Digital nomad living in Canada with an American LLC

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Joined: Mon May 21, 2018 3:03 pm

Digital nomad living in Canada with an American LLC

Post by timurridjanovic » Mon May 21, 2018 3:04 pm

My situation is quite complicated, so please bear with me.

I'm a dual citizen with American and Canadian citizenships. I used to live in the US and while I was there I created a company (an LLC) as I was working as a contracting software engineer.

About 2 months ago, I decided to move back to Canada, but still kept the same contract with the same client as I work from home. I knew that living in Canada and having an LLC in the US might give me a few tax headaches so I consulted with a tax professional.

Turns out that, according to him, the best thing I can do (if I want to keep my american LLC, which I do) is create a new canadian company that will own a C Corp. I will need to choose a C-Corp election for my LLC so that Canada can not tax me on the C Corp money, and then pay the canadian company a management fee, from which I will pay myself dividends in order to live in Canada.

Seems rather complicated but might be worth it to keep getting american contracts and getting paid in US dollars.

My question is related to my investments. I guess that to keep the money in the C-Corp (so that Canada can not tax me on it), I will need to get a corporate account with Vanguard, or something to that effect... I would definitely like to continue investing my money in ETFs, but I read somewhere that it's a bad idea to invest in the stock market with a C Corp, as long term capital gains are taxed more heavily. Anybody knows what I should do in this situation? I still want to be able to invest for my retirement. I plan on retiring early...

I already consulted with a tax professional, but he didn't seem to know much about the whole investment situation. I would appreciate some feedback if anybody has some knowledge about this.

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