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Old 05-14-2011, 03:41 AM
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How to set-up payment to foreign owners?

When an American C-Corp (a simple Delaware Inc) is 100% owned by nonresident aliens, how are the shareholders compensated?

I know that it's possible to style corporate payments as tax deductive consulting fees, not dividends. (Tax savvy for small business By Frederick W. Daily)

Does that mean that corporate profits can be transferred to the nonresident aliens bank accounts (which are most likely foreign bank accounts, as they are nonresident) as "consulting fees"?

And is there a maximum amount of consulting fees similar as to how the tax law limits the wages you can receive from your C-corp "salaries and bonuses paid to shareholder-employees must be reasonable"?

Many thanks in advance!

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