Pakistanis are going to enjoy the perks when starting an LLC in US and the benefits that they will reap are well worth the effort. I would love to help you decide and overcome this dilemma that most people have. The benefits of a US LLC are plenty and you will understand as you read the article how they will be beneficial in the long run.

It is imperative to understand taxation laws before embarking on a business venture and it would do you well if you know about your upcoming venture. I will briefly introduce the concept of an LLC to quell any lingering doubts in your mind.

What is a Limited Liability Company – LLC

A Limited Liability Company is normally a business venture with limited liability or personal accountability. Your personal assets remain safe even if the business goes bankrupt and incurs any debt. An LLC is a separate entity and is responsible for its business affairs isolating the assets of its owners.

How Does Uncle Sam impose taxation on LLCs

LLC is a pass-through entity in the eyes of federal tax collectors, implying that it doesn’t pay taxes on business income. Depending on the number of owners of that LLC, each individual will pay income tax on their share of the LLC’s profits.

If your LLC has only you as a member, you will only return the LLC profit & loss on your income rather than filing a separate business form. This will require you to fill out Form 1040 – Schedule C as a Profit & Loss business.

I would suggest that you take into account the number of employees as you will be responsible for their payroll taxes but not entirely. You will collect and pay payroll taxes such as unemployment, social security, and medicare taxes. You will pay unemployment taxes to fund unemployment benefit programs. Both you and your employee will equally share in the later two that fall under FICA’s taxes. 

If I indulge too deeply in this issue, I would deviate from my main topic of benefits for Pakistanis interested in the US LLCs.

Will You Enjoy any Benefits of an LLC?

The direct answer to your question is affirmative and worth all the efforts put into the venture. Here is a detailed list of the perks of starting a new LLC from Pakistan in the USA!

You will be able to work seamlessly with US-based Companies

Did you know that Americans are more likely to hire you on Fiverr and Upwork than be directly involved through a social media app? That’s because of the protection and support provided to the employers and they have a right to refuse your work should they smell a rat. 

If you are to work with a US-based firm, you will do well given that the businesses are supported and protected by the US government.

Many services prevent you from tapping their revenue-generating services reserved only for “well-developed” countries such as TikTok. You cannot directly run ads from Pakistan and it can be a hassle if a middleman takes their financial cut for assisting in your venture. 

You guessed it! LLC becomes that middleman handing you your revenue without taking their cut. Many of the banned services are accessible with a little bit of workaround but leave loopholes for hackers.

Creating a Bank Account becomes available with LLC Registration

Being a Pakistani, you are restricted to limited amenities in the US given the political stance of the US and the ever-so-volatile nature of our relationship with the superpower. You are banned from using financial transaction services such as PayPal but there are “workarounds” to bypass that. However, that comes with vulnerabilities as well as potential loopholes exploited by experienced hackers to empty your digital wallet. 

This changes when you register as an LLC and that gives you “Official” leeway for smooth financial transactions on services provided by companies like Stripe.

Certain banned services become available with an LLC

Pakistan lacks many international services given the geopolitical restrictions and limited jurisdiction. Companies are slowly and gradually approaching Pakistan but it will take more than that to convince the major players.

These include affiliate marketing services, such as Rakuten, which are unavailable in Pakistan but with an LLC, you will be eligible for their affiliate program. Note: The US is an affiliate partner country of Rakuten.

Your taxation will be based on your income

IRS considers your business as a Profit & Loss entity liable to pay on profit and profit alone. Thanks to the pass-through law enforced by the IRS, you won’t need to pay federal income tax. You are still liable to pay an income tax on the profits that you make when filing your personal income tax returns.

That isn’t a bad deal for folks who are just starting to venture into the business world and trying to make for themselves. Only the top brass have to pay hefty sums of income tax for the massive profits that they reap from their return on investment ventures.

You are exposed to the largest economy in the world

Now there is no denying that America isn’t the sole biggest economy in the world but it sure has an iron grip on the financial world. Russia, China, and India have their fair share in the same market and might overtake the US altogether eventually. Still, you will enjoy plenty of benefits of LLC as compared to our poor Pakistan lagging behind most of the world despite being an “Atomic Power”.

The US has strict taxation laws preventing anyone from committing tax fraud essentially eliminating the idea of a tax haven. This gives you leverage and credibility to organize deals with clients who are otherwise shy to deal with “Pakistanis”. I can’t emphasize enough that your societal standing will be fortified should you register as an LLC in the US. 

The US market has some of the most respected venture capitalists in the world and you will enjoy a plethora of business opportunities and deals than in your entire Pakistani market.

No extensive paperwork and strict compliance rules

Did you know that you need at least one local Singaporean director to run any company in Singapore? I know it is a handicap when you are not aware of the consequences should you break any rules and regulations.

It becomes even worse if the laws regulating LLCs require your physical presence or annual compliance with limited flexibility.

The US laws have been easy and flexible with minimal requirements making it easy to manage LLCs without being obnoxious. However, as you know not everything is as easy and simple enough as cooking an egg. You will pay for the annual reporting fee, annual registered agent service, and Form 5472. 

If you are thinking about a registered agent, you would need someone trusted enough to receive your legal documents, subpoenas (summons), and important notices to handle your LLC’s affairs on your behalf.

You can also make yourself or a trusted acquaintance as the LLCs registered agent if they are residents of the US with physical address in the same state as that of the LLC. You would need to be present for the summons and be available to receive legal and official documents.

Scounts is here to guide and assist you through this difficult ordeal

We, at Scounts, are readily available to help you register a US LLC from Pakistan and make sure that your experience is as smooth as possible.

If you are unsure what to do or how to approach this, we will provide you with consultation and help to eliminate any lingering doubts.

Check out the pricing of our services to understand the financial structure of our services as well as insights into imposed state taxes regulated by official authorities. Hurry up and reap the benefits of an LLC before the time runs out on you and you lament your procrastination.