ALTERNATIVE US BUSINESS STRUCTURES

A C-Corporation (C-Corp) is a separate taxable entity that pays US corporate income tax on its profits. Unlike an LLC, a C-Corp is not a pass-through entity — it pays tax at the corporate level, and shareholders pay tax again when dividends are distributed (double taxation).

For non-residents, a C-Corp is generally less tax-efficient than an LLC. However, there are situations where a C-Corp is preferable:

• If you are raising venture capital: Most US venture capital firms require a Delaware C-Corp structure. • If you want to issue stock options to employees: C-Corps have more flexible equity compensation structures. • If you want to go public: IPOs are typically done through C-Corps.

For most non-resident entrepreneurs, the LLC is significantly more tax-efficient than a C-Corp.

An S-Corporation (S-Corp) is a pass-through entity like an LLC, but with significant restrictions. Most importantly, S-Corps cannot have non-US resident shareholders. This means that as a non-US resident, you cannot own an S-Corp.

S-Corps are relevant only for US residents and citizens.

A Limited Partnership (LP) has two types of partners: general partners (who manage the business and have unlimited liability) and limited partners (who are passive investors with limited liability). LPs are sometimes used for real estate investments and private equity structures.

For most non-resident entrepreneurs, an LLC is simpler and more flexible than an LP.

One increasingly popular structure is to use a Wyoming LLC as a holding company for other LLCs or assets. The Wyoming LLC holds the membership interests of operating LLCs in other states, providing an additional layer of asset protection and privacy.

This structure can be particularly useful for real estate investors, e-commerce entrepreneurs with multiple brands, or anyone who wants to separate different business activities into different entities while maintaining a clean ownership structure.

The LLC is not the right choice if:

• You are raising institutional venture capital (use a Delaware C-Corp) • You need to issue stock options to a large employee base (C-Corp is more flexible) • You are planning an IPO (C-Corp is required) • You are a US resident who wants S-Corp tax treatment

For all other situations — digital services, e-commerce, consulting, content creation, crypto, holding companies — the LLC is almost always the optimal structure for non-US residents.