When somebody tells me “I want to pay less tax”, the first question is which one. A founder with a company outside their own country can run into eleven different taxes, collected by up to three countries, and almost nobody holds them in their head at once. This guide lines them up: what each one is, who collects it and when it reaches you with a US LLC.
It is not a treatise. It is the map, so that when you read “0% tax” you know to ask: 0% of which?
The map before the list
Three ideas organise everything that follows:
Who collects. Your country of residence taxes your personal income, your wealth and your capital gains. The country where the company is resident collects corporate tax. The payer’s country withholds at source. The customer’s country collects VAT. The country you leave collects exit tax. Each tax has its collector, and the country’s system (worldwide, territorial, remittance) decides how much. The five systems are in the tax systems of the world.
Transparent or opaque. A single-member LLC is transparent in the United States: it pays no corporate tax, distributes no dividends, its profit is yours. That removes two taxes (corporate and dividend) at one end and concentrates them at the other (your personal income). An opaque company (a UK Ltd, a UAE free zone, an Estonian OÜ) does the opposite: it pays corporate tax and then you pay dividend tax. Which is better depends on your residence, and the international company calculator works it out in three layers.
Work has a location. Several of these taxes (income, corporate, social security) are triggered by where the work is done, not by where the company is. It is the idea people find hardest to accept and the one that decides most.
1. Personal income tax
The one your country of residence charges on your income. With a transparent LLC, the LLC profit is your income: it lands in your return as trading income, as income from a foreign entity, or as a dividend, depending on how your country characterises it.
- In a worldwide country (the UK, Germany, Canada, Australia, Spain, Mexico), it all comes in. The UK, after Anson, tends to see the LLC as opaque and taxes distributions as dividends; Spain looks at it through its controlled-foreign-company rule and its place-of-management test.
- In a territorial country (Paraguay, Panama), it does not come in if the work was done outside. If the work was done inside, it comes in at the local scale. See territorial taxation.
- In a remittance country (Malta, Thailand), it comes in when you bring it in.
In the United States, a non-resident owner pays no income tax on the LLC profit as long as the LLC is not effectively connected with a US trade or business: no office, employees or dependent agent there. That is the ETBUS test, in the ETBUS test.
2. Corporate tax
The one a company pays on its profit, in the country where it is resident. A transparent LLC does not pay it in the United States. But “does not pay it in the United States” and “does not pay it” are different sentences:
- If the LLC is effectively managed from the UK, HMRC can treat it as UK-resident under the central management and control test and apply 25%. Germany, France, Spain and most worldwide countries have the same rule under different names.
- If it is managed from the UAE, Federal Decree-Law 47/2022 can treat it as resident there and apply 9% on profit above AED 375,000.
- If it is managed from a strictly territorial country, the company may have formal obligations, but its foreign-source profit is not taxed.
With an opaque structure (UK Ltd 25%, Estonian OÜ 22% only on distribution, Bulgarian EOOD 10%, UAE free zone 0-9%, Cyprus Ltd 15% from 2026), corporate tax is the first layer and dividends the second. The company calculator compares nine.
3. Withholding tax
The tax the payer’s country keeps before the money leaves. The United States withholds 30% on passive payments (dividends, interest, royalties, some services) to non-residents unless a treaty reduces it. For most founders it is not a problem, because the work of a non-ETBUS LLC is not US-source passive income: it is documented with a W-8 form and nothing is withheld.
It does show up when you hold US investments: dividends from US shares (30%, or 15% under the UK-US and most European treaties, 10% under Mexico-US), interest on certain bonds, royalties from a US platform. And it shows up in reverse: if your LLC pays royalties or interest to someone outside the United States, it may have to withhold itself.
Other countries withhold too: Spain takes 19% on dividends to non-residents (reducible by treaty), Paraguay 15% dividend tax on non-resident owners, Portugal 25% or 35%.
4. Dividend tax
What you pay, in your country of residence, when a company distributes profit to you. With a transparent LLC it does not exist: there is no dividend, there is your income. With an opaque company it is the second layer, and each residence taxes it differently:
- UK: dividend bands of 8.75%, 33.75% and 39.35% above the allowance.
- Spain: savings base, 19-30%.
- Colombia: from a foreign company, 35% first (article 240 of the Tax Statute) and then the article 241 table. The most expensive case among the 39 in the calculator.
- Uruguay: 12% on foreign dividends, 0% under the tax holiday.
- Paraguay: dividends from foreign companies are outside personal income tax.
- Georgia, Panama, Hong Kong, Singapore: not taxed.
It is the tax that makes any opaque company lose against the LLC from Colombia, and that lets a local SRL in Paraguay (10% corporate + 8% dividend) compete with it.
5. Capital gains tax
The tax on the gain when you sell an asset: shares, the company itself, crypto, property. Collected by your country of residence and, for some assets, also by the country where the asset sits.
The United States does not tax a non-resident’s gains on selling shares or crypto (unless they spend 183 days there in the year), but it does tax gains on US real property (FIRPTA, 15% withholding on the price). Selling your LLC to someone else is, for a non-resident, a gain taxed in your residence, not in the United States.
The UK taxes gains at 18% and 24%; Spain integrates them into the savings base (19-30%); Paraguay taxes Paraguayan-source gains at 8%; Panama taxes gains on Panamanian property and shares at 10%. Georgia does not tax foreign-source gains.
6. Wealth tax
The tax on what you own, not on what you earn. It exists in few countries, but several are on our readers’ map:
- Spain: from EUR 700,000 of net wealth with an exempt minimum and regional reliefs (Madrid and Andalusia relieve it; the “large fortunes” tax claws it back from EUR 3 million).
- Colombia: net wealth from 72,000 UVT, up to 1.5%.
- Argentina: personal assets tax on assets at home and abroad.
- Uruguay: wealth tax on Uruguayan assets.
- Switzerland, Norway, the Netherlands (which taxes a deemed return on capital in box 3).
Your interest in the LLC is wealth. In a country with this tax, a 0% on income does not erase 0.5-1.5% a year on value.
7. Inheritance and gift tax
The tax paid on inheriting or receiving a gift. Collected by your country of residence and, often, by the country where the asset sits. The surprise for non-residents is the United States: it taxes a non-resident’s US-situs assets with an exemption of only $60,000 and rates up to 40%. Shares in US corporations are US-situs; bank deposits generally are not. An interest in an LLC is a grey area worth settling before, not after.
The UK charges 40% above the nil-rate band on worldwide assets of long-term residents (the domicile test was replaced by a residence test in April 2025); Spain charges a state scale with large regional differences; Portugal, Paraguay, Panama and the UAE have no inheritance tax. It is the tax almost nobody looks at when choosing a residence, and it decides more wealth than income tax does.
8. VAT, sales tax and GST
Consumption tax, collected by the customer’s country. Three rules that affect an LLC:
- B2C digital services to EU consumers: a non-EU LLC must charge VAT from the first sale and report it through the one-stop shop (non-Union scheme). There is no threshold. B2B to EU businesses: reverse charge, no VAT.
- US sales tax: not federal but state, triggered by economic nexus (typically $100,000 of sales or 200 transactions into a state, each state with its own threshold). Selling digital services or products to consumers in a state can require registering there. Amazon FBA has its own mechanics, in Amazon FBA sales tax.
- UK, Australia, Canada and others: similar rules for B2C digital services. The UK requires VAT registration from the first B2C digital sale by a non-UK supplier.
Selling to businesses rather than consumers removes almost all of this block. Selling to consumers switches it on in every market.
Not sure how this applies to your case?
Eleven questions and we tell you whether the LLC fits, and if it does not, that too.
9. Exit tax
The tax on unrealised gains that some countries charge when you stop being resident: they treat you as if you had sold everything the day before leaving. It is the exit toll of the worldwide system.
- Spain (article 95 bis of the personal income tax law): if you were resident 10 of the last 15 years and hold shares worth more than EUR 4 million, or more than 25% of an entity worth more than EUR 1 million. Deferral if you move within the EU.
- Germany, France, the Netherlands, Norway: their own rules with different thresholds.
- United Kingdom: no general exit tax for individuals, but gains realised during a temporary non-residence of five years or less are taxed on return.
- United States: for those who renounce citizenship or a long-held green card.
For the typical founder with a services LLC, the Spanish threshold is not reached. For anyone whose company is worth something, it is the first figure to check before moving, not the last.
10. Social security
Not a tax by name, a tax in the wallet. Collected by the country where you perform the activity, regardless of where the company is. It is the one most often forgotten when comparing an LLC with the local self-employed status:
- United Kingdom: a resident working from the UK through a US LLC has Class 2 and Class 4 National Insurance on the profit, and the LLC does not change that.
- Spain: RETA is mandatory if you work from Spain, even with a US company.
- Costa Rica: mandatory social security for independent workers.
- Paraguay and Panama: not mandatory for independents.
- United States: a non-resident owner of a non-ETBUS LLC pays no self-employment tax.
Social security changes the result of any comparison between structures more than the corporate tax rate does. If the calculator you are looking at leaves it out, it is incomplete.
11. Double tax treaties
Not a tax: the allocation. A treaty between two countries decides which one taxes each type of income first and how the other avoids double taxation (exemption or credit). The United States has treaties with the UK, Ireland, Germany, France, Italy, the Netherlands, Spain, Portugal, Canada, Australia, Mexico, Chile (since 2024), Türkiye; it has none with Colombia, Argentina, Peru, Uruguay, Paraguay, Panama, Costa Rica, Brazil, the UAE, Singapore, Hong Kong or Georgia.
The rule that surprises people: a transparent LLC usually cannot invoke the treaty. Treaties protect “residents” of a state, and the LLC is not a US tax resident because it pays no tax there. Who can invoke it, with nuances and the right certificate, is its owner for the income attributed to them. In practice, for a services founder with no withholding, the treaty matters little; for anyone receiving US-source dividends, interest or royalties, it is the difference between 30% and 15%, 10% or 0%.
In short
- Eleven taxes, up to three collectors. Before saying “0%”, say of which.
- A transparent LLC removes corporate and dividend tax in the United States and concentrates everything in your personal income, which your country taxes according to its system.
- The US 30% withholding does not touch the work of a non-ETBUS LLC; it does touch investments.
- Wealth, inheritance and social security are the three almost nobody looks at and the ones that decide most in the long run.
- Exit tax is the figure to check before moving if your company is worth something.
- Treaties allocate; a transparent LLC can almost never invoke them.
The company calculator works out the first three layers (corporate, withholding, personal) for nine structures from your residence. The rest of this map gets decided with your case in front of you, and the assessment is how to put it there.
Explore the full guide
Frequently asked questions
What taxes does a non-resident's LLC pay?
In the United States, none on the profit as long as it is not ETBUS (no office, employees or dependent agent there). What it files is informational: Form 5472 with a pro-forma 1120, with a $25,000 penalty if it is missing. The profit is taxed in the owner's country of residence, according to that country's system.
What is withholding tax?
The tax the payer's country keeps before the money leaves. The United States withholds 30% on dividends, interest and royalties paid to non-residents unless a treaty reduces it. The work of a non-ETBUS LLC is not withheld: it is documented with a W-8 form.
Does an LLC free me from corporate tax?
In the United States, yes, because it is transparent. In your country of residence it depends: if you manage the LLC from the UK, HMRC can treat it as UK-resident under central management and control; from the UAE, the 9% corporate tax can reach it. US transparency does not travel on its own.
What is an exit tax?
The tax some countries charge on unrealised gains when you stop being resident. Spain, Germany, France, the Netherlands and Norway have one with different thresholds; the United States has one for people who renounce citizenship or a long-held green card. The UK has no general exit tax for individuals, but its temporary non-residence rules catch gains realised during a short absence.
Do I pay social security if I have an LLC and work from my home country?
Usually yes: social security follows where you perform the activity, not where the company is. A UK resident working from the UK through a US LLC has Class 2 and Class 4 National Insurance on the profit; a Spain resident has RETA. It is the cost most people forget when comparing an LLC with the local self-employed status.
Can an LLC use a double tax treaty?
Usually not. Treaties protect "residents" of a state, and a transparent LLC is not a US tax resident: it pays no tax there. Who can invoke the treaty, with nuances, is its owner, for the share of income attributed to them.