Bookkeeping

US company with foreign shareholders

What are the tax considerations of distributions when a company is formed in the US but has foreign shareholders? Is it possible to have a US formed company with foreign operations?

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  1. 74 Answers

    Hi, when a US corporation makes distributions to foreign shareholders the distributions are subject to withholding taxes based on if the US has an income tax treaty with that country. This tax amount can be as much as 30% and as little as 5%. However, there are many factors that have to be considered such as the type of distribution, is it a dividend or maybe something else, such as capital gains or property distributions. This can be a complex topic and there are a myriad of questions that would need to be answered to determine if the distribution would be taxable.

    Regarding your second question yes you can have a US company with locations around the world. The company would be responsible for local taxes (US taxes) as well as foreign taxes depending on location and other factors that I do not have information on at this time. Any specific taxation question would depend on the circumstances. Any information in this post is not provided as tax advice and should be considered as general information regarding a broad topic. I am not giving specific tax advice.

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