Investing as a foriegn corp in the US?

jsizemore

Bronze
Aug 6, 2003
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Ok guys this may have been covered before but I really could not find out my question with a search.
I retire from the Navy in 408 days. My pension will be $1500 a month and since I am not married and have no financial dealings to the US other than my house in Virginia that is valued at 40% over what I owe on it.
I know I can do just fine in the DR I just would feel better about building up anest egg for the future. After all 38 is still too young to retire completely.
I have the chance to work for around 80k a year tax free when I get out of the Navy and I was thinking of doing that for a year or two and build up a nest egg.
My question is if I get my DR residency and establish a DR corporation as the normal procedures go can I invest money in the States as an Dominican Corporation and avoid paying income tax on those earnings. I know there is a tax liabilty of removing the money from the States in the first place but I am wondering if I can invest the money once it is out of the US system.
Thanks John
 

GringoCArlos

Retired Ussername
Jan 9, 2002
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It's called a Foreign Controlled Corporation, and in answer to your question, just imagine a company with a GIANT target painted on the side, and the IRS looking through a 20x scope while wearing rubber gloves to see if you report it.

You have to report the earnings whether you take them out of the company or not, if you own more than 50% of the shares. Also, you are required to report your foreign financial accounts (which includes shares of foreign companies) to the Treasury if it is valued at $10k or more, or you are guilty of a federal offense, for which they may withdraw your passport if they decide to go after you and can prove it..

You have to be dealing with a truckload of dough before it is worth doing. Just report it and forget it, and enjoy your sleep every night.

Better yet, set up a company, make yourself the "advisor" , pay yourself $80k a year, and take that deduction - the $80k will be tax-free. It's the best deduction available to US taxpayers, and it's legal.

Edited to Add> PS -there is no tax liability to removing your money from the US - it's YOUR money. You just need to file a form with the Treasury Dept every year about having foreign financial accounts valued in aggregate of over $10k if that is the case. Under $10k, you don't have to do anything.
 
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jsizemore

Bronze
Aug 6, 2003
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Thanks for the info

What is going on is after I retire I am planning on going to Iraq as a contractor. I figured my pension will handle all my bills I have while I am gone and then just put every dime into a sateside account. Since if I ever got married to a local in the DR I could not claim her as a dependant unless I got her established as a US resident and since I don't plan on spending enough time in the US to do that it was nearly impossible. So I was going to give myself the tax break.
Oh well good thing I asked.
John
 

jsizemore

Bronze
Aug 6, 2003
691
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I am cook

If I go to Iraq I will be in a compound so I will not be like the truck drivers. But I already been there last year and I may be going back again before I retire. SOrt of a been there done that. At least if I go as a contractor I will be getting paid more for it.
John