Investing in and/or Owning Your Own Business

If you invest in a foreign corporation or start a business corporation of your own, there are some advantages.

One of the advantages is that you are generally not taxed on the profits until you either take the earnings as a dividend or in the form of a wage. Even then you may escape tax on the income because of the foreign tax credit or the foreign earned income exclusion.

If you are an officer, director, or more than a 10% stock holder of a foreign corporation, you are required to attach an additional set of forms to your tax return. The amount of information that you must supply on these forms depends on the amount of ownership in the corporation and position with the company.

Failure to file this form can result in a variety of fines and penalties in the hundreds of thousands of dollars. The fact that the company is not making a profit does not release you from filing this form. Even if you have an inactive corporation for your car, home or other assets you are required to file this form with your tax return.

In today’s world of computers and internet, the exchange of information between countries is commonplace. The United States has an exchange of information treaty with many countries.

Download the following forms and email them to info@ustaxinternational.com

Form 2848 Power of Attorney and Declaration of Representative

Form TD F 90-22.1 Report of Foreign Bank and Financial Accounts

U.S. Tax and Accounting Information Form