Nevada Corporations and Foreign Aliens - Important Considerations
Foreign Aliens - Read Carefully!
January 10, 2005
By Tom SeFack
Non-resident aliens, also called foreign aliens,
often come to Nevada to incorporate, as you do not
have to be a U.S. citizen to own a Nevada corporations.
Foreign aliens have one important reason for Nevada
- the state's tax and business laws make it top consideration
amongst all U.S. states.
No tax information disclosure agreement with Internal
Revenue Service, no state corporation nor personal
income taxes, no annual franchise taxes, better debtors
protection and privacy protection of those involved
with corporation, are the most cited reasons to come
to Nevada.
Also, bearer shares are allowed, and any nonresident aliens, persons
or corporations, may hold property or interest in lands in Nevada.
Before becoming too ecstatic by the large number of benefits offered,
let's take other, for foreign aliens especially important facts,
into consideration. Foreign aliens cannot form S corporations (these
are companies where the income is passed through to the shareholders
for taxation purposes). If aliens want to take advantage of benefits
offered by this kind of corporation, the only way is to become resident
of the State of Nevada.
The tax side issues of becoming incorporated in Nevada are worth
to dedicate much more than this one article, in fact few long pages
maybe would not be enough. In short, the tax treatment of non-residents
aliens is different from residents.
An example: under the federal internal revenue code, U.S. citizens
and aliens are taxed identically. However while Nevada doesn't impose
state inheritance tax, United States levy a tax on the gross estates
of foreign aliens, including stocks held in United States corporations.
Some suggest making use of foreign corporations to held U.S. property
and stocks, to avoid the federal estate taxes.
To make things more complex, number of treaties with foreign countries
exist that redefine the tax issues country by country. Not just
a tax specialist, but only a tax expert specialized in foreign aliens
and the tax laws of the particular state (Nevada in our case), is
the person that can help you in making sure that you have taken
care on all aspects of forming your Nevada corporation. The more
hard edges taken care for, the safer will you, a foreign alien,
feel, and the better you could make a use of the business favorable
environment of Nevada.
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