How to Structure Your Online Business for International Living
Entity selection, tax considerations, and practical guidance for location-independent businesses
Overview
For Americans who run online businesses and are considering international relocation, business structure decisions have significant tax and legal implications. The right structure depends on your specific situation, income level, where you live, and your long-term plans.
US LLC: The Default Choice
Many Americans abroad continue operating through a US LLC (typically formed in Wyoming, Delaware, or New Mexico). A single-member LLC is a disregarded entity for US tax purposes, meaning income passes through to your personal return.
Advantages
- Simple and familiar structure
- Well-understood by US banks, payment processors, and clients
- Pass-through taxation simplifies US filing
- Strong legal protections
Considerations
- Some countries may treat your LLC as a local tax-paying entity
- Banking can become complicated with a foreign address
- Registered agent required in formation state
Foreign Entity Options
Depending on your destination, forming a local entity may provide tax advantages or be required by local law.
Key Tax Considerations
- FEIE and FTC elections affect how your business income is treated
- Self-employment tax applies regardless of where you live
- FBAR and FATCA reporting requirements for foreign accounts
- Transfer pricing rules if operating through multiple entities
Important Disclaimer
This content is for educational purposes only. Business structure decisions have significant tax and legal implications. Consult with qualified cross-border tax and legal professionals before making any decisions.