Questions

We are a Nigerian company opening up a Delaware C corp for the purpose of raising funds from US investors. Is there any tax levi on funds raised?

2answers

Yes, you should read Do More Faster by Brad Feld and David Cohen from Techstars. It gives you great advice on what to consider when starting your tech company.


Answered 9 years ago

Raising capital through a Delaware C corporation does not create any immediate U.S. federal or state tax consequences. You should however be mindful of the compliance obligations related to operating a U.S. C corporation. A Delaware C corporation is required to file Form 1120 on an annual basis, even if there are no revenues or expenses. In addition, if the C corporation is owned by a non-U.S. company, such as a Nigerian corporation, a Form 5472 should be included with the Form 1120 to report the non-U.S. ownership of the Delaware corporation. Cash outflows of funds from the U.S. to a non-U.S. company may be subject to certain disclosures. For example, if a U.S. corporation transfers cash to a foreign corporation, the U.S. corporation may be required to disclose the cash transfer on Form 926 if certain thresholds are met. The U.S. tax rules surrounding this area are complex. I would recommend seeking the advice of a competent CPA or tax attorney to assist the planning and compliance.


Answered 5 years ago

Unlock Startups Unlimited

Access 20,000+ Startup Experts, 650+ masterclass videos, 1,000+ in-depth guides, and all the software tools you need to launch and grow quickly.

Already a member? Sign in

Copyright © 2024 Startups.com LLC. All rights reserved.