HOW YOUR HOME COUNTRY TAXES YOUR US LLC

A US LLC is a 'pass-through' entity for US tax purposes. This means the LLC itself does not pay US income tax — instead, the profits 'pass through' to the owner and are treated as the owner's personal income.

Most countries follow a similar approach when dealing with US LLCs: they treat the LLC's income as the owner's personal business income, taxable in the country where the owner is tax-resident.

The ZeroTax LLC structure is most beneficial for individuals who are tax-resident in:

• Countries with territorial tax systems (only domestic income is taxed): Panama, Paraguay, Georgia, Malaysia, Thailand, Philippines, and others • Countries with low flat-rate income tax: UAE (0%), Bahrain (0%), Cayman Islands (0%), and others • Countries with special regimes for foreign income: Portugal (NHR — 10% flat tax), Spain (Beckham Law), Malta, Cyprus • Digital nomads and perpetual travelers with no fixed tax residence

In a territorial tax system, only income earned within the country is subject to local income tax. Foreign-source income — including income from a US LLC — is generally not taxed.

Examples: Panama, Paraguay, Georgia, Malaysia, Thailand, Philippines, Costa Rica, Nicaragua, Honduras.

For residents of these countries, the ZeroTax LLC can achieve a genuinely low overall tax rate — potentially close to zero on the LLC income.

Some countries have no income tax at all: UAE, Bahrain, Cayman Islands, Bermuda, Monaco, and others. Residents of these countries pay no income tax on their LLC income anywhere in the world.

Several countries offer special tax regimes for new residents or foreign-source income:

• Portugal NHR: 10% flat tax on foreign income for 10 years • Spain Beckham Law: 24% flat tax for qualifying expats for 6 years • Malta: Favorable tax treatment for non-domiciled residents • Cyprus: Non-domiciled residents pay no tax on dividends or interest

The ZeroTax LLC is NOT suitable for individuals who are subject to unlimited tax liability in high-tax countries. This includes residents of Germany, Austria, Switzerland, France, the Netherlands, and most other EU member states.

In these countries, your worldwide income — including income from a US LLC — is subject to local income tax. The fact that the LLC is tax-exempt in the US does not exempt you from paying tax in your home country.

For German citizens specifically, there is an additional complication: the 'extended limited tax liability' rules (§2 AStG) can apply to German citizens who move to low-tax countries, potentially maintaining German tax liability for several years after emigration.

Tax treatment varies significantly by country and individual circumstances. The information above is a general overview — not tax advice. Before forming a US LLC, always consult a qualified tax advisor in your country of residence who has experience with US LLC structures.

ZeroTax LLC offers consultations to help you understand the overall picture — but we are not a tax advisory firm and do not provide tax advice for your home country.