Each year, the U.S. tax system becomes less friendly to foreign startups — but also more transparent. In 2025, the IRS and Congress finalized a number of rules that significantly impact how international companies operate with the U.S. market.
This article is a guide for those already working with U.S. clients or just planning to enter the American market.
1. Transparent vs. Opaque Structures: What’s the Difference?
- Transparent structure: Taxes are paid by the owner.
Example: An LLC with a single foreign member.
- Opaque structure: The company pays taxes (e.g., a C-Corporation).
In this case, the owner doesn't need to file a U.S. tax return — unless receiving dividends or selling the company.
2. How to Avoid Creating “Nexus”
Nexus means your business is considered to have a tax connection to a U.S. state. It can be triggered by:
- Having an office or employees;
- Hosting servers or technical infrastructure;
- Reaching significant sales thresholds;
- Using U.S.-based agents or representatives.
Consequences include:
- Mandatory registration in the state;
- Filing local tax returns;
- Paying taxes — even without profit.
3. SaaS Taxation: Key Principles
SaaS is treated as a service. That distinction is crucial, as services are taxed differently than goods or IP transfers:
- If your servers and clients are in the U.S., the income is U.S. sourced and taxable.
- If your development and servers are outside the U.S. but clients are American — the situation is more complex and requires case-by-case analysis.
Tip: Avoid U.S.-based servers if you want to reduce nexus risk.
4. Legal Entity Choice: LLC or C-Corp?
Choose LLC if:
- Your business has no physical presence in the U.S.;
- You provide custom IT services;
- You’re not planning to raise investment soon.
Choose C-Corp if:
- You need capitalization through investment funds;
- You have a U.S. team, office, or sales;
- Your structure must fit U.S. investor expectations.
Important: Converting LLC → C-Corp is easy.
C-Corp → LLC is difficult and costly (exit tax applies).
5. Estate Tax: A Hidden Threat
If a non-resident dies while owning U.S. C-Corp shares, their heirs may face up to 40% estate tax. To avoid this:
- Own the C-Corp via a foreign holding company;
- Do not register shares under your personal name.
6. Sales Tax and Other Local Taxes
In addition to income tax, you may face:
- Sales tax — in 20+ states;
- Gross receipts tax — on total revenue (e.g., Washington, Texas);
- Franchise tax — even without profit in some states.
In highly digital states (like California, New York, Massachusetts), you may need to pay multiple taxes at once.
Conclusions
The U.S. tax system is complex, but predictable. Foreign IT companies should:
- Avoid creating nexus when possible;
- Structure business with IP and taxes in mind;
- Choose LLC or C-Corp based on growth strategy;
- Consider both federal and state-level obligations;
- Don’t ignore the estate tax.
Planning to enter the U.S. market or restructure your operations?
Before signing investment deals or launching a SaaS product — consult experienced tax professionals.
How to Pay Taxes in the USA Correctly? AVITAR & iFindTaxPro
How to Pay Taxes in the USA Correctly? AVITAR & iFindTaxPro (Part II)
How to Pay Taxes in the USA Correctly? AVITAR & iFindTaxPro (Part III)
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