Is a US LLC Pass-Through for Dutch Tax? Normally Not

0:00Can a Dutch resident own a US LLC?

Sanne builds software in Amsterdam. Many of her customers are in the United States, and some want a US company to buy from. So, can she have one from the Netherlands? As far as America goes, yes. No social security number, and no trip to the US. Cheyenne, in Wyoming, is usually eight hours behind Amsterdam. It's all done online, so she never needs to be up in US hours. We're BaseAcross.

We set up US companies for founders outside America, so we'll be straight with you. The American side is simple. The Dutch side is where the thinking is. Let's walk down the street, one house at a

0:41Do I need a US company for Stripe?

time. First house: does she need one at all? Here's what's different about the Netherlands. The big card processor already supports Dutch businesses. A Dutch BV gets you card payments too. And a BV is what Dutch banks and the tax office understand. So card payments aren't the reason. The reasons are US buyers who want a US vendor, US platforms that ask for one, or US investors. Sanne has the first one.

If you don't, ask your adviser whether a BV would serve you better.

1:15Is a US LLC transparent for Dutch tax?

Second house, and it's the one most videos get wrong. Online, you'll read that a US LLC is pass-through, so its profit simply lands on your Dutch return. America usually looks straight through an LLC with one foreign owner. The Netherlands normally doesn't. A Dutch decree now lists the US LLC as comparable with a BV. It's a presumption, and the facts can rebut it. But normally, the LLC is taxed as a company in its own right, not as you.

Then, where it's run. Whether a company is Dutch-resident depends on the facts, and where it's managed weighs heavily. If it's run from Amsterdam, it can pay Dutch corporate tax.

2:01Wyoming or Delaware, and an EIN without an SSN

Third house: forming the company, and this part is quick. A Wyoming LLC for a business you run yourself, once you know where it will be managed. A Delaware C-Corp if US investors want shares. For Dutch tax, both are normally companies. The company needs a registered agent, an address in that state for legal papers, not where you work. Then the EIN, its US tax number. Without a social security number, it's a paper form to the IRS.

You'll pay in US dollars, so check your card's exchange rate and fees.

2:38Opening the bank account

Fourth house: the bank, and from the Netherlands it's the easy part. The US fintech banks most videos recommend take applications from founders here. And a multi-currency account can give the company US account details. One bank asks every owner for a physical US address, so read the rules first. Each provider decides for itself, and any of them can decline. So use the same name, address and description of the business everywhere.

3:10How is what the company pays me taxed?

Fifth house: what the company pays you. If you hold a set share or more, and a sole owner does, its dividends are taxed in box 2. One rate up to a yearly amount, and a higher one above. Here's the guide's own illustration. Sanne's LLC makes a hundred thousand euros of profit, and she manages it from Amsterdam. Managed here, it pays corporate tax of nineteen thousand. It pays her the remaining eighty-one thousand, and box 2 takes twenty thousand six hundred and thirty-four.

That's thirty-nine thousand six hundred and thirty-four in all. It's an illustration, not a quote. It leaves out dividend tax, which is a question for your adviser.

3:54The treaty and the IRS report

Last house: the American side. There's an income tax treaty between the Netherlands and the US, and it's in force. It removes US withholding on interest and royalties, and caps it on dividends. But pay for work you do in the Netherlands generally isn't US income, so for a services business the treaty matters less. The company still files a yearly report with the IRS, even in a year without sales, and missing it is expensive.

It's usually due in the spring, and there's a form to ask for more time, filed before the deadline.

4:31The order to do it in

So here's the order. Take the Dutch questions to your adviser first: how the LLC is classed, where it's run and how it pays you. Then form, then bank. Treat what the company pays you as a distribution until your adviser says otherwise. Put the IRS report and your Dutch returns on one calendar. The full guide, with every source and a checklist for your adviser in English and Dutch, is linked below.

And Sanne? She asked her adviser whether a BV would do the job, before she ordered anything.