The company itself · A term for founders abroad
What is a holding company?
A company whose business is owning other companies or assets rather than trading; a Wyoming LLC is common, subject to the owner's home-country rules.
Checked against the IRS's instructions and the states' own rules. Reviewed by Saais Patel, compliance reviewer.
Term 58 of 105 in the glossary, filed under H.Every term, A to Z
Holding company, for a founder abroad.
A holding company owns shares in operating companies, or intellectual property, domains or investments, rather than trading itself. Founders abroad often use a Wyoming LLC for the low yearly cost and the private record.
Whether it achieves anything depends on your home country's rules on controlled foreign companies, which can tax a foreign holding company's passive income to its resident owner as it's earned. A US holding LLC that owns an operating LLC is also simple for US tax: both can be disregarded.
Read next · guide · 2 minMember-managed or manager-managed: who runs the LLC, and why a bank caresWhat founders ask next.
- Is a Wyoming holding company a tax shelter?
- Not for a founder abroad by itself. Your home country usually taxes you on what it earns, and US filings such as Form 5472 still apply.
03 · See also
- The company itselfSeries LLCAn LLC that can create internal series, each with its own assets and liabilities, allowed in Delaware, Wyoming and some other states; rarely needed from abroad.Read the term
- The company itselfLLCA US company whose owners aren't personally liable for its debts, and whose profit is taxed once, to the owners, unless it elects otherwise.Read the term
- The company itselfC-CorporationA US corporation taxed on its own profit, which issues stock and is what US investors' paperwork assumes; usually formed in Delaware.Read the term
- The company itselfS-CorporationA tax election that lets a US corporation or LLC pass its profit through to its owners; not available if any owner is a non-resident alien.Read the term
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