Tax risks by country
A U.S. LLC does not remove your obligations in your country of tax residency. These are the points worth reviewing depending on where you live, before you sign up.
Spain
tax residency in Spain- Residency
Tax residency: if you're a Spanish resident, you're taxed on your worldwide income — the LLC doesn't "disconnect" you from the tax authority.
- Effective mgmt
Place of effective management: if you run the LLC from Spain, the tax authority may consider its effective management sits there and treat it as a Spanish company.
- Establishment
Permanent establishment / ETBUS: the line separating an activity not connected to the U.S. from a permanent establishment with local obligations.
- CFC
CFC / international tax transparency: rules that may attribute the LLC's profits to you even if you don't distribute them.
- VAT
VAT: your services may carry Spanish VAT depending on the client and place of supply, with or without the LLC.
Paraguay
territorial regime- Territoriality
Territoriality: Paraguay taxes Paraguayan-source income; confirm how your LLC's income fits that principle.
- RUC
RUC and local formality: if you operate or distribute locally, review your registration obligations (RUC).
- IRP 10%
IRP (10%): personal income tax may apply when distributing profits locally.
- Substance
Real residency: the favorable treatment requires effective residency, not just formal.
Other countries
review in detail with a local professional- Andorra
Tax residency and substance; confirm the treatment of foreign income.
- Argentina
Worldwide income for residents and possible transparency rules; review current regulations.
- Mexico
Residency and preferential tax regimes (REFIPRE) on foreign entities.
- Colombia
Worldwide income for residents and controlled foreign entity (ECE) rules.
- Chile
Residency and rules on foreign passive income.
Keep reading: what gets filed, when and by whom (FBAR + BEA) · territorial residency + LLC