We are an "S" Corp wishing to convert to a "C" Corp. Would converting to an LLC Corp be a better idea?

Congratulations on attracting investors.

Foreign businesses are not allowed to operate as an S Corp which is why I assume the investors are requesting that you change your status.

Foreign companies can invest in an LLC. LLCs do not have shares.

For tax questions, I would suggest you speak to a CPA knowledgeable in international business transactions. What you are proposing to do is a complex endeavor. You should consult with a business attorney before negotiating with the VCs or converting your business entity.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

If you do have funding interested, then you may want to convert to a C-Corp. It is fairly simple check-the-box action. Moreover, VCs normally avoid investing in LLCs because they risk getting an income tax termed unrelated business tax income (UBIT). VCs frown on this income and most often the VC funding agreements contain provisions that state that the VC will use its efforts to avoid UBTI.

You really must retain legal counsel if you are thinking of getting investors. The complexity of the agreements, the securities laws, and tax consequences are considerable and not something anyone other than an experienced counsel would know completely.

Each entity will have the same characteristics of limited liability, assuming it is properly formed, funded, and maintained. This is yet another reason to retain counsel. Funding is never something that should be considered without professional advice or you will make mistakes that will cost you hundreds of times more than what you would have paid at the outset.

DISCLAIMER—This answer is for informational purposes only and discusses general legal principles, trends, and considerations and is not intended as specific legal advice regarding your question. This answer does not establish an attorney client relationship. For legal advice, you should retain legal counsel in your state for advice regarding your specific circumstances.