My husband and I want to open a company in USA with two US residents, we are foreigners. The final scope is to open a coffee shop. We don't like the LLC option.
Every kind of business structure will do if the goal is to have a tax rate of less than 100%.
I suggest that you find an attorney on the Avvo site that you can have a proper and thorough consultation with and determine what structure and options are best for your specific situation and goals. It's worth the money and time for you to make informed decisions with your business.
Best of luck to you and the business.
Any and all communication of information by or through this Web site and your receipt or use of it does not create or constitute an attorney-client relationship with the Tobin Law Group, PL, Bradley A. Tobin or any of its agents or representatives. Such information is not provided or intended as a solicitation and does not convey or constitute legal advice. It is strongly recommended that you seek the advice and consultation of a qualified attorney on your specific matter. The hiring of an attorney is an important decision that should not be based solely upon Web site communications or advertisements.
For the purposes of Federal Income Taxes, a business is only taxed on its net profits. Here is an overly simple illustration:
Suppose the business tax rate is 10% (it isn't, but I want to keep this example simple). Let's say the coffee shop makes a gross revenue of $100,000 a year. In the course of that year, it spends $10,000 for coffee beans, $10,000 for renting the store, $10,000 in wages to employees.
The net profits of the store (gross receipts less cost of goods sold and expenses) is $70,000. The taxes the business owes for that year would be 10% of the net profits, or $7,000. That means the after-tax profits of the business are $63,000.
I hope that helps you understand how income tax on a business works.
If you mean opening a business in a way that does not place the non-residents in to a reporting requirement with the US tax system, then your option would be to use a C-corp, or a C-corp as a blocker company for the non-resident persons. The advantages to a C-corp are that shareholders of the company are only taxed when there is a dividend or distribution. The disadvantage is that the corporation is taxed on its income and then the shareholders are taxed on dividends/distributions (double taxation). LLCs can elect C-corp treatment, or you can form a statutory corporation.
You really should speak with a business/tax attorney who is familiar with structuring international investments. This can be a tricky area of law and it can be a problem if things aren't done correctly.
Information provided in this forum is for generalized discussion proposes and should not be considered legal advice. NO ATTORNEY-CLIENT RELATIONSHIP IS CREATED THROUGH THIS INTERACTION. While claims or statements made in communications on this forum are believed to be reasonably accurate at the time they are made, no warranty is made or implied as to their accuracy or completeness and such statements may not be relied upon, may not be used for tax or other filings, and may not be relied upon for relief from any interest or penalties.
As non-US residents your options are more limited than that for US residents and citizens. You also don't want to overly complicate your structure on what seems to be a smaller investment (in the sense of keeping legal fees in line with the amount of the investment). The LLC form is usually the best suited so I would be interested to know why you don't like it. However, there are still several structures that can accommodate foreign investment. This is definitely a situation where consultation with any attorney is recommended.
This answer if for general information purposes and should not be construed as legal advice. Please consult an attorney of your own choosing before taking any action.
I believe your question is "what type of legal entity would best benefit us for tax purposes, given that we are foreigners opening a coffee shop in the US with two US residents". Assuming you do not live in the US, it eliminates the possibility of you forming an S-Corporation, which is usually the most tax advantageous entity for small businesses. Aside from that, your question is too broad/general for anyone to be able to give you advice specific to your situation. You can ask the question again providing more detail, however, your situation likely requires speaking with someone. It's not necessarily complicated, and very likely could be answered with a 15 minute phone consult, but there are too many variables for anyone to competently state a precise answer without more information.
Years licensed, work experience, educationLegal community recognition
Peer endorsements, associations, awardsLegal thought leadership
Publications, speaking engagementsDiscipline