NRA Investing in USA - Tax Obligation and Mitigation

[Steve H.]

Hi there, i'm a non-resident Alien (British), investing in USA. I'm wondering if you have pointers, people or ideas for maximum tax mitigation as an NRA?

My situation and current strategy: 

- my foreign company will invest in USA through both a US LLC (as a disregarded entity) and a US corporation. I'll figure out if the US investment will be an FDAP or ECI (understanding which is vital for all foreign investors).

- FDAP investments i'll definitely invest through US corporation, ECI i can invest through US LLC or US corporation, depending if i need the investment profits immediately or they can wait.

- the US LLC will be straight path through to me, so i'll be taxed as an individual (it'll file Form 5472 and 8832 so the foreign company is also viewed as disregarded entity for tax purposes, so it passes through directly to me for tax purposes).

- the US corporation will be taxed at 21% and profits re-invested. I will NOT take distributions from US corporation because in my situation that'll be 30% tax. These investments will more be for long term. 

- i'd like to give loans from my foreign company to both the US LLC and US corporation for the US investments.

Questions: Is there any holes in above strategy? And is there any strategies for tax mitigation when a foreigner is investing in USA through a US LLC and Corporation? Would love direction and advice, books or websites to help understand my tax obligation and work out how to mitigate it in the best possible way. 

Thank you!

[Ashish Acharya]

Originally posted by @Steve H.:

Hi there, i'm a non-resident Alien (British), investing in USA. I'm wondering if you have pointers, people or ideas for maximum tax mitigation as an NRA?

My situation and current strategy: 

- my foreign company will invest in USA through both a US LLC (as a disregarded entity) and a US corporation. I'll figure out if the US investment will be an FDAP or ECI (understanding which is vital for all foreign investors).

- FDAP investments i'll definitely invest through US corporation, ECI i can invest through US LLC or US corporation, depending if i need the investment profits immediately or they can wait.

- the US LLC will be straight path through to me, so i'll be taxed as an individual (it'll file Form 5472 and 8832 so the foreign company is also viewed as disregarded entity for tax purposes, so it passes through directly to me for tax purposes).

- the US corporation will be taxed at 21% and profits re-invested. I will NOT take distributions from US corporation because in my situation that'll be 30% tax. These investments will more be for long term. 

- i'd like to give loans from my foreign company to both the US LLC and US corporation for the US investments.

Questions: Is there any holes in above strategy? And is there any strategies for tax mitigation when a foreigner is investing in USA through a US LLC and Corporation? Would love direction and advice, books or websites to help understand my tax obligation and work out how to mitigate it in the best possible way. 

Thank you!

This gets complicated and you really cannot expect answers off the forum here unless you talk to a tax professional. There are many other variables that go into this. 

 @Eamonn McElroy should be able to help you with these.