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We are considering creating an LLC in the US (Delaware or Wyoming), here as "Mother LLC" that will own another LLC in another country here as "Local LLC." The Local LLC will fully pay taxes on its jurisdiction and then kick back some of the profits as dividends to the Mother LLC. The Mother LLC will distribute its dividends to its shareholders who are also Non-US.

Its worth saying that the business which the LLC will be doing will be outside of the US.

What taxes would we have to pay?

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The US entity is disregarded for tax purposes unless you explicitly elect it to be treated as a corporation. "Local" may not be though (most likely), so you may end up with a US partnership with a controlling interest in a foreign corporation and with a bunch of foreign partners and tons of foreign income.

Why you would want this headache for yourself is beyond me, but you should definitely talk to a US tax advisor about the implications.

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  • If the Wyoming LLC has a controlling interest in a foreign LLC with a bunch of foreign partners and tons of foreign income - does that mean that there are no taxes to be paid to the US Authorities (state or federal, or IRS)? The local LLC will pay taxes where it operates, including sales tax, profit tax, employee salary tax, etc. We just need the 'mother LLC' to be in the US because our investors trust that jurisdiction more than the local one
    – blockbyblock
    Commented Jun 13, 2023 at 11:39
  • @blockbyblock there might be some taxes, but that's we'll beyond the scope of this forum. The rationale makes no sense, the US entity has no US assets, so even if the investors prevail they get nothing.
    – littleadv
    Commented Jun 13, 2023 at 14:44

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