advice needed on dual citizen (US/CAN) incorporating in US

[talmon]

I am a dual citizen and am looking to incorporate in Canada for a business that does business by the internet with people all over the world. I feel that there are probably US tax implications that I need to take into account when setting up the business.

I see a few ways of moving forward:

1. My wife (Canadian) is the shareholder.
2. I am the shareholder with dual citizenship maintained
3. I am the shareholder with 1 citizenship renounced.

What (if any) are the negative implications of each of these options and what do you recommend as the best way to move forward.

Thanks for your help

[talmon]

I meant to say incorporating in Canada as the title of this thread... sorry...it wouldn't allow me to edit it.

[JGCA]

you can incorporate in Canada eitehr Federally or provincially, under the Federal regime the majority of the directors must be CND residents , citisenship is of no consequence only residency. Province all have different regilatiuons for instance Quebec allows all the directors to be outside of Canada.

Taxation will be only determined if you are a CCPC meaning controlled by Canadian shareholders ( again residencey not citizenship) but to qualify for the prf tax rate the income has to be earned in Canada not overseas.


You can incorporate in Canada very easily even if you are not resident here, but you need prof advise to see if it pays and you need to file T-2 regardless.

[talmon]

thanks @JGCA for your reply. I have actually had an incorporated company in canada before, but it remained dormant and I let it die. Now I have one that will not be dormant and wanted to know what if any precautions are recommended for a dual citizen owning a canadian corporation in Canada as far as being taxed by the US. This was the reason for putting the 3 options in at the top - to keep myself in the best position personally as far as income from the dividends.