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Recently, a company introduction foreign trade bureau to set up companies in California enterprises USA, solve the problem is widespread, estimation also has reference significance to other gas ah friends, now in my blog for your reference:

 

Problem a: a China enterprises in USA California investment, should take what kind of identity tax the most reasonable and favorable (partnership, corporation or other)?

 

1. overseas investment in California, there is no similar to our country "investment industry directory" and the proportion of investment restrictions, professional agencies generally able to complete the registration within 30 days.

 

2 the establishment of the company, there are four main categories: Investment Company (Solo Proprietorship-SP) partnership, limited liability company, joint stock company. (distinguish specific see below).

According to the different nature, recommended the establishment of different enterprises: such as service enterprises and trade type enterprise, proposed the establishment of LP or LLP, if it is to buy land, build factories, production enterprises, proposed the establishment of.

Tax categories of taxes, tax rates, to enjoy preferential tax measures, shall be combined with the specific industry in the region in California, setting up a company location, number of employees (Full-time), to promote and other factors on the environmental protection and technology to make specific distinction.

In California, and China tax collection system, adopted a federal taxes and state taxes parallel. The federal tax on personal income tax, social security tax, followed by the corporate income tax, consumption tax, estate and gift tax, tariff; state tax sales tax, supplemented by income tax; local tax on property tax.

Such as the establishment of LLC in California, mainly should pay taxes: corporate income tax (15%-35% cut progressive), social insurance tax, sales tax, personal income tax (for non resident shareholders California refers to the domestic income, non global income), while California and even the whole USA no similar domestic value-added tax (VAT.

 

 

Question two: the Chinese enterprises in California USA tax return, will face double taxation and tax issues at home?

1       Set up companies in the US, is America legal subject, the enterprise itself only in the Chinese return investment, it relates to the corresponding tax issues. No tax in America business activities Chinese.

2       The shareholders of the enterprise is Chinese, according to Chinese nationality and sources of income in a double standard, if Chinese personal or corporate shareholders need will profit into the domestic and foreign exchange, according to the income tax law Chinese tax, personal income tax by the declaration, the enterprise income tax by the subjects into profit earnings, planning the levy.

 

Attached: America different company types and distinguish:

 

General company (Solo Proprietorship-SP)

 Definition: a) only one owner, the owner shall bear unlimited liability for the debts of the company.

 B) features: 1) there is only one owner.

　　　 2) assume unlimited liability for the debts of the company.

3) does not have legal personality independent in law.

4) no corporate income tax, tax preference.

5) create a low cost, flexible mode of operation.

 Application of C): generally used in relatively small scale, less company personnel.

 D) tax: assume independent entity is not a federal or state income tax. Owned firm owners on worldwide income America pay self employer tax (self-employment tax).

 E) Name: general to "Co", "Company" to the end, or no specific ending.

 

The partnership (General Partnership-GP)

1) in general partnership partner may be a natural person, legal person or other social organizations.

2) all of the partners of the partnership debt are jointly and severally liable for the.

3) general partnership enterprises do not have the minimum registered capital requirements.

4) general partnership enterprises do not pay enterprise income tax.

5) partners jointly funded, joint management of partnership enterprises, engaged in a partnership process each partner mutual agent and bear the obligation of loyalty and not to compete.

C) application: general partnership is a form of business organization is traditionally used in USA services, common in the legal, accounting, medical and other industries.

D) tax: general partnership enterprises do not pay enterprise income tax, the income share of the general partners pay self employment tax.

The name E) features: American "Uniform Partnership Act (1994)" did not make specific provisions for the partnership name. General for Company, Partnership, Partner etc..

 

Limited partnership (Limited Partnership-LP),

A) definition: this system is arranged by the capital owners to provide funds to trade the operator, the part of investors in accordance with the agreed profit, but will not be more than financed outside of the loss; if the operator does not have individual fault, investors should not require the operator shall bear the responsibility for compensation for the loss of investment.

B) features: 1) depending on the limited partnership liability form of partner is divided into general partners and limited partners (general partner) (limited partner) two.

2) with at least a general partner in a limited partnership, he (they) shall bear unlimited joint and several liability of limited partnership debt.

3) limited partner only its contribution is limited to the limited partnership enterprise limited liability debt, but limited partners in limited partnership affairs without authority, the once intervention in the management of partnership affairs is regarded as a general partner, assume unlimited liability.

Application of C): limited partnership form of organization is widely used in all kinds of risk investment operations.

D) tax: limited partnership (LP) tax policy with the same partnership, need not pay enterprise income tax.

Name: e) in the enterprise name must have "LP", "Ltd", "Co., Ltd", otherwise it will be considered as a general partnership, all the partners shall bear unlimited joint and several liability.

 

The limited liability partnership (Limited Liability Partnership-LLP),

Definition: a) American method will be limited liability partnership (LLP) as a general partnership (GP) is a special form of liability, limitation of liability protection only ordinary partnership can apply for to enjoy limited liability partnership.

B) features: 1) the limited liability partnership partners are all general partners, and is similar to the general partnership in the operation and management.

2) generated on a partner, staff in providing professional services, not as an error, negligence, low ability or negligence tort and liability for breach of contract, all partners to all the partnership assets shall bear joint and several liability for the debts of a limited partnership assets, more than the total amount of outstanding debt in unlimited responsibility of the fault partner independent, the other partners shall no longer bear joint and several liability.

Application of C): a limited liability partnership form of organization in America is widely applicable to large-scale public accounting firms, law firms and other professional partnerships, the four major international accounting firms and the vast majority of American law firms with limited liability partnership enterprise form.

D) tax: a limited liability partnership (LLP) tax policy with the same partnership, need not pay enterprise income tax, the income share of the general partners pay self employment tax.

E features: LLP) name of enterprise name must contain a "registered limited liability partnership", "limited liability partnership", "R.L.L.P.", "RLLP", "L.L.P.", "".

 

Limited liability limited partnership ((Limited Liability Limited Partnership-LLLP),

A) definition: a prerequisite for limited liability limited partnership liability forms must be a limited partnership, limited liability limited partnership (LLLP) as a limited partnership (LP) is a special form of liability.
B) features: protection of limited partner investors limited liability, also enjoy limited liability partnership (LLP) to protect the limited liability in the general partner of conditional. General partner only to their own fault for the loss caused by risk investment enterprises assume unlimited liability, and other general partners in the management of venture capital funds in the process of the fault does not bear joint and several liability.

Application of C): limited liability limited partnership and limited partnership, mainly is suitable for the industry of venture capital investment.

D) tax: limited liability limited partnership (LLLP) tax policy with the same partnership, need not pay enterprise income tax.

E) Name: enterprise name must have "LLLP" to indicate its form of liability.

 

Limited liability company (Limited Liability Company-LLC)

 A Limited Liability Company ) definition: a substance similar to all partners shall be a limited partner of the partnership, Limited Liability Company without any "company law" USA federal or state regulations, apply "America uniform limited liability company Uniform Limited Liability Company Act (ULLC1994)". LLC is a new type of corporate entity.

Limited liability company integration of joint-stock companies and partnerships with their respective advantages, avoiding double taxation, and make the shareholders only assume limited liability company, is a form of America popular nowadays. LLC legal entity to provide full personal responsibility to protect its members, whether it is civil tort, or contract responsibility, problems are solved jointly by the participants, this form known as a member of the administrator. This member can be a person or corporation.

The LLC application procedure is easier than the joint-stock company, LLC without a formal meeting of shareholders, no need to submit the annual management report, also can choose the tax form. The disadvantages are: some industries, such as banking, trust, insurance, is prohibited from using LLC finite liability form.

Limited by Share Ltd(Corporation)

Limited by Share Ltd is refers to the total capital divided into equal shares, shareholders of its holdings of shares shall be responsible for the company, corporate responsibility for the debts of the company with all its assets, (can be divided into CCorp. and SCorp. two in American).

Listing Corporation has the advantages of wide range: equity, financing capability, business continuity, enhance the credibility and visibility. But the bad place is: Double Taxation, company profits tax, employee income to pay taxes; the establishment of procedures are complex, high cost, high cost of access. Non profit corporation (Non-profitcorporation)

 

 

If must be detailed consultation or service, please contact

Zhejiang Haitai law firm partner, director of international law (13325944309): Wu Huilin.