Video · International Tax Lawyers New York City
AI Founders Moving to the U.S.: Holding Company Tax Mistake
If you're an AI founder, or you run a SaaS or software company outside the United States, and you're planning to move here, your company structure matters as much as your visa. One of the most common mistakes is adding a U.S. holding company on top of it.
Dilendorf Law Firm, New York 250 words, transcribed
If you’re an AI founder, or you run a SaaS or software company outside the United States, and you’re planning to move here, your company structure matters as much as your visa. One of the most common mistakes is adding a U.S. holding company on top of it.
In this episode, New York attorney Max Dilendorf explains why that structure can backfire, and the three U.S. tax rules every founder should know before becoming a U.S. tax resident.
He covers the personal holding company rules and the extra 20 percent tax on retained income, when a foreign company becomes a controlled foreign corporation (CFC), how the passive foreign investment company (PFIC) rules work, and why a holding company abroad can fall into these rules once you arrive.
Dilendorf Law Firm advises founders and executives of AI, software, and other technology companies on pre-immigration tax planning, U.S. market entry, and cross-border structuring.
The time to fix your structure is before you become a U.S. tax resident, not after. If you’re building in AI or software and planning a U.S. move, contact Dilendorf Law Firm first.
Full transcript
0:05 If you're an AI founder, or you run a SaaS or software company outside the United States, and you're planning to move here, one of the most common mistakes I see is adding a U.S. holding company on top of your structure.
0:20 I'm Max Dilendorf, a New York attorney. Here is why, and three things to know.
0:28 First, a U.S. holding company that mostly collects dividends can be a personal holding company.
0:33 If it retains that income, it can owe an extra 20 percent tax.
0:38 Second, CFC, or controlled foreign corporation. That is a foreign company more than 50 percent owned by U.S. shareholders.
0:46 Its profits can be taxed to you every year, even if it pays you nothing.
0:52 That includes the rules known as GILTI. At 50 percent or less, it is generally not a CFC.
0:59 Third, PFIC, or passive foreign investment company.
1:02 That is a foreign company with mostly passive income or assets, like many foreign funds. It brings heavy tax and reporting.
1:11 Now the trap. Many founders hold their operating company through a holding company abroad.
1:17 You own 100 percent of it, and it only collects passive income.
1:22 Once you are a U.S. tax resident, it falls into these rules.
1:27 So it may make sense to remove it before you arrive and own your shares directly.
1:34 Plan this before you become a U.S. tax resident.
1:38 If you're building in AI or software and planning a U.S. move, contact Dilendorf Law Firm first. Thanks for watching.
A transcript of the recording, so it reads as speech rather than as prose. It explains the law in general terms and is not advice on your own situation, which turns on facts this video cannot know.
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