Private & LLC

While registering your Amazon account you can face the dilemma: «Should I do business as a private entity or register an American company?». 🤷‍♂️

Tax liability and tax reporting are some of the most important aspects that concern our clients who want to register LLC via Tax Free Corp.

The fact that you must maintain a complex accounting record and submit reports sometimes stops entrepreneurs from registering as an LLC. Is it 100% true that only LLCs must do this?

We would like you to know that all Sellers on the US market who do not have an LLC must declare their tax bill if they had at least one Pay Off Check from Amazon.

For example, if you own a Single Member LLC, filing a tax return is the same as for a self-employed person (those who trade as a private entity), and it does not matter which country you live.

Any individual who has an income in the United States must file tax returns. This means you can report being a tax resident of a foreign country and pay taxes there (due to an existing agreement between the countries). In this regard, the declaration for the US Internal Revenue Service will be informational. The situation is similar for owners of accounts with one founder LLC.

LLC is a "transparent" structure and all income goes directly to the founder (in the case of a Single Member LLC with the taxation of a Disregarded Entity).

You may be surprised to hear that an LLC is NOT taxable, whether it is an LLC with one founder or several, (if the C-Corp status is not selected). This type of company owner is considered as self-employed entrepreneurs by the US tax service (Uncle Sam does not care if you work as an individual or as an LLC).

Let us consider a situation where a non-resident of the United States has been operating as a private entity on Amazon for years due to the fear of paying a lot of taxes. The truth is that these are the taxes you need to pay, whether you have a company or not. You, as an entrepreneur, are a subject for the tax service (IRS), regardless whether you have an LLC or not. There is no difference in legal liability to the tax authorities.

Moreover, you are personally and financially responsible to all counter-parties (US public authorities, Amazon, business partners).

The benefits of registration an Amazon account with an US LLC are:

👉🏻 Limited personal liability;

👉🏻 Easier to open brands and categories;

👉🏻 Requests for invoices are received less frequently and cases for them are resolved faster;

👉🏻 Available for sale in the pesticides category;

👉🏻 The ability to create a larger number of Asinos on your Amazon account by FBA;

👉🏻You can work in other marketplaces, not just on Amazon

In conclusion, we would like to say that if you are doing business on Amazon the difference in taxation between an account on an individual and the account on the LLC would be approximately equal to the amount of the annual renewal of the company…

So why deny yourself the opportunity to move forward and scale?