# Operating U.S. LLC from abroad



## ina

I'm a U.S. citizen who moved to Europe 3 months ago. I still have my LLC (for my online business) registered in the U.S. I initially thought I would keep it registered there because I plan to return to the U.S. in the future (maybe in 2-3 years). But now I'm not sure if this is a good idea because of taxes. If I have a U.S. LLC (in a state where I also have to pay income tax and general excise tax), do I have to pay taxes in the U.S. (federal and state) and in Europe as well? Is it wiser if I just close the LLC since I also have to register my business in Europe (for tax reasons since I currently reside here)? If there is a legal and tax-efficient way how I can keep this company registered in the U.S. I would do that.


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## Bevdeforges

If you're the only employee in the company, you're going to have to register your business where you currently are so that you are properly enrolled for social insurances and taxes. Normally, you should be able to qualify under the Foreign Earned Income Exclusion to exclude (using form 2555) your earnings while you are resident in Germany. But, unless you are enrolled in the German social insurances system, you'll still be liable for "self-employment tax" in the US (i.e. Social Security).
Cheers,
Bev


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## ina

Thanks Bev for your reply. Yes, I'm the only employee. I plan to register this business in Germany but I'm not sure yet how taxes work here. So if I pay all required taxes in Germany as a self-employed person do I also have to pay self-employment tax in the U.S.? 

I have read that some U.S. citizens living abroad who have an online business register it either in Wyoming or Nevada because they have favorable tax laws and make registering a business easy. But what I don't understand is how taxes would work in such a case, especially if one resides abroad and has the same business registered there. Do you know who to contact, a CPA? I guess it would have to be a CPA who knows about business owners living abroad.


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## Bevdeforges

If you are fully registered in Germany and paying your various social insurances, you do not have to pay self-employment tax in the US. I would just list your German company as your "employer" and report your remuneration from the business as your salary income for US tax purposes. (Just remember that for US tax purposes, you are supposed to report your gross income - not the "taxable income" as it is calculated in Europe, usually subtracting what you have paid for social insurances.)

It depends on the country you're living in, but registering an online business in a low tax state really doesn't get you anything if you're legally resident outside the US. (Except perhaps another set of paperwork to file every year.)
Cheers,
Bev


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