Shutting Down a U.S. Company: How to Avoid Losing Everything to IP Taxes

Did you know that simply deciding to shut down your U.S. company could trigger a six-figure tax bill? Especially if your structure involves intellectual property (IP). In 2025, this issue becomes critical for Ukrainian tech businesses planning to enter or already operating in the U.S. market.

This article challenges the widespread belief that doing business in the U.S. is always easy — and at the same time serves as a practical guide on how to retain control over your taxes, IP, and cash. Based on an expert webinar for SaaS startups, this is the moment to listen not to marketers — but to tax lawyers.

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IP and Taxes in Liquidation: Why It’s a Problem

Most founders imagine a structure like this: register a company in Delaware, contribute the tech/IP, hire a team, raise investment… but life doesn’t always go as planned. Eighteen months later, the product hasn’t taken off — and the company needs to shut down. That’s when the real trouble begins.

Here’s the unexpected trap: When liquidating a U.S. company, you're required to pay tax on the full value of the IP created or contributed in that jurisdiction — even if it isn’t sold but simply returned to, say, a European parent company.

This isn’t just theory. It’s a real risk that costs startups tens of thousands of dollars every year.

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How to Avoid the Tax Trap: Use a Sublicense Instead of Contributing IP

One of the most effective strategies: don’t contribute your IP to the U.S. company at the start. Instead, structure it through a sublicense:

Your main entity (e.g., in Europe or an offshore jurisdiction) retains full ownership of the IP;
The U.S. entity receives a sublicense to use the IP for commercial purposes;
Even if the royalty is a symbolic $1/year, the model is legally valid and acceptable.

Only after the structure stabilizes and contracts are in place — and only if you’re certain it makes sense — should you consider formally transferring the IP.

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Exiting the U.S. Structure Is Expensive and Time-Consuming

Many founders underestimate the cost of closing a U.S. company. To retrieve your IP, you’ll need to:

Conduct a formal IP valuation (ideally with third-party confirmation);
Order a transfer pricing study;
Pay capital gains tax based on fair market value, even without an actual sale;
Justify the valuation to the IRS.

Mistakes in valuation or a lack of transfer pricing documentation can lead to tax penalties of up to 40%.

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Is Delaware Really a Tax Haven?

No — Delaware is convenient for corporate law, but it’s not a tax haven. The real factor is your entity type:

If it’s a C-Corp, expect strict taxation — especially during liquidation;
If it’s an LLC and not a tax resident in your home country, you might benefit — but only in very specific scenarios.

The right structure isn’t about branding or aesthetics — it’s about your startup’s survival long term.

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New IRS Rules: How U.S. Tax Law Classifies Your Online Revenue

In 2024, the IRS finalized new rules for classifying digital revenue — critically important for IT businesses:

IP Transfer
You sell IP to a U.S. company = full transfer of rights = U.S.-taxable income.
License to Use
You grant a U.S. company permission to use your software = taxable in the U.S. where the use occurs.
SaaS
A U.S. client uses your cloud service, but it’s hosted and managed abroad = foreign-sourced income.
Custom Software Development
You write code for a U.S. client = a service, not a rights transfer = foreign-sourced income again.

These distinctions are vital for tax planning. Misclassifying income could lead to overpayments — or audits.

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Advice for Ukrainian Startups

Don’t contribute IP to your U.S. company at the early stage;
Use sublicensing instead;
Plan transfer pricing before raising your first investment;
Work with a CPA and transfer pricing expert;
Be prepared for liquidation — even if you think it’s unlikely.

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A Webinar Worth Watching

This article is just a slice of a larger webinar on tax risks and optimal structuring for startups working with the U.S.

Whether you're already active in the market or just planning — this content could save you thousands of dollars and months of stress.

Don’t let taxes kill your idea. Build strategically — not blindly. And most importantly: plan your exit structure while you're still entering.

This article is based on a May 2025 webinar for SaaS founders.

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