Offshore (Non-Resident) Delaware LLC for (day) trading US stocks

Finlanta · Jul 15, 2019

Looks like Delaware LLC:s are not taxed at all. Only tax you pay is 400usd Franchise tax. Tax return itself can be 500-1000 dollars and if not made in time IRS could fine you for 10000usd.

blueraincap · Jul 19, 2019

thing is there are cost downsides (data etc) when trading thru a corp, regardless of tax consequences. 學海無涯

otctrade · Nov 24, 2019

Good luck finding a brokerage firm willing to open an account for a foreign-owned US LLC though.

questionsanswers · Apr 19, 2021

blueraincap said:
thing is there are cost downsides (data etc) when trading thru a corp, regardless of tax consequences. 學海無涯

Hi, did you end up figuring out the answers to your questions?
I'm wondering the exact same thing about setting up a LLC in Delaware for day trading as a non-resident. My understanding is that since a single member LLC is a pass-through entity i'd be taxed the same as a NRA without the LLC, which means if like you I'm a HK resident there's no capital gain tax.
Would I even need to file a US tax return in this case if I trade through the LLC?

questionsanswers · Apr 19, 2021

otctrade said:
Good luck finding a brokerage firm willing to open an account for a foreign-owned US LLC though.

Hi, this might be a basic question..but why would it be difficult to open a brokerage account in the US for a foreign-owned US LLC?

blueraincap · Apr 22, 2021

questionsanswers said:
Hi, did you end up figuring out the answers to your questions?
I'm wondering the exact same thing about setting up a LLC in Delaware for day trading as a non-resident. My understanding is that since a single member LLC is a pass-through entity i'd be taxed the same as a NRA without the LLC, which means if like you I'm a HK resident there's no capital gain tax.
Would I even need to file a US tax return in this case if I trade through the LLC?

LLC is a LLC, so you will be treated like a LLC.

otctrade · May 5, 2021

questionsanswers said:
Hi, this might be a basic question..but why would it be difficult to open a brokerage account in the US for a foreign-owned US LLC?

Good question. Unfortunately the brokers don't specify that(only domestic LLCs allowed) anywhere so it's just a lot of wasted money going through the process.

gorkemk93 · Feb 13, 2022

otctrade said:
Good luck finding a brokerage firm willing to open an account for a foreign-owned US LLC though.

I have called Fidelity and they told me it's ok? Is your message still valid now in 2022?

otctrade · Nov 30, 2022

gorkemk93 said:
I have called Fidelity and they told me it's ok? Is your message still valid now in 2022?

Hi sorry didn't see your message. I haven't tried since 2019 so I can't say with certainty. Have you had any luck?

Business2122 · Mar 24, 2023

blueraincap said:
I am a resident in Asia and been (day)trading US stocks through a HK broker with 0% capital gain tax. I also have a Delaware LLC for some non-US related import business, which is not subject to any US tax. Now, if I open a brokerage account in HK using this LLC to daytrade US stocks (I am trading from outside of US as a non-US resident), will I be subject to US tax? What do you think

You’re only subject to tax in the country the brokerage is in, the country they report your transactions to is who you’ll send a percentage of your revenue to. Like if you trade HK stocks using a HK entity through a Jamaican brokerage, then you’ll pay Jamaican taxes not HK. (But there’s no tax on capital markets in Jamaica really), but this is just an example