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Ask HN: Should a German founder with a green card set up a holding company?

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Re: Ask HN: Should a German founder with a green card set up a holding company?

#11

Post by yieldcrv »

The greencard doesn't really matter except for making it simpler to get a tax ID for your new company in the US. but its not really a hurdle or benefit or factor, since non-greencard non-citizens can be tax persons to the US, which is really the most complex part.

The holding company is just for limited liability, as well as being incorporated domestically in the US simply makes it more familiar for banks and the target companies to work with.

So should you? I think everyone should, just for the consolidating and separation of assets. Being able to transport a name and address that's not yours. (ie. you can be in Miami partying all the time, while your super serious Delaware holding company has the super serious Silicon Valley office address and upholds the stoic investing brand)

The US doesn't have those specific tax benefits for doing it, but there are many others, which may be enhanced by the holding company, but not necessarily.

Re: Ask HN: Should a German founder with a green card set up a holding company?

#12

Post by germanier »

mrunkel wrote: post #8
Nashooo wrote: post #7

Earlier quoted context omitted.

>Does Germany tax non resident citizens (almost certainly not only the US does)? I think only on income or assets generated in Germany whilst abroad. I do believe the US is one of the only (if not the only) countries that taxes non residents on their income generated abroad.

No, I’d you don’t have tax residency in Germany, you don’t pay income taxes in Germany. Independent of citizenship. Only the US and Somalia levy income tax on non-resident citizens.

Certain kind of income is taxed even without tax residency (so-called beschränkte Steuerpflicht). This is independent of citizenship though.

Only for public servants working and living abroad German citizenship is relevant when it comes to taxation (this concerns mostly diplomats and such).

Re: Ask HN: Should a German founder with a green card set up a holding company?

#13

Post by AlchemistCamp »

mrunkel wrote: post #8
Nashooo wrote: post #7

Earlier quoted context omitted.

>Does Germany tax non resident citizens (almost certainly not only the US does)? I think only on income or assets generated in Germany whilst abroad. I do believe the US is one of the only (if not the only) countries that taxes non residents on their income generated abroad.

No, I’d you don’t have tax residency in Germany, you don’t pay income taxes in Germany. Independent of citizenship. Only the US and Somalia levy income tax on non-resident citizens.

> Only the US and Somalia levy income tax on non-resident citizens.

This is not true and dangerous advice to follow. For Canada, see: https://travel.gc.ca/travelling/living-abroad/taxation

Re: Ask HN: Should a German founder with a green card set up a holding company?

#14

Post by tazjin »

noodlesUK wrote: post #4

In which jurisdiction would you be starting the main company and the holding company? You mentioned you’d incorporate in the us, but for which entity? Both? I strongly recommend against a US person including non-resident citizens owning a foreign company, especially as a holding company or similar because the compliance is effectively impossible to manage without thousands of dollars in accountancy (see IRS form 5471…

> almost certainly not only the US does

You are right - there is another country that has citizenship-based tax (Eritrea).

Re: Ask HN: Should a German founder with a green card set up a holding company?

#17

Post by 0xfaded »

splix wrote: post #6

Slightly offtopic, but in US how you should go if you want to do small investments in other companies or just assets? Like angel investing. Should I set up an independent LLC just to simplify account on my personal taxes? Would be it be easier or more complex in this case? How it's taxed? How it's usually done?

Google mega-backdoor Roth IRA

Re: Ask HN: Should a German founder with a green card set up a holding company?

#18

Post by seppel »

Wronnay wrote: post #9
TekMol wrote: post #2

Can you put your business into a holding company later on, or does it have to be done before you launch?

You can also do it later on. If you are the sole owner, then you can also do all of that in one business. I have my operational side and investments (like stocks) in the same company. My plan is, to spin operational businesses off as soon as the legal risk gets too high or as soon as I seek for other 3rd party investors.

> You can also do it later on.

In Germany it is tricky to do it later and is a taxable event.

Re: Ask HN: Should a German founder with a green card set up a holding company?

#19

Post by gumby »

If you have a green card (I do) you're subject to US tax laws and a holding company doesn't buy you anything. You may want to put them into a trust, though, however you can decide when you want to do that (if you are single it's in almost every case not worth it) because putting your assets into a trust for your benefit isn't a taxable event.

Incorporate your companies in the US. Since 2017 the US is a "low tax" regime for corporations and anyway, you'll presumably be actually doing business here so you'll need a US (delaware) corp. Don't make your life unnecessarily more complicated.

I have lived in Germany but only had to deal with German salary. I didn't need to tell them anything about my assets outside German. Of course tax law can have changed. But if you don't intend to go back to Germany then only the US tax case matters.

In general I make little effort to try to minimize my taxes. Instead I just live my life.

Re: Ask HN: Should a German founder with a green card set up a holding company?

#20

Post by fsckboy »

other people are answering you with more knowledge than I have, but a slightly little off-the-wall suggestion, depending on where you need to be, there is a great tax incentive within the US to set your business up in Puerto Rico, but you need to spend a significant amount of time there. However, being an island in the Caribbean, that might be considered a bonus.
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