Home Office vs Rented Office Space? (Lancaster, York: renting, wages, taxes)

[AtomicUK]

I am hoping somebody might be able to help answer or advice us.

We live in the UK and have a business here, but we are looking at expending and opening an LLC in Delaware.

We still keep our English business, but with this expansion into the US it require us to be there for many months at a time and we are looking at potentially locating in Lancaster or York Counties.

Our business will be conducted all over America with meetings always taking places at our clients location, but I would naturally still need either a small home office or an office space when I am home.

This is simply to deal with email, paperwork, phone and Skype calls etc. so I would like to avoid renting office and residential properties.

Naturally there are many differences between the UK and USA, so we don't want to fall foul of any laws, so my initial questions are:

A) Would we be permitted to have a small home office?
B) Does it need to be declared as the LLC will be registered in DE?
C) Are there any tax benefits to declaring and having a home office?
D) Is there anything not mentioned restriction wise that I should be aware of?

Thank you in advance.

[LeaderOCola]

Originally Posted by AtomicUK

I am hoping somebody might be able to help answer or advice us.


A) Would we be permitted to have a small home office?
B) Does it need to be declared as the LLC will be registered in DE?
C) Are there any tax benefits to declaring and having a home office?
D) Is there anything not mentioned restriction wise that I should be aware of?

Thank you in advance.

a) yes ( in principle)
b) for federal reasons, yes; no idea specifically about DE laws
c) yes
d) yes, consult IRS guidelines (federal), state guidelines (Delaware), and then. yes, possibly county and municipality.


However, with respect to 'C', odds are the savings will be offset due to the (assumed) significant CPA costs you will incur in managing your lovely USA taxes.

Good luck.

[AtomicUK]

Thank you for the quick reply LeaderOCola
Sadly no way around the CPA costs being classed an 'alien' and also conducting national business.

Does anyone have any insight into the tax breaks / liabilities in this scenario?

Thanks again.

[Wells5]

Firstly, in order to legally engage full time in a business in the USA, you will need an E2 immigrant visa, which requires an upfront investment of US$200,000 and a lot of paperwork and legal fees. If you are a UK subject and come to the USA on the visa waiver program, you may not work either for yourself or for someone else for US wages. You are allowed to temporarily conduct business here as an agent of a foreign company.

For specific tax questions, I suggest contacting a US accounting firm.

[AtomicUK]

Many thanks for the reply Wells5

Naturally very valid and critical points and this is still something I have yet to find a definitive answer to in relation to my business.

For the E2, I always hear the $200,000 amount brought up, that kind of investment is not an option for me.

However, what about an E1 as an option?
The plan is to bring US trade to Europe and European trade to the US.

We will not require to be in the USA year round, just to be able to come and go as work projects require.

Are there any other options visa wise?
Would a third possible option be for an American national to open the company or at least be a joint share holder and that application for a relevant sponsored visa is made based on that?

This route is an option open to me, as I have several American nationals wishing to invest in the expansion.

How about O1 or a P2 Visa?

As for the business:
I am told by a US accountant that I can set up an LLC in DE for $475 with then a yearly franchise fee of $300.

To open a US bank account in relation to it, I am told an opening balance of $1500 is required.
Would you find the above to be correct advice?

Thank you again.

[flyonpa]

a: Mostly Yes, Some Town/Counties have zoning rules about Home Offices, Many require registration, or a waver from the zoning rules, (More or less as long as you don't have customers, have employees (Generally you are allowed 1), or get deliveries (Tractor trailer try, UPS/FedEx are ok) It get approved.

b. There are agents you can hire in Delaware that will handle you LLC, and LLC related mail, licences, registration etc. If you need to register with your town/county you would need to tell them also.

c. Yes, but generally not worth it, If you are renting the Tax Benefits are even lower.

d. For your Physical Mail (Even your UPS/Fedex) you should conciser a Private Mail box, so your home address is not on everything and if you move you don't have to update everything. Store like the UPS store provide a private "PO box" Mail Box, UPS/FedEx receiving services, forwarding services. For Phone I would suggest some sort of virtual phone number, so when you are on the road, or overseas you US Phone number will ring where you are. Maybe consider a Toll-Free (like a 0808 number in UK), US has "800" numbers (also bunch of other area code when we ran out of 800's, 888 887 ....)