# Can I as Belgian Expat in US start an LLC?



## kojtl1000 (Aug 25, 2011)

We are here in the US on an L visa and I as a trailing spouse have an L2 visa.
I am currently on a leaf of absence with my Belgian employer. We are both looking for a way to start working remote again here from the US. However, it seems really hard for my employer to get everything arranged from Belgium.
What they proposed earlier was that I would work via an American temporary agency and that they would invoice my Belgian employer. However, all the temporary agencies I started were not really interested in this setup.
Another route we are looking at is that I create my own company here in the US (LLC?) and that I will invoice my Belgian employer directly.
However, I really do not know where to start with this.
- Can I as an expat start a company (the only thing I need to do within this company is make invoices)
- If I can start a company, what type of company would this be? (LLC?)
- what would be the minimum cost be to start such a company?

I would be very grateful if you could point me in the right direction with this.

Thank you very much.


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## Bevdeforges (Nov 16, 2007)

The way things work in the US, you may not need to set up a company at all. If you'll be invoicing your Belgian employer, you can simply be self-employed. For tax purposes, you'll have to file a Schedule C (for a personal business). But you don't necessarily need a business registration like you would in Europe.
Cheers,
Bev


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## kojtl1000 (Aug 25, 2011)

Bevdeforges said:


> The way things work in the US, you may not need to set up a company at all. If you'll be invoicing your Belgian employer, you can simply be self-employed. For tax purposes, you'll have to file a Schedule C (for a personal business). But you don't necessarily need a business registration like you would in Europe.
> Cheers,
> Bev


Thank you so much, Bev. This opens up opprtunities, as I already was partly giving up on the idea of setting up a company over here. Seems like a lot of hassle and costs, just for making a monthly invoice to my Belgian employer.
However, do you by any chance know if I can make this monthly invoice over here officially, so my Belgian employer can incorporate it in it's accounts?
What would be the procedure to start working 'self-employed'?


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## twostep (Apr 3, 2008)

It depends on what you do. I personally would never work without the coverage of an LLC and liability insurance. 

You can bill under your own name, file quarterly estimated taxes (which keeps the April 16 sticker shock down) and be on your merry way.


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## kojtl1000 (Aug 25, 2011)

twostep said:


> It depends on what you do. I personally would never work without the coverage of an LLC and liability insurance.
> 
> You can bill under your own name, file quarterly estimated taxes (which keeps the April 16 sticker shock down) and be on your merry way.


I would deliver remote IT services (write offers, technical documentation, quotes, ...) and invoice my Belgian employer on a monthly basis. 
So based on this info, I would think a Sole Proprietorship would be the way to go. The thing is that we are here already for 1.5 years out of 3. I do not want to invest a lot of money, setting up an LLC. Does this make sense?


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## expatgal (Mar 4, 2013)

kojtl1000 said:


> I would deliver remote IT services (write offers, technical documentation, quotes, ...) and invoice my Belgian employer on a monthly basis.
> So based on this info, I would think a Sole Proprietorship would be the way to go. The thing is that we are here already for 1.5 years out of 3. I do not want to invest a lot of money, setting up an LLC. Does this make sense?


Sole Proprietorship is the least expensive way to go. It's also leaves you open the most to liability.
LLC isn't too expensive, and you would have more protection.
I don't know if you own a home or not, or what your assets are, these are things you need to give serious thought to.
It's easy to check online for the ramifications and requirements of how to hold your business.
Yes, what you said makes sense...1 1/2 years left, BUT a lot can happen in that time, cover your assets.


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## BBCWatcher (Dec 28, 2012)

I really don't understand the liability concern here. The original poster was/is already an employee of the Belgian firm. Bridge well crossed, right? Besides, it's trivially easy these days to pierce an LLC in the U.S. Insurance might be good, but that'd be a generalized concern.

So the question is really how to continue working for that Belgian employer. I like Bev's answer. "Just do it," no business registration required, and file Schedule C (and probably also Schedule SE) with the IRS. Invoice the Belgian employer for services rendered.

By the way, I think on an L-2 visa you'd want to apply for an Employment Authorization Document (EAD) if you don't already have one. Just out of an abundance of caution.


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## BBCWatcher (Dec 28, 2012)

There's another option, and I'm surprised no one mentioned it already: go back on Belgian payroll. Switch from Leave of Absence to active employee (full time or part time), and get paid per normal in Belgium, in euro, working remotely. With Belgian tax and social insurance deductions and all Belgian labor law protections.

The U.S. has no problem with that arrangement either. Get your EAD (out of an abundance of caution) and simply report your earnings on your U.S. tax return. You'll take a Foreign Tax Credit to account for the Belgian income taxes, and assuming you file a joint U.S. return with your spouse in the U.S. those Foreign Tax Credits will probably even help reduce your spouse's U.S. tax burden a bit. (It depends, but that wouldn't be a surprising result.) You won't have to pay U.S. Social Security or Medicare tax on that Belgian payroll income since the U.S. and Belgium have a Social Security treaty. So that means you'll be adding months and years to your Belgian system contributions rather than (most likely) adding months and years to U.S. Social Security which you won't collect. And because you're being paid in euro and presumably will be returning to a place where your daily living expenses will be costed in euro, you get some currency protection.

That's an option, certainly.


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## Bevdeforges (Nov 16, 2007)

I'd check with the Belgian consulate first to see what the options are for just staying on the Belgian payroll. Unlike the US, Belgium doesn't collect taxes from its citizens resident overseas, and there may be some problem in hitting them for social security if they are not physically present in Belgium to benefit. (Most likely problems for the employer rather than the employee - but it would explain the employer's reluctance to handle things that way.)
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

Bevdeforges said:


> Unlike the US, Belgium doesn't collect taxes from its citizens resident overseas....


It's Belgian source income, isn't it? But if it's not, and if tax is withheld, a Belgian tax filing would refund it, and a U.S. tax filing would tax it. That still works.


> ....and there may be some problem in hitting them for social security if they are not physically present in Belgium to benefit.


The U.S.-Belgium Social Security treaty specifically provides for payment into the Belgian system for Belgians working for Belgian employers remotely from the U.S. (I provided the link to the treaty summary above.)


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## Bevdeforges (Nov 16, 2007)

I noticed this year that the French consulate is posting US tax information for French nationals in the US. You might take a look at the Belgian consulate site to see if there is anything similar that might be of use in this particular situation.

As far as whether it's "Belgian source" income or not - it usually depends on where you are while working to earn the money, not on the nationality of the employer. But again, it has been a LONG time since I studied up on Belgian taxation. 
Cheers,
Bev


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## twostep (Apr 3, 2008)

BBCWatcher - If you have never been hit with a liability issue then you might not see the sense of eliminating potential access to personal assets. All it takes is an error in a translation or a typo on a quote and the Belgian company may pull some fine print. 
What OP gave in potential responsibilities sounds like a virtual assistant. She will have to negotiate her status with the employer and have liabilities spelled out in her contract should she go the contractor route.
To answer her question again - she can work, bill her client and pay the respective US taxes.


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## kojtl1000 (Aug 25, 2011)

Thank you all very much for the valuable information.

Just to confirm, I do have an EAD, so no issue there.
Like I said, I would like to keep it as simple as possible. So if I can avoid setting up an LLC, that seems to be the way to go for me.
We do have assets, but not in the US. And I have been working for this Belgian employer for 14 years before this leave of absence. So we know each other. It would be like changing from an employer-employee relationship to freelancer.
The only thing I'm not really sure about is the invoicing. I'm guessing they would like me to invoice them in Euro. But for the IRS here I probably would have to write invoices in USD. We still have our bank accounts in Belgium (although we do not have our address in Belgium anymore). So my employer probably wants to pay the invoice in Euro to our Belgian bank account. I would have to transfer the money on a monthly basis to our US bank account. Would this work for the IRS?

I also wanted to add that my Belgian employer indicated that it would be almost impossible for them to cancel the leave of absence and put me back on the payroll because of the fact that we have our address in the US now...


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## twostep (Apr 3, 2008)

Of course you can bill in whatever currency you want to. 
What difference does you physical address make? Sounds funny.


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## BBCWatcher (Dec 28, 2012)

kojtl1000 said:


> I'm guessing they would like me to invoice them in Euro. But for the IRS here I probably would have to write invoices in USD.


You can agree to invoice in Thai Baht if you wish. The IRS has no problem with another currency. You just convert to U.S. dollars when you report that income to the IRS. The IRS publishes conversion rates, or you can use actual rates if/when you transfer money.



> We still have our bank accounts in Belgium (although we do not have our address in Belgium anymore). So my employer probably wants to pay the invoice in Euro to our Belgian bank account. I would have to transfer the money on a monthly basis to our US bank account. Would this work for the IRS?


Absolutely no problem.

Keep in mind FBAR and FATCA requirements (if applicable), requirements which already exist if you have a non-U.S. financial account (e.g. a Belgian bank account).

You may have to make quarterly estimated tax payments to the IRS on that income, so take a look at Form 1040-ES when you get a chance.



> I also wanted to add that my Belgian employer indicated that it would be almost impossible for them to cancel the leave of absence and put me back on the payroll because of the fact that we have our address in the US now...


That doesn't ring true. Some U.S. employers make the same excuse. But I'm sure your employer would have no problem paying a senior manager while she's spending 12 months helping to open a new branch office in Malaysia, for example. There are thousands of Belgians working outside Belgium every day for varying lengths of time abroad, and Belgian employers pay them on Belgian payroll. It's not rocket science, as they say.

No, usually the real reason is they don't want to provide you with the benefits (including labor law protections) of regular employment. Or at least they can't be bothered. If you're OK with that non-protected arrangement, no problem.


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## Bevdeforges (Nov 16, 2007)

kojtl1000 said:


> Thank you all very much for the valuable information.
> 
> Just to confirm, I do have an EAD, so no issue there.
> Like I said, I would like to keep it as simple as possible. So if I can avoid setting up an LLC, that seems to be the way to go for me.
> ...


Actually, it sounds like the easiest way to handle things. The IRS doesn't really care about the format or currency of your invoices (the way the authorities do back in Europe). Set up your bills however you need to - you just have to convert the various amounts to US$ for your US tax filings. 

You can certainly be paid into your Belgian account and then transfer money as you need it to your US account.

There are actually a variety of ways to do the conversion to $ - just pick one and stick with it. You could, for example, use the spot rate on the date you cut each invoice - not too much of a hassle if you're only billing once a month, and particularly if your expenses are going to be in US$. Or, you could just keep your books in euros and convert the whole mess at the end of the year using the annual average rate. 

It could be worthwhile to talk to an accountant or an enrolled agent to see if they could set you up with a simple system for recording your ins and out - and to prepare at least the Schedule C part of your tax returns for you. 
Cheers,
Bev


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