US company formation service claims that foreign entities that does not have any US-connected income are not subject to tax. How true is this? : legaladvice


Hello there r/legaladvice. I came across a service called startfleet, that helps in forming companies in the US. They register companies in Wyoming and Delaware. In their FAQ’s they claim:

Do I need to pay taxes in the US?

In general, if the members of a US LLC are foreigners and the entity does not have any US-connected income, the company will not be subject to US federal taxation. Even if you sell to customers in the US, simply selling products or services through your US company does not subject you to US federal taxes. However, if you incorporate a US C Corporation, you will be subjected to 21% federal income tax.

How accurate is this? Thanks in advance.