I’d like to set up a Limited Liability Company with four partners: One is a U.S. citizen (myself) and three are foreign citizens. I’ve heard that setting up a trust under the U.S. citizen’s name and then transferring funds into the LLC may be a good option. Are there any potential pitfalls here considering that a few of the LLC partners are foreign?
Answers
Before anyone can give you specific answers, they need to understand a lot more. Are you contributing cash or assets? Is the point of the trust to add a layer of insulation? Do you know about the foreign citizens who want to be your partners? Who will manage the US operation? With foreign partners, you need competent counsel to check whether the money has been transferred from the off-shore jurisdiction with any required consents in place. How did you pick your prospective partners? What do you know about them? Are the others from the same jurisdiction? If so, achieving the most advantageous tax structure will be simpler than accommodating the rules of multiple jurisdictions. Your advisor will need to know all of the facts to be helpful to you.