Investor · Calgary, Alberta · Member since 2016 · 168 posts · 123 votes
Hi, I am a Canadian looking to start investing in buy and holds (small multis, 2-4 units) in Ohio in the next 6-12 months. I've heard about the main benefit of an LLC being that you're farther away from personal liability should someone sue - are there any other benefits? Can a Canadian corporation act in the same way as an LLC, and can they hold real estate in the US?
Basically I'm wanting to learn more about the best way to do this, and pay the least amount of tax (in either country), understanding the cross-border complications add more hassle. Any advice or tips are appreciated!
Also, if anyone has tips on financing/mortgages for Canadians they'd like to share, I'm all ears!
Thorold, Ontario · Member since 2017 · 22 posts · 4 votes
9y
@Brianne H.. refer back to your "Financing options for a Canadian (and a Brit) in the US" post and you will see the banking info i posted there for banking in the states
You need to find an accountant and attorney experienced with cross border business before you venture too far.
Yes, a Canadian corporation could hold U.S.A. based assets directly, much like you can hold them directly in your name ... as a corporation is "person" in this regard, However, doing this would see the revenue attributed back to the corporation in Canada (after U.S.A. withholding) where you would pay the full Canadian corporate tax rate on all income. Not the approach I would take.
It is also possible for a Canadian corporation to have a 100% owned child company in the U.S.A. In this instance, the U.S.A. child would pay U.S.A. taxes on all income, but the retained earnings would remain in the child company until you explicitly repatriated them to the parent (and there is preferential treatment under the tax treaty for dividends from a child to parent).
Keep in mind, the more companies and the more complex your business the more administrative overhead (sets of books, tax filings, corporate filings, etc) you will incur. If your plan is to buy a couple of properties in the U.S.A. ... it might be overkill. If your objective it to acquire 50 properties this might be the right organisation.
Find yourself a good accountant and attorney who can help you turn your goals into a viable roadmap which will mitigate your tax obligations along the way.
Investor · Calgary, Alberta · Member since 2016 · 168 posts · 123 votes
9y
Thank you for the responses. I am very unfamiliar with how to best structure this and how to pay the least amount in taxes. An experienced accountant is an obvious must, but I'd like to learn more myself so I have a better understanding and not just relying on other's opinions.