As a U.S. citizen residing abroad you have to be particularly careful with respect to your investments and assets.  One particular “thorny” issue is that of foreign life insurance.  Specifically, life insurance issued by a non-U.S. insurance company.

The problem with foreign life insurance policies is there is an excise tax to pay every time you pay a premium on a foreign life insurance policy, annuity or accident/sickness insurance.  In addition, investments in life insurance policies are subject to reporting on Form 8938 and FinCen Form 114 (FBAR) and they are likely PFICs…which means even more reporting.  And then there’s estate tax issues.

The U.S. taxes U.S. persons (U.S. citizens and greencard holders) on their worldwide income regardless of where they live.  A U.S. person owning a business abroad will likely have U.S. tax and/or reporting obligations related to the business.

Freelancer, Limited Company, Partnership.  What is the best way to structure your business abroad and what are the U.S. tax implications of the structure?

The U.S. taxes U.S. persons (U.S. citizens and greencard holders) on their worldwide income regardless of where they live.  A U.S. person owning a foreign (formed outside the United States) corporation will likely have U.S. tax and/or reporting obligations related to the business.

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