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I'm thinking of forming a C-corporation in the US that will provide consulting services. Providers ("workers") will initially be located overseas, so technically the company will not have any employees. But I have a question regarding dividends. All of the shareholders (myself included) will be NRAs (non-resident aliens), so what taxes are involved there?

Thanks in advance.

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so technically the company will not have any employees

No can do. You'll have to have some employees. Depending on your State laws, you'll need to have at least certain specifically enumerated officers (CEO, for starters). It may be that a single person will be named for all the positions (again, depending on the State laws), but you probably won't be able to have a Corporation in the US without a single employee.

All of the shareholders (myself included) will be NRAs (non-resident aliens), so what taxes are involved there?

US sourced dividends are taxed by the US. So you'll pay the US Federal and State taxes. That's on top of the taxes your home country demands. There may be a tax treaty between your home country and the US that will affect this general rule.

  • Of course there will be a CEO and other required officers, but they will be shareholders and their only compensation will be dividends. I believe that's the only option since these people are NRAs and thus cannot receive wages in the US (correct me if I'm wrong here). Regarding taxes, do you know what federal and state taxes (WY) are to be paid by a NRA? Thanks. – Paul Aug 4 '16 at 13:48
  • @Paul you seem to misunderstand the word "employee". Employees can be abroad, you'll just have to also register the company in your home country, I would guess. – littleadv Aug 5 '16 at 3:17

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