First part. If your company has a single place of business and you're selling all over the USA, then the only State that will tax your profit is the state where you have your office. That's a good first principle.
There are tons of exceptions. California thinks that if you come to a trade show for "too many days" in a year that is enough to cause presence for taxation for a non-California business. Every state tries to find some weasel-ass way to hook you and claim the right to tax your business. So be careful.
When you're thinking about doing business multinationally, the first thing to remember is that the U.S. tax law in the international tax world is written with two basic assumptions in mind:
1. All companies are of the size of Mitsubishi or larger, and operated by humans.
2. All humans are Colombian drug lords or worse.
You think I kid. No. The towering lunacy that is Washington DC has no bounds.
So when thinking about doing business across a border your PRIMARY concern should be paperwork costs, accounting costs, and brain damage. Your accounting costs and risks for accidentally f-ing something up will go up by an order of magnitude.
That aside, let me answer your question.
The variables in this equation are (a) the citizenship of the owners of the company; (b) the place of incorporation of the company; (c) the place of operation (might be multiple) of the company; (d) the source of the revenue (where are the customers?); and (e) the type of revenue (royalty, sale of a thing, etc.).
Starting from the simplest proposition. If the shareholders are U.S. people, a non-U.S. corporation will not affect US taxation at all unless it is a real live operating company incorporated in the place it is operating. If you're incorporated in Bermuda, for instance, you better have offices and bodies there doing the work. Otherwise the company is treated as a giant hose depositing net profit into the pockets of the shareholders.
For the Google fanatics: "controlled foreign corporation" and "Subpart F" income.
Now specifically on to your situation. When does it make sense to think of offshore corporations? You're a U.S. person starting a company and developing IP. You'll be exploiting that IP for fun and profit all over the world, eventually. If the amount of profit you're deriving from non-U.S. sources is big enough, you can create a system to defer (but not eliminate forever) the U.S. tax until you bring the profit home to your pockets.
I wouldn't bother until you have a couple million a year of profit from non-U.S. sources. The overhead is too big.
For a non-US owner with a non-US corporation, it is fairly easy to eliminate the US income tax bite on sales:
1. Don't have an office here (Google fans look up "permanent establishment" as a general clue).
2. The sale "occurs" outside the USA. (When ownership changes hands, that's when you look for where the profit was earned. E.g., you're buying toys from a factory in China. If you own them on the wharf in China, the guy selling them earned his profit in China. If you own them as soon as the container hits the deck at Long Beach, CA, then the guy selling them to you earned his profit in USA and he's cryin' and singin' the blues.)
The cost of professional services is the issue. The government lards on more and more stuff you have to do, and the penalties for mis-steps in international tax are huge. That is where the costs come in.
There are tons of exceptions. California thinks that if you come to a trade show for "too many days" in a year that is enough to cause presence for taxation for a non-California business. Every state tries to find some weasel-ass way to hook you and claim the right to tax your business. So be careful.
When you're thinking about doing business multinationally, the first thing to remember is that the U.S. tax law in the international tax world is written with two basic assumptions in mind:
1. All companies are of the size of Mitsubishi or larger, and operated by humans.
2. All humans are Colombian drug lords or worse.
You think I kid. No. The towering lunacy that is Washington DC has no bounds.
So when thinking about doing business across a border your PRIMARY concern should be paperwork costs, accounting costs, and brain damage. Your accounting costs and risks for accidentally f-ing something up will go up by an order of magnitude.
That aside, let me answer your question.
The variables in this equation are (a) the citizenship of the owners of the company; (b) the place of incorporation of the company; (c) the place of operation (might be multiple) of the company; (d) the source of the revenue (where are the customers?); and (e) the type of revenue (royalty, sale of a thing, etc.).
Starting from the simplest proposition. If the shareholders are U.S. people, a non-U.S. corporation will not affect US taxation at all unless it is a real live operating company incorporated in the place it is operating. If you're incorporated in Bermuda, for instance, you better have offices and bodies there doing the work. Otherwise the company is treated as a giant hose depositing net profit into the pockets of the shareholders.
For the Google fanatics: "controlled foreign corporation" and "Subpart F" income.
Now specifically on to your situation. When does it make sense to think of offshore corporations? You're a U.S. person starting a company and developing IP. You'll be exploiting that IP for fun and profit all over the world, eventually. If the amount of profit you're deriving from non-U.S. sources is big enough, you can create a system to defer (but not eliminate forever) the U.S. tax until you bring the profit home to your pockets.
I wouldn't bother until you have a couple million a year of profit from non-U.S. sources. The overhead is too big.
For a non-US owner with a non-US corporation, it is fairly easy to eliminate the US income tax bite on sales:
1. Don't have an office here (Google fans look up "permanent establishment" as a general clue).
2. The sale "occurs" outside the USA. (When ownership changes hands, that's when you look for where the profit was earned. E.g., you're buying toys from a factory in China. If you own them on the wharf in China, the guy selling them earned his profit in China. If you own them as soon as the container hits the deck at Long Beach, CA, then the guy selling them to you earned his profit in USA and he's cryin' and singin' the blues.)