Bonjour! If you are a business owner based in Luxembourg but operating in the USA, you may already be familiar with the strict compliance and legal requirements that come with running a business in multiple countries. From reporting obligations to beneficial ownership disclosures, navigating the regulatory landscape can be complex and overwhelming. In this blog, we will explore the specific requirements that you need to be aware of as a Luxembourg-based business owner operating in the USA, and provide guidance on how to ensure that you are meeting all necessary obligations to stay in good standing with both jurisdictions. Rest assured, we are here to help you navigate through the intricacies of compliance and reporting to ensure the success of your business operations in both Luxembourg and the USA.

Registration Requirements

The United States consists of 50 states and 5 territories, each with its own set of business regulations. To operate legally, businesses must adhere to both state-specific rules and federal laws.

State-Level Registration:

When establishing a business presence in the United States, businesses from Luxembourg must complete state-level registration in any state where significant business activities occur. This requirement typically applies if your company:

• Has a physical presence in the state
• Frequently meets with clients in the state
• Derives a significant portion of revenue from the state
• Has employees working in the state

Incorporating your Luxembourger Company in the US

Even if none of the specific criteria apply, a Luxembourger company must still choose a home state for registration when conducting business in the US. This involves forming a U.S. entity, such as a corporation, LLC, or other business structure, in that state. This registration ensures that the company is officially recognized and compliant with US regulations, regardless of its level of business activity in any individual state.

The newly formed U.S. entity will operate as a subsidiary of the foreign company. This means that while the U.S. entity is legally independent, it remains under the ownership and control of the parent company based in Luxembourg. This structure allows the company to conduct business in the US while maintaining its international headquarters.

We recommend using Northwest Registered Agent if your foreign company needs to incorporate. They offer expert guidance and can serve as a reliable registered agent for your business, ensuring compliance and smooth operations.

Federal Requirements

In addition to state requirements, Luxembourger companies must also comply with federal regulations:

• Federal Tax ID: Obtain an Employer Identification Number (EIN) from the IRS. This number is essential for tax reporting and opening U.S. bank accounts.
• Industry Regulations: Companies may need to follow specific federal regulations depending on the industry. For example:
• Import/Export Laws: If the company is involved in importing or exporting goods, it must meet U.S. customs regulations. This includes adhering to rules for tariffs, duties, and necessary documentation.

Beneficial Ownership Information Reporting Requirements

For Luxembourger businesses conducting operations in the U.S., adhering to Beneficial Ownership Information Reporting (BOIR) requirements is crucial. The Corporate Transparency Act mandates that companies disclose the individuals who own or control them. This applies to most entities, including those that are incorporated or registered in any U.S. state. The goal is to enhance transparency and combat illicit activities such as money laundering and terrorism financing.

A beneficial owner is an individual who controls the company or owns 25% or more of its shares, either directly or indirectly. For compliance with BOIR requirements, businesses must report information about these individuals, including their names, addresses, and identification details. Failure to file this report can result in significant penalties and legal consequences. Therefore, companies from Luxembourg need to ensure they meet these reporting obligations promptly and accurately.

For your convenience, you can file your Beneficial Ownership Information Report directly on our website. Click here to complete the process in just a few minutes and ensure your business complies with U.S. regulations.

Additional Considerations for Luxembourger Businesses:

Tax Treaties

The tax treaty between Luxembourg and the United States offers significant advantages for businesses operating across both countries. This agreement helps prevent double taxation and provides clarity on tax obligations, making it easier for Luxembourg-based companies to navigate the U.S. tax landscape. By reducing withholding taxes on certain types of income and establishing clear guidelines for determining tax residency, the treaty promotes smoother cross-border transactions and investments. For more detailed information about the specific provisions and benefits of this tax treaty, click here to access the official documents and resources provided by the IRS.

Trade Considerations

As a business operating in Luxembourg, it’s crucial to be aware of the trade relationship between Luxembourg and the United States. While there are no specific bilateral trade agreements between the two countries, both are members of the World Trade Organization (WTO) and adhere to its rules and regulations. Luxembourg, as part of the European Union, benefits from the EU-US trade relations and agreements. However, it’s essential to stay informed about any industry-specific regulations that may apply to your particular business sector. Depending on the nature of your products or services, there may be specific import/export requirements, tariffs, or standards that need to be met when trading with the US. It’s advisable to consult with trade experts or relevant government agencies in both Luxembourg and the US to ensure compliance with all applicable regulations and to take advantage of any available trade benefits or incentives.

Your Path to Compliance: Key Takeaways for Luxembourger Businesses in the U.S.

Operating a Luxembourger business within the USA requires careful attention to legal obligations, from establishing your home state to incorporating and filing a beneficial ownership report. Meeting these requirements is essential for ensuring compliance and securing your business’s success in the American market. By understanding and adhering to these steps, you can confidently navigate the complexities of doing business in the U.S. and focus on growing your enterprise.

Ready to get started? Click here to file your BOIR in just a few short minutes. We make the process easy, fast, and secure so you can focus on what matters—your business.