The big Canada LLP / US LLC comparison
Here you can find our Canada LLP / US LLC comparison in video and table format. We’ve covered what we think are the most important criteria. If you are looking at the table on a smartphone, we would recommend that you look at it on a desktop (laptop/PC/Mac), as the display is clearer on desktop devices:
Note: Please turn your smartphone to landscape format to see the table in full!
| Criterion | US LLC | BC LLP |
|---|---|---|
| For which target group? | Online entrepreneurs, digital nomads, emigrants, perpetual travelers and many more. | Online entrepreneurs, digital nomads, emigrants, perpetual travelers and many more. |
| Suitable for how many people? | For 1 person (1 member counts as a "Disregarded Entity")! It is also possible to have 2 or more persons with pass-through taxation. However, a few more documents must be completed and submitted so that the LLC can be classified as a partnership for tax purposes by the IRS! | At least 2 persons! You can also set up a BC LLP on your own, but at least 1 additional partner should be added to the partnership agreement after 6 months at the latest. |
| Tax exemption possible? | Yes, but it depends on the country of residence and you should not work or live "on land" in the USA. Having clients in the USA is permitted. | Yes, but it depends on the country of residence and you should not have customers in Canada or live in Canada. |
| Business bank account in Germany possible? | Yes, even via remote opening at Mercury or Relay with EIN number + fintech banks like Wise (even without EIN number if single-member LLC). | Only fintech banks such as Wise or Payoneer. It is possible to open a business account in Canada, but usually only locally. |
| Business bank account abroad possible? | Yes, but please pay attention to FATCA laws. FBAR must be filed by April of the following year if the amount in the foreign business bank account rises to or above USD 10,000! | Yes, without problems, but only possible with Wise! |
| Anonymity? | No personal data in the public company register with the NM LLC (on request!) and WY LLC. With the FL LLC, personal data such as name, address and EIN number are also in the company register! | No personal data in the public company register! |
| CRS - exchange of bank data? | No CRS agreement with the USA - No bank data such as account holders or account balances are automatically exchanged with participating CRS countries such as Germany. | CRS - agreement on bank data exchange with countries such as Germany exists. Canada provides bank data on request. As far as we know, however, the fintech bank Wise does not provide any reports, but this may change quickly if pressure is put on the bank! |
| Can company data be viewed in the register? | Yes, you can view the company details of all LLCs in the public register. However, to access the register of the NM LLC, you need a VPN to connect to a US server. | Yes, there is a public register on which the registration of the LLP can be found. |
| Remote incorporation possible? | Yes, we form LLCs for our clients in various states such as New Mexico, Wyoming and Florida. | Yes, we establish LLPs for our clients in British Columbia (BC LLP). |
| Limitation of liability? | Yes, only the LLC is liable, not the members! | Yes, all partners are mutually liable! |
| Annual Report necessary? | Yes, in Wyoming (every 12 months) and Florida (always in January) - No, in New Mexico. No financial information needs to be submitted! | Yes, 12 months after foundation and then on a recurring basis. No financial data needs to be submitted! |
| Accounting necessary? | In principle yes, but no obligation to submit them if you live outside the USA. | No |
| Compliance / tax report necessary? | Yes, some forms need to be submitted to the IRS between January and mid-April. But we are happy to take care of this for you (included in the price). | No, only the Annual Report. |
| Foreign Bank Account Reporting (FBAR) necessary? | Yes, for business foreign bank accounts which together hold more than USD 10,000 (even if only for a short time). Private bank accounts are not affected! | No |
| Suitable for Amazon FBA in the USA? | Possible in principle via detours. But NEXUS makes it difficult. | Yes, legally possible, but platform operators could make registration more difficult. |
| Registered agent required in state / province? | Yes, as the first point of contact for authorities and above all because of the company address and incoming mail. | Yes, mainly because of the payment method. The incorporation fees and the Annual Report to be submitted can only be paid in cash or by check in CAD. |
| Costs - Comparison | Opening and annual lump sum more expensive than with Canada - BC LLP, as a company address with mail scanning is included, state fees, submission of the annual report and compliance formalities with the IRS must be paid. | Formation costs and annual costs are lower than for the US LLC. Here you only have to submit an annual report every 12 months. However, you have to take care of the company's postal address yourself. An inexpensive PO box with a physical address is available from Anytime Mailbox, for example. |
| Conclusion: | The US LLC is perfect for sole proprietors who cannot find another partner or do not wish to have one. This structure can be operated tax-free when traveling the world or living in a territorially taxed country, for example. Business bank accounts are much easier to open using the EIN number, even in the USA, than with the Canada LLP. Full limitation of liability ensures security. The lack of a CRS banking agreement with Germany means that US account balances (including the holders!) are treated completely anonymously. The FATCA laws in the USA, which require you to file an FBAR if you have bank balances of more than USD 10,000 in a foreign business bank account, are a negative factor. This can be avoided by withdrawing funds to a private bank account or transferring them to a US LLC account before reaching the critical threshold. The annual costs of an LLC are considerably higher than those of a BC LLP. However, this structure is very secure and sustainable. | The Canada LLP is suitable for several partners who want to protect each other. The LLP can also be managed tax-free if you travel around the world or live in a territorially taxed country, for example. Bank accounts can usually only be opened with fintech banks such as Wise or Payoneer. For an account in Canada, you should also have customers there, which in turn would trigger a tax case. All partners are completely anonymous, as the company is opened by the agent and none of the partners are listed by name in the public register. However, if you want to hide your account balances from (CRS-participating) countries such as Germany, you should bear in mind that Canada participates in the CRS agreement. This structure is perfect for digital nomads, permanent travelers who work from anywhere and have no clients in Canada. The costs of setting up the company and the annual renewal are particularly positive. |
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