States
The double taxation This is when a company pays taxes on its profits, and then its owners pay taxes again on the dividends they receive in their country of tax residence. This can represent a very high tax burden for entrepreneurs. Therefore, LLCs are an attractive option to avoid this problem.
Passthrough Entity
Profits flow to you automatically at the end of the tax year (The LLC will not “store” money)
The term "pass-through" means that LLCs do not pay corporate taxes; rather, the profits generated go directly into the owners' pockets. For tax purposes, it's as if the company were "transparent." The Treasury considers that these earnings are yours personally from the very beginning.. 💸
This is very different from what happens with traditional companies (for example, limited companies or limited companies in Spain), which pay taxes first on their profits, and then the partners pay taxes again when they receive that money as dividends or payroll. In short, you pay taxes twice on the same amount! 😅
With a "Pass-through" LLC you avoid that double taxation, since the money flows directly to your Personal Income Tax, (Yotax on the Rincome of the Ppeople Fphysical), simplifying your taxation and, in many cases, optimizing your business's tax situation. 🚀
To calculate your exact income tax rate, you must know the applicable tax brackets based on your annual income. In Spain, these brackets typically range from 19% to 47%, depending on your annual income. That's why it's essential to do the math right and maximize every euro! 📈
A quick example: Imagine that your LLC generates €50,000 in profitsAs a "Pass-through" entity, those €50,000 are added directly to your personal tax base. Therefore, you must declare the full amount on your personal income tax return, applying the corresponding bracket according to the scale established by the Treasury each year.
This is how the Pass-through is translated visually:
American LLC (in the USA)
│
▼
Annual benefits (billing – deductible expenses)
│
▼
Personal Income Tax in Spain (Income Attribution Regime)
│
▼
Tax return in Spain (Form 100 – IRPF)
Imagine that this year your LLC has a turnover of €60,000 and you have had €15,000 in deductible expenses. The result is €45,000 in profits that automatically go to you, its sole member.
This means that you must declare those €45,000 in Spain directly in your personal income tax, in the section “Régimen de Atribución de Rentas”. The LLC itself will not pay taxes, it only reports to the IRS through Form 5472 and 1120.
In summary, your LLC:
Does NOT pay taxes in the USA. (just informs)
YEAH You must pay taxes on these profits in Spain, directly in your personal income tax as income from economic activities, according to the corresponding brackets.
⚠️ Important note: Even if you don't withdraw money from the LLC, the annual profits must still be reported.
Checklist to comply without errors:
✅ Keep all receipts for your deductible expenses.
✅ Prepare Form 5472 (informative) for the USA.
✅ Declare your profits in the Spanish Personal Income Tax (Form 100).
✅ Rely on a manager to make sure everything is correct.
To calculate the Personal income tax to pay if you have an LLC, you must apply the established sections according to the income level. These sections vary depending on the CCAA in which the owner of the LLC resides in Spain, so it is important to consult the regulations of each one. 📋
Let's see an example with the sections of Spain in 2025 in CataloniaLet's say you have a turnover of €50,000 and €10,000 in deductible expenses. You then have €40,000 in profit at the end of the year, and you'll pay tax on that amount. To do this, we'll apply the brackets in the following table:
| Personal income tax sections 2024 | State type | Autonomous type | Total type |
|---|---|---|---|
| Up to €12,450 | 9,5 % | 12 % | 21,5 % |
| From €12,450 to €20,200 | 12 % | 14 % | 26 % |
| From €20,200 to €35,200 | 15 % | 18,5 % | 33,5 % |
| From €35,200 to €60,000 | 18,5 % | 21,5 % | 40 % |
| From €60,000 to €300,000 | 22,5 % | 23,5 % | 46 % |
| More than €300,000 | 24,5 % | 25,5 % | 50 % |
Another example, of the total of Income tax to pay of €40,000 in profits, applying the IRPF 2025 sections:
First stretch: Until 12.450 euros, HE applies a 21,5%. This it turns out in a total to pay of 12,450 ×21.5% =2,676.75 euros.
Second stretch: Between 12.450 and 20.200 euros, HE applies a 26%. He stretch covers 7.750 euros (20,200 −12.450), resulting in 7,750 ×26% =2.015 euros.
Third stretch: Of 20.200 to 35.200 euros, he guy is of the 33,5%. This stretch understands 15.000 euros (35,200 −20,200), with a total of 15,000 ×33.5% =5.025 euros.
Room stretch: Finally, of 35.200 to 40.000 euros, HE taxes to the 40%. This HE applies about 4.800 euros (40,000 −35,200), generating 4,800 ×40% =1920 euros.
Adding the values of each stretch, he total of the Income Tax to pay I would be 2,676.75 +2.015 +5.025 +1,920 =11.636,75 euros.
By it so much, with 40.000 euros of benefits in 2025, he total to pay of Income Tax would ascend to 11.636,75 euros (a 29,1% of the total).
Do you think taxes in Spain are being used fairly? Click here and draw your own conclusions.
An LLC Disregarded Single-Member A single-member partnership is a corporation that, for U.S. tax purposes, is considered a "disregarded" separate entity. This means it doesn't file taxes as a business, but rather all profits, losses, and expenses are attributed directly to the owner, who reports them on his or her personal tax return. This is a very useful structure for those seeking tax simplicity and liability protection without having to comply with the formalities of a corporation.
Main characteristics of a Disregarded Single-Member LLC:
Pass-through Taxation:
LLC profits or losses are not taxed at the corporate level; they are passed directly to the owner's personal tax return. This simplifies taxation by avoiding double corporate and personal taxation. 💸
Limited Liability:
Protects the owner's personal assets from potential debts, obligations, or liabilities arising from the LLC's activities. 😊
Fewer corporate formalities:
Unlike a traditional corporation, it is not required to hold annual meetings, keep detailed minutes, or comply with certain strict formal requirements.
Customizable operating agreements:
You can freely define the internal rules for the operation and management of the LLC through an Operating Agreement tailored to your specific needs. 🙌
Without permanent establishment in Spain:
To maintain its tax advantages, the LLC cannot have offices, real estate, or directly hired salaried employees in Spain, although it can work with freelancers. 🤔
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
Protection of your personal assets
This type of limited liability implies that the owner of the LLC and his personal assets are protected from problems financial or legal that may arise in different situations. This burden falls on the company, as the LLC is a legal person, similar to an SL.
In this case, the risk would only affect the company assets and not to those of their owners. Unlike if you act as a self-employed person, where you and your business are the same for legal purposes and your personal assets may be affected.
But be careful: if the owner offers personal guarantees for a loan of the company, it could also be personally responsible of that debt. 😮
As you can see, the limited liability It is a great advantage of LLCs, but it is not absoluteThere are certain circumstances in which you may lose the protection of your personal assets and be liable for damages from your assets. Therefore, it is important that you are prudent and responsible when managing your LLC, and that you do not incur in illegal, fraudulent or negligent activities that could compromise your safety.
One of the most common myths among those who manage an LLC Disregarded is to think that bank accounts must be left empty at the end of the fiscal year to avoid paying taxes.
❌ Nothing could be further from the truth.
What really matters it is not the balance of the bank account, but the net profit: the difference between income and expenses during the year. That is:
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:
🚫 You can't deduce:
💡 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?
🧾 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.
If you're an entrepreneur in Spain (or outside of Europe) and you're involved in digital businesses with a global clientele, you might be interested to know that there's a legal structure that can offer you many advantages: the LLC. 🙌
The LLC is a limited liability company that is created in the United States and that allows you Optimize your management, boost your growth and safeguard your resources.
But not all activities are suitable for an LLC. There are some profiles that can benefit more from this option than others. These are:
Basically this
If this is your routine, the LLC is your best friend.
There are some profiles of digital entrepreneurs who can benefit from opening an LLC in the USA. However, this It does not mean that it is a valid option for all cases.Before deciding on this legal structure, you should carefully evaluate your situation, your business, your clientele, and your goals. You should also inform yourself about the tax, legal, and administrative obligations involved in having an LLC, both in the United States and in Spain. Therefore, I advise you to consult with us so we can guide you through the advantages and disadvantages of this option and help you create and maintain your LLC legally and securely.
An LLC is not for everyone
If you are on this list... we are very sorry 🙁
Although LLCs offer a flexible and beneficial structure for the digital entrepreneur, Its suitability depends on the nature of your business and your tax residency. To operate with complete legal certainty, it's essential to understand which business models are compatible with an LLC. under the legal framework of the U.S. and your country of residence.
Within the legal framework of Spain and the United States, Only certain types of activities really benefit from this vehicleThe key is not to generate permanent establishment in Spain nor be considered ETBUS (Engaged in Trade or Business in the US) in the United States.
| Type of business / activity | Compatible with an LLC? | Main reason |
|---|---|---|
| 100% Digital Services (consulting, marketing, online training) | ✅ Yes | There is no physical presence or EP in Spain, outsourceable |
| Sale of digital products (ebooks, courses, software, etc.) | ✅ Yes | Automatable, without direct intervention of the tax resident |
| Ecommerce with outsourced logistics (Amazon FBA, dropshipping) | ✅ Yes | Without warehouses or employees of its own in Spain |
| Clinical psychology, medicine, physiotherapy, etc. | ❌ No | Highly personal professions, which cannot be delegated, imply EP |
| Electrician, carpenter, locksmith, plumber, etc. | ❌ No | On-site and non-transferable work in Spanish territory |
| Restaurant, cafeteria, bar, hair salon, spa, gym | ❌ No | Local open to the public, guaranteed EP |
| Physical store in Spain | ❌ No | Fixed presence, employees, physical inventory |
| Photographer who works in events or in-person sessions | ❌ No | In-person service, not outsourceable |
| Online coach or therapist (unregulated) | ⚠️ It depends | It may be viable if it does not require membership and is 100% online and delegable. |
| Influencer or digital content creator | ✅ Yes | Digital model, without employees or office in Spain |
| Online training (academies, memberships, courses) | ✅ Yes | Externalizable, 100% digital, without EP |
🛠 What alternative do you have?
If you are in any of these cases, an LLC on its own is not the solution. But you can consider:
Using an SL in Spain for those physical activities.
Supplement it with an LLC for digital tasks, marketing, international expansion, etc.
This way, you can separate risks, optimize your taxes, and comply with the regulations of both countries. 💡
ETBUS (ANDngaged in Trade or business in the ORnited Yestates) is the label the IRS applies to decide whether a foreign entity—including your LLC—is doing “real business” in the U.S. and therefore if you have to pay taxes there.
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 looked at on a case-by-case basis, but the most common scenarios are:
Physical presence in the US
If you have an office, employees, warehouses, etc.
👉 This isn't usually applied in digital structures like yours, so you can ignore this point.
Income from US sources
E.g.: rents, interest from American banks, royalties, etc.
👉 If you sell services from abroad to clients in the US, there may be nuances here. It's not always considered "effectively connected," but If the activity is regular, directed to the US and you have many American clients, the IRS may consider you ETBUS.
Significant economic activity within the U.S.
There's no official "$1M" threshold. What matters is whether your business consistently and substantially sells to US customers.
👉 If you only have occasional sales or your American revenue is small, it's unlikely you'll be considered an ETBUS. But if your business is growing significantly there, it's best to consult with a specialized tax advisor before taking the plunge.
What if I'm ETBUS?
So, does ETBUS affect me?
👉 If you sell digital services and are outside the US, you are most likely NOT ETBUS.
👉 As long as you have no physical presence or income from specifically US sources, you have no tax obligations in the US. beyond certain information forms (such as 5472).
The ETBUS concept is not the only one that affects the taxation of foreign companies in the US. There are other factors that can influence the tax burden of your business, such as the type of entity, the tax treaty between your country and the US. ., and the deductions and credits available. Before starting or expanding your activity in the US, consult with a tax advisor specialized in the US market. 😊
Create an LLC (Limited Liability Company) can be a good option for entrepreneurs and digital companies looking to optimize their structure for global expansion and efficiency. Below, we explore key reasons to consider this legal form: 😍
)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 who will help you choose the best option for your business and ensure compliance with all your obligations.
To simplify and centralize VAT management for B2C sales to multiple European countries, an excellent option is to use a Merchant of Record (MoR) such as Hotmar, Paddle, or Lemon Squeezy. These platforms act as the official seller for the end customer and are responsible for ensuring proper VAT compliance by:
This solution is ideal for B2C sellers in Europe looking to offload the administrative complexity of VAT, allowing them to focus on growing their digital businesses, such as subscriptions, software, or information products.
However, for B2B sales, it is not necessary to resort to these services, since the reverse charge already allows operations without VAT in most cases.
A Anonymous LLC It is a company registered in states such as New Mexico, Delaware or Wyoming, where the owner's name is not published in public records. This level of privacy can be useful in certain sectors, such as cryptocurrencies, the computer security or brand protection, where strategic anonymity is an added value.
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:
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 related (Mercadona, rentals, holiday trips… you know).
❌ It does not protect you from the Treasury if you make transactions without justification. between LLC accounts and 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:
But whenever correctly declare your income and fulfill your tax obligations as a Spanish taxpayer.
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. 😊
⚠️ It's essential to understand the responsibilities of operating an LLC. Lack of knowledge or failure to comply with regulations can pose significant risks. Our goal is to help you understand the importance of always operating within the legal framework to prevent potential consequences.
Common Risks of Non-Compliance:
Keys to Strong Compliance:
Remember: Complying with your tax obligations isn't optional; it's the foundation of legal security and the sustainability of your global business.
Start a business in the United States is much more simple and digitized compared to other countries, where procedures are usually in person and more complex. So cheer up, these requirements will be included in our service! 🙌 To open an LLC in the US, these requirements must be met, if you meet them the process will be fast and 100% online:
The requirements for opening an LLC in the US may vary depending on the state where you register it. Some states have stricter or more flexible rules than others, which can affect the protection, taxation and management of your business. Before choosing a state for your LLC, compare the advantages and disadvantages of each and choose the one that best suits your needs. 😊
USA It is a very destination attractive for entrepreneurs who want establish an LLC (Limited Liability Company). The process is economical, fast and simple, and offers a series of both fiscal and operational benefits. 
The LLC is a legal form that was created in the United States to provide a legal solution to the self-employed who had a business with a moderate level of income. However, over time, the LLC has gone evolving and has become a very popular option for all types of companies, even those that manage million dollar transactions. Additionally, the LLC allows non-resident foreigners They can create and manage a company in the United States without having to travel to the country. 😎
But the United States is not the only country that offers facilities to create a company from abroad. There are other options that may also be interesting, depending on your goals and needs. For example:
There are other countries that also offer options to create a company from abroad, such as Singapore, Hong Kong or Cyprus. Before deciding on one country or another, compare the advantages and disadvantages of each, and consult with an expert in international taxation to help you choose the best option for your business.
Have a company in the United States means having to comply with two tax administrations different: the Spanish and the American. 
There is an agreement between Spain and the United States to avoid double taxation. This agreement allows you to deduct the taxes you have paid in the United States from those you have to pay in Spain, as long as you present Form 1040-NR with the ITIN. Before filing your tax return, consult with a tax advisor specialized in the US market.
Institute Revenue Service
There you only inform, information is power.
The IRS (Internal Revenue Service) is the United States tax agency, and has different rules for LLCs depending on the number of members and the tax options they choose.
We will help you create a Sole Proprietorship LLC in your name, since these are the ones They will not pay taxes in the US., only in your country of tax residence, as long as you meet certain requirements, such as not having employees or offices in the US 😊
The IRS has an agreement with the Spanish Tax Agency to exchange information on the activities of foreign companies in the US. This means that you must comply with your tax obligations in both countries and avoid any type of fraud or tax evasion.
Spain and the United States They have an agreement so that citizens and companies that make money in both countries do not have to pay taxes twice for the same. The objective is to put clear rules about where and how much they should pay, and so on promote trade and investment between the two nations. 🤝
Think that you are from one country and earn money in another. This agreement tells you that you may not have to pay taxes in the country where you earned that money. For example, if you are Spanish and earn something in the United States, you may not have to share your earnings with the US government.
But if you already paid taxes in the United States, this agreement helps you not hurt as much in Spain. Can deduct what you paid in the United States than what you have to pay in Spain for that same money. This prevents your pocket from suffering from paying taxes twice for the same thing in two different places. 💶
If you want more details, you can consult the “Double taxation agreement signed by Spain with the US” which came into force on February 22, 1990. 📄
This agreement also includes other advantages, such as the elimination of double taxation on dividends, interest and royalties, or the reduction of withholding at source. Before doing business between Spain and the United States, be well informed about the conditions and benefits of this agreement. You can also count on a tax advisor specialized in the US market.
Entities in the income attribution regime (RAR) They are those that do not pay taxes as an entity, but rather their income is distributed among its members, who declare it on their personal taxes. 📋
Also applies to some foreign entities, such as American Single Member Disregarded LLCs, which operate in Spain and pay taxes in an equivalent manner. 🌐
The objective of this regime is to avoid double taxation of income, both at the entity and partner level, and follow the principle of tax transparency.
📌 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:
Yes, you must declare the profits of the LLC on Form 100., in it Section E (Special regimes | Income allocation regime).
The LLC meets the requirements to be treated as an entity under the income attribution regime in Spain (according to the resolution of 6/2/2020).
Although the model only allows up to 99%, This does not exempt you from declaring the 100% on your income.The important thing is that you pay taxes on everything you generate.
The returns must pay taxes as an economic activity in the income of the resident partner (form 100).
The LLC, having a sole partner resident in Spain, cannot benefit from the Double Taxation Agreement (DTA) between Spain and the USA
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:
Divide it by 0.99:
100,000 / 0.99 = €101,010.10
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 entered.
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.
[Remember that eYou are responsible for ensuring that all the information you provide is correct 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:
Having these documents will facilitate the filing process and ensure that you are prepared for any requests for additional information from the tax authorities.
When operating your business internationally, it's essential to consider how to manage your social security and plan for your long-term future. An LLC offers you flexibility in your business structure, which requires a personalized strategy for your future well-being.
Key Considerations for Your Financial Future:
Factors to Evaluate: Before choosing a strategy, it's essential to analyze factors such as liquidity, investment taxation in your country of residence, expected returns, and associated fees.
Professional Advice: Given the complexity of international financial planning, it's crucial to consult with a specialized financial advisor to define the optimal strategy that best suits your needs and ensures compliance with all regulations.
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) This is what determines whether the Treasury can treat your LLC as a 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:
✅ If you DO NOT have an EP, the LLC does not pay taxes in Spain as a company.
Yeah:
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 on behalf of the LLC as a dependent representative from Spain (for example, signing contracts in person, negotiating regularly with clients, or performing direct commercial functions in Spanish territory)
➡️ Then 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 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 a greater operational efficiency and legal security if everything is well set up and managed.
Did you know there are over 2 million LLCs registered in the US? LLCs are very popular among American entrepreneurs because they offer them great flexibility and protection.
Establishing an international presence with your LLC requires a thorough 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 varies significantly 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 a transparent entity (passthrough), In others it may be irrelevant, or even considered opaque and 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:
Choosing your tax residence is a strategic decision that directly impacts the management of your LLC and your tax obligations. Different countries offer unique regulatory and tax frameworks that should be evaluated based on your business and corporate objectives, as well as the treatment of your international structure.
It is crucial to perform an individualized analysis to:
Each jurisdiction has its own characteristics regarding its legal framework, residency requirements, and tax treaties. When considering a change of residence, it's vital to investigate how these regulations interact with your business structure and overall revenue.
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 comply with all your obligations. Good planning involves choosing the setting where your business shines. always within the legal framework.
Even if your LLC is registered in the US and does not have permanent establishment in Spain, it is essential to consider the concept of effective directionIf your company's management and control are located in Spain, the Treasury could consider it a tax resident in Spain, with the resulting 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 does not have a registered office in Spain
✅ But You manage everything from home, the Treasury could say that YEAH has Spanish tax residency.
One way to ensure that the The effective address of your LLC is located outside of Spain is to formally delegate your management in an external and professional figure: the managerA professional manager is a American legal entity that:
🤔 Strengthening the Structure for Compliance
Delegating effective management to a professional manager is a key measure to strengthen the validity of your LLC operating outside of Spain for tax purposes. For legal and documentary purposes, your LLC is transparently managed from the US.
It's important to remember that the interpretation and application of tax regulations can be complex and subject to change. Therefore, formalizing effective governance with a manager adds a layer of legal security to your structure.
However, because the interpretation and application of tax regulations can be complex and subject to change, it is advisable to consult with a certified tax professional for specific and up-to-date advice.
As managers of your LLC, we take care of the administrative and operational management of your company from the USA, ensuring its legal and tax compliance in that jurisdiction. This service is designed to offer you peace of mind and efficiency, allowing you to focus on the strategic growth of your business.
📝 All this is formalized through 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 contract may be presented in case of inspection as evidence of the operational framework.
🛠️ Creation and maintenance of the LLC
We take care of setting up your LLC, processing your EIN, and ensuring you comply with all required legal and corporate obligations in the U.S.
📋 Operational Management and Compliance in the U.S.
We oversee the legal and tax status of the entity, keeping records up-to-date and processing the necessary forms. We handle annual returns with the IRS (Form 5472, 1120), FinCEN, and BEA (BE-13, if applicable), as well as renewing the registered agent and any other federal or state requirements.
🤝 Support and Coordination
We offer ongoing support to resolve questions and coordinate procedures, assisting you with any requirements or processes that arise.
💬 Communication and ongoing support
We are available to answer questions, coordinate arrangements, and assist you with any request or inspection.
🎯 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 company operates with solidity and compliant with US regulations.
He Agreement An LLC (LLC) is the fundamental internal document that governs the operation and management of your LLC. Although its formalization is not mandatory in many US states, its proper drafting is essential to establish a solid structure, define roles, and ensure the legal security of your global business. 🔥
What is OA for?
The OA establishes:
✅ The rules of operation of the LLC. It defines how decisions are made, profits are distributed and the company is managed.
✅ The role of the owner and the manager. In a single-member LLC (single-member), the owner can manage it directly or delegate administration to a third party.
✅ That the effective management of the company is in the USA. This is key to prevent the Treasury from considering the LLC as a tax resident in Spain.
✅ The protection of limited liability. Ensures that the company's debts and obligations do not affect the owner's personal assets.
Your LLC's OA if you use a US manager.
If you are looking forensure that the effective management of your LLC is in the U.S. and strengthen its legal structure, the OA can formalize the delegation of certain management functions to a professional manager in the US.
A well-structured OA with a professional manager should include the following:
Importance for Legal Security and Taxation:
A properly drafted LLC and a professional US manager are key elements in demonstrating the substance and effective management of your LLC in its jurisdiction of incorporation. This helps ensure your structure complies with international regulations and consolidates the legal security of your global business.
Having a detailed and clear OA allows you to present a solid and coherent structure, essential for management and responding to any information requests. It is the legal backbone of your LLC's transparent and efficient operation.
If you receive a notice from the IRS informing you of an inspection or investigation related to your LLC in the US, take a deep breath and follow these practical steps to get through the process successfully:
1️⃣ Keep Calm and Organize Your Documentation:
2️⃣ Understand the Key Review Areas:
3️⃣ Collaborate and Respond Accurately:
4️⃣ Seek Specialized Support:
📌Remember: A well-managed structure and proactive compliance are your best defense against any tax requirement. Transparency is the foundation of legal certainty and the sustainability of your global business.
Good luck, you've got it all under control! 💪🚀
Did you know that the first LLC (Limited Liability Company) was created in Wyoming in 1977? It was an innovative idea that soon spread throughout USA, since it offered many benefits for entrepreneurs. 🚀
By the 1990s, almost all states had adopted this legal figure, which combined the best of partnerships and corporations. Thus, a consistent legal framework was created so that entrepreneurs could choose this flexible and protective business form. 🙌
Today, LLCs remain very popular, especially in the context of digital commerce and global entrepreneurship. This is because they offer an optimal balance between the protection of a corporation and the simplicity of a personal partnership. In addition, they are characterized by their efficient organizational structure, simplified regulatory requirements and the elimination of double taxation typical of traditional corporations. With these factors, LLCs have positioned themselves as a preferred option for businesses seeking to expand internationally and for digital startups that value speed and the reduction of bureaucracy. 🌎
Are there some states that are more advantageous than others for creating an LLC? For example, Delaware, Wyoming, and New Mexico are some of the most popular, as they have very business-friendly laws, very low taxes, and high confidentiality. If you want to create an LLC in the US, we will always recommend New Mexico.
If you want to create a LLC (Limited Liability Company) in USA, you have to choose carefully the state where you are going to register it. Not all states offer the same conditions and benefits for LLCs. There are some that stand out for their tax, legal and administrative advantages.
Among the most favorable states for LLCs, there are three that stand out: New Mexico, Wyoming and Delaware. These states offer various advantages that may be attractive to Spanish entrepreneurs, depending on their specific needs and objectives. 🙌
When operating your LLC in the US, it is important to understand how the Sales Tax (sales tax) may apply to digital services, depending on the state. The regulations regarding this tax can be complex, and it's critical to ensure proper compliance.
Application of Sales Tax in Digital Services: Some US states, such as New Mexico, apply a sales tax to digital services. This means that certain digital service providers may be charged this tax if your LLC's registered address is in a state with an applicable sales tax.
Determination of the Obligation: A Single-Member Disregarded LLC, without a permanent establishment in the U.S., is generally not subject to Sales Tax. However, some providers apply this tax by default based on the registered address.
Strategies for Correct Compliance:
Importance of Counseling: Given the complexity of state-by-state sales tax laws, it's crucial to consult with a tax advisor specializing in U.S. taxation to ensure your LLC properly complies with all its obligations and avoids undue charges.
If you are a Spanish resident and want to create a company in USA, one of the best options is LLC (Limited Liability Company). It is a legal form that allows you to own a foreign company without legal or tax problems. 🇺🇸
One of the advantages of LLCs is that they are pass-through companies, that is, they do not pay taxes at the entity level, but rather their owners declare them on their personal taxes. Furthermore, by not having a permanent establishment in Spain, they do not have to follow the rules or taxation of a Spanish company. 😎
This makes LLCs ideal for businesses that want to operate globally, without being limited by geographic restrictions that might affect other forms of business. Thus, you can have a diversified customer base and take advantage of the opportunities of the digital market. 🌎
Another advantage of LLCs is that they can be anonymous, which gives you more privacy and protection. However, keep in mind that this may raise suspicions among the tax authorities, especially if you do not have justified reasons to open a company abroad. 😓
Therefore, it is important that you maintain transparency and comply with all tax obligations in both Spain and the United States. So, you will avoid problems with the Treasury and you can enjoy the benefits of having an LLC. 🙌
LLCs must file an information return with the U.S. IRS (Internal Revenue Service) each year. This is form 5472, which is used to report transactions between the LLC and its foreign owners or partners. This form is required for LLCs that have at least one foreign-owned 25%, and failure to comply may result in fines of up to $25,000. We will take care of submitting the forms on your behalf each year, don't worry.
The Strategic Sense of an LLC in the United States. 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.
💳 Operational advantages: Tools, hard currency, global payments… Having an LLC opens doors that an SL can't touch.
🌐 Strategic advantages: Gain a foothold in the U.S. without living there, build a global reputation, and scale your business more easily.
Establishing an LLC in the United States for your digital business can provide 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. Plus, you'll enjoy limited protection, simplified management, and a framework conducive to the growth and success of your global business. 🌟📈
If you have decided to open a LLC (Limited Liability Company) in USA, you should know that there are several responsibilities and obligations that you must fulfill. It is not enough to create the company, but you must also keep it up to date with the legal and tax requirements of both countries.
Among the responsibilities that you must take into account are the following:
Regarding tax obligations, you must take into account the following:
As the owner of an LLC in the US, you must also comply with certain reporting obligations, which are as follows:
In addition to these obligations in the US, you must also comply with some reporting tax obligations in Spain, which are as follows:
Did you know that there are some differences between LLCs in different US states? For example, some states require LLCs to file an annual report, which is a document that summarizes the LLC's activity and data. Other states do not require it, which simplifies management and reduces costs. Therefore, I recommend that you compare the characteristics of each state before choosing where to register your LLC.
You are not going to pay anything there
(Inform only)
If you have one LLC (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:
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), the U.S. tax agency. 📄
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.
If you want to open a commercial bank account for your business, the first thing you should do is form a LLC (Limited Liability Company) in USA. Banks will ask you for a series of documents that you can only obtain when creating the LLC.
Among the documents you will need are the following:
These documents prove the legal existence of your business and are essential to comply with banking requirements. Without them, you will not be able to open a business bank account for your LLC at a NeoBank. 😓
Not all banks accept foreign LLCs. Some banks only work with businesses that have a physical presence in the US, such as an office or warehouse. Other banks will require you to travel to the US to open the account in person. Therefore, we will recommend banks that offer facilities and advantages for your LLC.
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 😉
(Holiday periods seriously affect waiting times.)
CP 575, the long-awaited letter with your EIN number
If you have one LLC (Limited Liability Company) in USA, you will surely want to have a commercial bank account that offers you facilities and advantages for your business. But not all banks are the same, and some can put obstacles in your way or charge you abusive fees. Therefore, we recommend that you opt for neobanks, which are digital banks that operate online and that offer you modern solutions adapted to your needs. 🚀
Among the most prominent neobanks for LLCs, there are two that stand out: Payoneer, mercury and Wise. These neobanks are characterized by their compatibility with the cross-border and digital needs of LLCs. 🌎
Payoneer: It is a neobank of American origin that operates in euros (€) and American dollars ($). It allows you to open a multi-currency account with which you can send, receive and convert money in more than 50 currencies, with the real exchange rate and without hidden fees. In addition, it offers you a virtual and physical debit card, with which you can pay online anywhere in the world.
mercury: It is an American neobank that offers its services in American dollars ($). It allows you to open a business account with which you can manage your business online, with tools such as invoicing, accounting, integrations with platforms such as Stripe or Shopify, and access to financing programs. In addition, it offers you a physical debit card and a virtual one, with which you can pay both online and in physical establishments. If you want to open an account with Mercury, you can do so through this link, which will give you immediate access. 💵
wiseWise is a European neobank, formerly known as TransferWise, that operates in multiple currencies, including euros (€), US dollars ($), and over 50 other currencies. Wise lets you send, receive, and convert money internationally with transparent rates, a real exchange rate, and low fees.
Neobanks are safer than traditional banks. Although they operate online, neobanks comply with the same rules and regulations as conventional banks, and have the same data and fund protection guarantees. Furthermore, by not having physical branches or unnecessary employees, they can reduce their costs and offer you better conditions and services. Therefore, we recommend that you try neobanks and forget about the usual banks.
Did you know USA benefits from the LLCs (Limited Liability Company) that non-residents create? Although these entrepreneurs do not pay taxes on their businesses in the US, the country receives income in another way. 🇺🇸
Each year, LLCs must pay fees to the state where they were registered. These fees vary by state, but are typically a few hundred dollars. If we add up the fees of all the LLCs in the US, the result is a substantial source of income for the country. 💵
But not only that, the US also benefits from the information it collects from LLCs. When creating an LLC, owners must provide certain personal and financial information, such as an EIN (Employer Identification Number) and an ITIN (Individual Taxpayer Identification Number). This information allows the US to monitor international financial activities and strengthen its market intelligence, giving it a competitive advantage in the global economy.
There are more than 2 million LLCs registered in the U.S. LLCs are very popular among American and foreign entrepreneurs, offering them great flexibility and protection. Additionally, each state has its own rules and advantages for LLCs, so you have to choose carefully where to register them. For example, Delaware is one of the most favorable states for LLCs, as it has very modern and business-friendly legislation, a court specialized in business matters, and very low taxes.
Many entrepreneurs believe that LLCs (Limited Liability Company) in USA They do not need to keep formal accounting. But this is a myth that can cause problems. Although LLCs do not have to file complete financial statements, they do have to report certain accounting information at the federal level. 🇺🇸
The entities that request this information are the IRS (Internal Revenue Service), FinCEN (Financial Crimes Enforcement Network), and the BEA (Bureau of Economic Analysis). These entities require specific data about the LLC's financial situation, such as costs, revenue, expenses, profits, transactions, assets, and liabilities. This information is reported on specific forms, such as Form 1120, Form 5472, and Form 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. It is essential that your accounting reflects the financial reality of the company, as this data is the basis for calculating personal income tax and any other taxes applicable in your jurisdiction of residence. Proper accounting management is key to the legal security of your business. 💵
To avoid errors in the accounting management of a US LLC, you must know which expenses are deductible and which are not. Deductible expenses are those that are related to the course of business and that are necessary and reasonable. Non-deductible expenses are those that are not related to the business, that are fines or penalties, or that are donations. In another section, we will explain more about deductible and non-deductible expenses for a US LLC. 🙌
Some states that require LLCs to maintain complete accounting and file financial statements? These states are California, New York, Pennsylvania and Utah. If you create an LLC in one of these states, you will need to keep detailed records of your income and expenses, and file a balance sheet and income statement with the state.
If you have one LLC (Limited Liability Company) in USA, you should know that you have to include the profits of your business in the calculation of the Income Tax (Personal Income Tax) in Spain. You must not only declare the amounts you withdraw from the company, but also those you leave accumulated. This way, you will avoid problems with the Tax Agency and comply with your tax obligations. 🇪🇸
But be careful, there is a very common mistake that can make you pay more taxes than you owe. Some entrepreneurs think that they only have to declare and pay taxes on the company's actual withdrawals, that is, on the money they put in their pockets. But this is not the case, at least for LLCs. US tax rules state that LLCs must report all accrued profit at the end of the tax year, regardless of whether they withdraw it or not. 😓
So, How can you reduce taxes legally? The key is in maximize deductible expenses. Deductible expenses are those that are related to the course of business and that are necessary and reasonable. By deducting these expenses, you reduce the tax base, that is, the amount on which taxes are applied. Thus, you pay less taxes and increase your profitability. 💵
But not all expenses are deductible. There are some that you cannot subtract from your income, such as personal expenses, fines or penalties, or donations. If you don't know which expenses you can deduct and which you can't, you can make serious accounting errors, which can lead to fines or penalties. Therefore, it is crucial that you know well what expenses can be deducted, a topic that we will explain in more detail in another section. 🙌
If you have an LLC (Limited Liability Company) in the United States, it is crucial to understand what expenses you can deduct from your business. Only the expenses directly linked to your business activity and necessary to generate income are deductible.
Principles of Deductibility:
Non-Deductible Expenses (Common Examples):
Risks of Misuse:
Deductibility between Jurisdictions: It's important to note that deductibility rules may vary between the U.S. and Spain. Deductible expenses in your Spanish personal income tax must strictly adhere to Spanish tax regulations, even if the LLC allows more deductions in the U.S. You must always report your LLC's profit in Spain according to Spanish personal income tax rules.
Recommendation: To ensure proper accounting and avoid problems with the tax authorities, we recommend:
There are some expenses that are deductible in the US but not in Spain, or vice versa. For example, in the US, you can deduct 50% on the cost of business meals, but in Spain, you can only deduct 10%. Or, in Spain, you can deduct 30% on the cost of vehicles used for business purposes, but in the US, you can only deduct the proportional portion for business use. Therefore, to be on the safe side, we recommend that you follow the deductible expenses in Spain.
Yeah have a LLC (Limited Liability Company) in USA U.S., can deduct the bills necessary for the activity of the business…
BUT eye: Yeah are resident fiscal in Spain, the benefits of you LLC pay taxes in he Income Tax Spanish low he regime of attribution of rents, and only you will be able to deduct the bills that recognizes the law Spanish, although he IRS sea further flexible.
That is to say: The benefit that you have to declare in Spain is NOT the net amount after deducting all the expenses allowed by the IRS, but the Net after deducting ONLY the expenses allowed by Spanish personal income tax law.
¿In that tea affects?
Carry you accounting American it better possible, but for the statement in Spain you will have that recalculate he benefit according to the law Spanish.
By example: meals, car, trips, training… the law Spanish is a lot further restrictive and No accepts deduct all it that allows he IRS.
He benefit to declare will be elderly that he that you see in he bank either in you accounting of the LLC.
¿As do it good?
¿That means this in the practice?
You can do the accounting of the LLC with all IRS deductible expenses for everyday use, but when filing your tax return in Spain, you will have to recalculate the profit according to the criteria of the Spanish Personal Income Tax (IRPF), and deduct only what the Spanish Treasury accepts.
The rest of the expenses (which the Spanish Treasury does not accept but the IRS does) help you pay less taxes in the US if you ever have them, but not here.
The uncomfortable reality is that the Treasury isn't naive, and it scrutinizes every detail when it suspects something isn't right. It inspects bank transactions, expenses, and may even scan your social media accounts to detect inconsistencies. If it detects anything suspicious, it will try to reclassify those expenses, and then the burden of proof will be on you.
Here's a general guide to common expenses and how to manage them safely and with common sense. It also explains what you can easily deduct and what expenses are more of a "gray area":
It's very important to keep receipts for all the expenses you deduct and keep good accounting records in Excel/Sheets. This way, you'll be able to prove the deductible expense in the event of an inspection by the Treasury or the IRS. If you don't have receipts or don't keep an organized record of your expenses, you could have trouble justifying your deductions and could face fines or penalties. Therefore, we recommend that you keep receipts for all the expenses you deduct and keep good accounting records in Excel/Sheets, which will allow you to keep track of your income and expenses.
No, and be careful with this one. myth that circulates around there.
Some "LLC sellers» they assure that you can deduct Up to 1500 $ (per month!) for working from homeThe basis of this error usually comes from a deduction that exists in the US called “home office deduction”, but It does not apply as you think, nor does it work in your context..
Let's take it one step at a time 👇
In the United States:
There is a deduction for teleworking called Simplified Home Office Deduction, that reaches up to 1,500 $ per year, not per month.
And it only applies if:
Are self-employed under the federal tax code
You have a space exclusive and habitual working from home
That space is perfectly documented (m2, plan, photos…)
➡️ But if you use one LLC disregardedIf you're a Spanish taxpayer, this deduction doesn't apply to your personal income tax. It only applies to those who file taxes directly in the U.S.
In Spain:
You also 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, and
Are registered as self-employed in Spain, and
You can prove that this space no personal use
➡️ And most importantly: If you recognize part of your home as the LLC office, you may be creating a Permanent Establishment (PE).And there, things really get complicated.
💡 Conclusion: Neither 1,500 $/month in the US, nor 15,000 $/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.
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 Tax Agency in Spain.
Risks of Including Non-Legitimate Expenses:
Principles of Correct Deductibility:
Recommendation: To ensure compliance and avoid problems, we recommend:
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 strict criteria of transparency and legality to ensure regulatory compliance.
The Arm's Length Principle: 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:
Consequences of Non-Compliance: Price manipulation or simulation of related-party transactions may be considered tax fraud, which carries severe fines, penalties, and, in high-value cases, even prison sentences. Tax authorities closely scrutinize these transactions to detect irregularities.
Recommendation: To avoid legal and tax risks, it is essential that all related-party transactions be carried out with maximum transparency and valued at market prices. Always consult with a tax advisor specializing in international taxation to ensure proper compliance.
Digital assets like NFTs (Non-Fungible Tokens) are a new innovation in the financial landscape. It's critical to understand how transactions involving NFTs are handled within your LLC to ensure proper tax compliance and avoid risks.
Contents (Replaces all explanation of the “strategy” and example):
Principles of Valuation and Deductibility:
Risks of Unjustified Operations:
Recommendation: To ensure compliance and avoid problems, we recommend:
If you want to create a LLC (Limited Liability Company) in USA, we offer you a fast and simple service so that you can have your company operational in a short time. We explain the steps we follow to create your LLC in New Mexico, one of the most advantageous states for LLCs.
At the end of this process, your LLC will be operational within 1 to 3 months, depending on the speed with which the IRS files your request. This way, you'll enjoy the benefits of having a company in the US, such as limited liability protection, management flexibility, and operational efficiency. 🙌
New Mexico is one of the most popular states for LLCs due to its simplicity of formation and efficient administrative framework. These features make managing and maintaining your company easier, allowing you to focus on growing your global business.
If you want to create a LLC (Limited Liability Company) in USAWe offer comprehensive and affordable services so you can have your business up and running quickly. We'll explain the benefits of our service package, which costs $1,750 per year and will be extended until December 31, 2024, for existing customers.
Our service package includes:
This plan is designed to simplify the administration of your LLC and ensure proper tax and legal compliance in the United States. This way, you can enjoy the advantages of having a company in the U.S., such as limited liability protection, operational efficiency, and ease of management for your global business. 🙌
When you hire our service for the creation and management of your LLC in the USA, you will receive a set of essential documents that prove the legal existence of your company and ensure its regulatory compliance. This documentation will help you operate correctly, open bank accounts and demonstrate the legitimacy of your structure.
📂 Documents you will receive
1️⃣ EIN (Employer Identification Number)
2️⃣ SS-4 (EIN Application)
3️⃣ Certificate of Formation / LLC Bylaws
4️⃣ Operating Agreement
5️⃣ Contract with the Manager (if applicable)
6️⃣Founder's Declaration
8️⃣ BE-13C (Reporting of Foreign Investment in the U.S.)
With this documentation, your LLC will be fully prepared to operate in the US, open bank accounts and comply with tax regulations without complications. Depending on your specific case, some documents may not be necessary or may require additional information.
Creating an LLC in the US without help It may seem like an epic adventure. But if you do it without a map or compass—without knowing exactly where you're sailing—you could easily end up running aground in murky fiscal waters. 🏴☠️
Without experience, you're flying blind. And that, in international taxation, isn't romanticism... it's real risk.
For example:
💥 Fines for not properly filing Form 5472 (yes, the one 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 (that cost money)
Many people jump into creating an LLC thinking it's a "click, click, and done" thing.
But without prior training, It will take you weeks (or months) in understanding:
And there's more:
The most common mistake is forgetting the Operating Agreement.
Without it, your LLC is like a ship without a rudder: no legal direction, no protection, and easier to sink if the IRS comes.
Being able to sleep well at night… It is priceless.
⚠️ Maintenance is not optional
Even if you set up your LLC well, that's just the beginning.
Then you have to maintain it:
➡️ All this it has to be done every yearAnd if you don't do it, they don't warn you: they penalize you.
🚀 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 don't just 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 take care of what you do best: grow your business.
✅ Ready to sail without fear?
Your LLC, done right, is your ship.
We, your onboard team. And the U.S., the ocean where you can play with advantage.
Are you coming aboard? 🌊
🛡️ If your business already generates significant profits (for example, more than €100,000/year) or you have significant assets, you might be interested in exploring investment options. more sophisticated business and asset structureThis allows for efficient organization and management of your assets globally.
✅ Benefits of an Advanced Structure:
📌 Learn more about advanced planning: 👉 FIP.Devil.Marketing☂️
Official websites and legislation:
Agreement between Spain and the United States to avoid double taxation (Official State Gazette)
Official State Gazette on VAT for digital services in Europe
Tax and accounting tools:
TaxDown – Simple and guided tax return.
Where do my taxes go? – Information on the use of taxes in Spain
European VAT management strategies:
Paddle – Merchant of Record for simplified management of European VAT on B2C sales.
Lemon Squeezy – Alternative as Merchant of Record to manage VAT in Europe.
Resources officers of others jurisdictions/taxation international
Guides, resources and services recommended
Extra: Legislation European and directives
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.
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:
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.
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:
Common Deductible Expenses:
Automobile Expenses: If the LLC uses vehicles for business purposes, it is possible to deduct automobile-related expenses, such as gasoline, maintenance, and depreciation.
Business Education Costs: Costs associated with continuing education or business-specific training may be deductible.
Commercial Insurance: Insurance premiums for commercial coverage, such as liability insurance, may be deductible.
Charitable Contributions: Donations to charities may be deductible if they meet certain requirements.
Commercial Taxes and Licenses: The fees and licenses required to operate the business are deductible expenses.
Keep in mind that you will not be able to deduct expenses that are directly linked to the country, such as offices or property, as this could create tax complications for your LLC by operating exclusively from your country of residence.
If your LLC makes a clear separation between business and personal accounts, maintains accurate accounting in Excel, meticulously saves all invoices, and has an Operating Agreement, you have no reason to worry. However, if not, there is the possibility that a judge in the United States will 'pierce the corporate veil', putting the legal protection of the LLC at risk. For this reason, it is essential to rigorously comply with all the aspects mentioned above.
It is only required that the company be duly incorporated and current with all its documents, including the EIN number (company tax identification), and the manager's updated passport. It is not necessary to have a Social Security Number or ITIN. We cannot guarantee account opening, as banks must conduct a security check called KYC (Know Your Customer), which is mandatory under federal regulations established in the Patriot Act, before approving a customer. .
In the event that we are unable to register your business within 60 days due to an error on our part, we will refund the full amount you paid, with no questions or explanation required.
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.
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.
