Canadian corporation managed by a non-resident

[ususer]

Please give me an answer who knows:

1. Can a non-resident of Canada living in US continue to operate a Canadian corporation?
2. Is it fine if this corporation has income (from US sources) and declares expenses, but does not pay management fee (management fee to the only owner, who is non-resident, is zero)?

Thank you!

[nelsona]

These are immigration questions, not taxation.

However the principal that you are WORKING without authorization would apply whether or not you are being paid.

USCIS, contrary to what you may have heard, is not that stupid.

You need US authorization to do ANY work, unless such work has absolutely nothing to do with US, or with you being in US (for example, writing a novel while on vacation would be fine, writing for the local newspaer would not), and nor would writing about US events for a Cdn newspaper). Your second question would seem to preclude this possibility.

I suggest you find a US immifg forum, or better yet, a US immig lawyer.

[ususer]

Nelson, sorry, I was not clear in my question. All the US rules (work permission, etc.) are certainly fullfilled. The question is tax-related, not immigration-related, and it is purely about the Canadian taxation of the Canadian corporation, not about US. Sorry for confusion.

[MikeC]

Please give me an answer who knows:

1. Can a non-resident of Canada living in US continue to operate a Canadian corporation?

If as you say you are fine with the US immigration rules then - there are no issues with Revenue Canada. Are you afraid that they will review your non-residential status?

2. Is it fine if this corporation has income (from US sources) and declares expenses, but does not pay management fee (management fee to the only owner, who is non-resident, is zero)?

I heard that although it is legal, you have to pay yourself at least something.

[Carson]

Please give me an answer who knows:

1. Can a non-resident of Canada living in US continue to operate a Canadian corporation?
2. Is it fine if this corporation has income (from US sources) and declares expenses, but does not pay management fee (management fee to the only owner, who is non-resident, is zero)?

Thank you!

1. Yes, no problem.
2. Again, yes.

The corporation is not required to pay you anything. Of course, if you have taken cash out of the corporation, then you must treat it as salary or as a dividend and withhold accordingly in either case.

This scenario becomes problematic if the income you are referring to is not passive income, i.e. it is generated from the work of the corporation's employee or owner-manager. If the work is being conducted in the US through a permanent establishment there, eg. your home, then the Canadian corporation now has a branch office in the US and is required to file US Federal and State corporate tax returns (in addition to the regular Canadian filings).

In summary, it becomes very messy. It's much better to conduct US business through a US entity or as self-employed.

[nelsona]

... and remember that you are in US on work visa, which means you can ONLY work at the tasks specified in your petition, not any others, and only for the sponsor(s), not yourself.

In other words, the only non-passive income you can earn while in US (from any source) is from your US-based, sponsored, job.