I am a partner in a partnership that I originally set up with a cousin to gain hands-on financial literacy by running a small web store with a physical collection point in the nearest town. Two other cousins have since joined the partnership when they turned 18. Notwithstanding the educational purpose of the partnership, the partnership has turned a profit in every year and has accumulated more than $10,000 in cash at this point. The partnership is registered outside the US and UK. All partners are non-resident aliens of the US and the UK.
We wish to jointly invest the cash in US and UK stocks (mostly ETFs). Are there significant regulatory hurdles (e.g. tax filing and disclosure requirements) for doing so? Is the paperwork more than that required for an individual investor?
From a reading of the US regulations, it appears that foreign partnerships are treated as pass-through entities, and any taxes due will be withheld by the stock broker after submitting some variant of Form W-8. There are no other disclosure or tax filing requirements if the only US income is from dividends. There are no capital gains taxes. This is all largely similar to the requirements for an individual investor. Is this correct? What about in the UK?
