PRACTICE AREA
Cross-Border Business Structuring
U.S. tax planning for entrepreneurs and closely held family businesses expanding across borders — whether taking a U.S. business abroad or bringing a foreign business to the United States.
The right structure from the start. The right restructuring when circumstances change.
The Business Structure and the Owner's Personal Tax Situation Must Be Designed Together
For closely held business owners who operate across borders, the business structure and the owner’s personal tax situation cannot be designed in isolation. A U.S. entrepreneur who moves abroad to manage a foreign expansion creates permanent establishment risk for the U.S. business, a dual-filing obligation in two jurisdictions, and CFC exposure for any foreign entities established along the way. A foreign entrepreneur who establishes U.S. operations without planning may inadvertently create withholding obligations, transfer pricing exposure, and a U.S. taxable presence that was neither intended nor anticipated. In both cases, the wrong structure — or the right structure built without tax advice — can trigger unexpected costs that compound over time.
Cross-border business structuring for closely held companies requires analysis at the intersection of entity classification, transfer pricing, permanent establishment, CFC and NCTI planning, exit and succession, and — critically — the personal tax situation of the owner. Unlike large multinationals with dedicated tax departments, closely held business owners typically need one advisor who can hold the full picture across both the business and the individual.
We advise entrepreneurs, family businesses, and their advisors on cross-border business structuring at every stage — from initial expansion or establishment through ongoing planning, restructuring when the owner’s circumstances change, and eventual exit or succession. Our focus is the owner-operated business where personal and business tax planning are inseparable.
Who We Advise
U.S. Business Owners Expanding Abroad
U.S. entrepreneurs and family businesses establishing foreign operations, subsidiaries, or sales activities — requiring entity structuring, PE risk analysis, CFC planning, and coordination of U.S. and foreign tax obligations from the outset.
Foreign Entrepreneurs Establishing U.S. Operations
Non-U.S. individuals and families establishing a U.S. business presence — requiring entity classification analysis, structuring to minimize U.S. withholding and estate tax exposure, and coordination with inbound tax planning.
U.S. Business Owners Relocating Abroad
U.S. entrepreneurs who have moved or are moving abroad while continuing to own and manage a U.S. business — requiring PE analysis, compensation restructuring, dual-filing strategy, and entity review to address the new cross-border reality.
Family Businesses with Multi-Jurisdictional Operations
Closely held family businesses with operations, owners, or management across multiple countries — requiring holding company structuring, transfer pricing fundamentals, and succession planning that addresses both business and personal tax dimensions.
Business Owners Approaching Exit
Owners of cross-border businesses considering a sale, restructuring, or succession — requiring pre-exit structuring analysis, asset vs. stock sale considerations, treaty-based planning, and coordination of the exit tax analysis for any expatriating owners.
CAPABILITIES
Technical Depth Across Cross-Border Business Tax Planning
Entity Classification & Check-the-Box
Analysis of U.S. tax classification of foreign entities — identifying per se corporations, eligible entities, and the consequences of check-the-box elections — to establish the right U.S. tax treatment of each entity in the structure from the outset.
Permanent Establishment Analysis
Assessment of PE risk for U.S. business owners and managers operating from abroad — including analysis under applicable tax treaties, compensation and management restructuring to reduce exposure, and coordination with local counsel in the foreign jurisdiction.
CFC & NCTI Planning
Controlled foreign corporation analysis for U.S. shareholders of foreign entities — identifying Subpart F income inclusions, modeling Net CFC Tested Income (NCTI) exposure, and planning FDII deductions for U.S. exporters of intangible income.
Holding Company Structuring
Design and analysis of holding company structures for internationally owned businesses — including jurisdiction selection, treaty network analysis, and integration of the holding structure with the owner’s personal tax and estate planning.
Transfer Pricing Fundamentals
Transfer pricing analysis for closely held businesses with related-party cross-border transactions — identifying arm’s length standards, documentation requirements, and planning to minimize double taxation on intercompany flows.
Tax-Efficient Repatriation
Planning for the tax-efficient return of foreign profits to U.S. owners — including dividend planning, treaty-based withholding reduction, and the interaction of repatriation with the CFC and NCTI regimes.
Cross-Border Exit & Succession
Pre-exit structuring for owners of cross-border businesses — including asset vs. stock sale analysis, treaty-based planning for gain on business interests, and coordination with any personal expatriation planning for owners considering citizenship or residency change.
Dual-Filing Strategy
Advisory on U.S. and foreign filing obligations for internationally mobile business owners — including the foreign tax credit, social security totalization, and coordination with local counsel on the foreign return.
EXPERIENCE
Representative Matters
Select anonymized engagements. Prior results do not guarantee a similar outcome.
BUSINESS RELOCATION
United States / Spain
Counseled a U.S. citizen relocating a U.S.-based business to Spain on permanent establishment risk, entity restructuring, dual-filing obligations, W-2 compensation planning, and social security totalization — aligning the business and personal tax structure with the owner’s new residency from the outset, and coordinating with Spanish tax counsel on local filing obligations.
CFC PLANNING
United States / Europe
Advised a U.S. citizen with interests in multiple foreign corporations on CFC analysis, Subpart F income characterization, and NCTI planning — implementing check-the-box elections and restructuring foreign entity ownership to reduce U.S. tax inclusions and simplify the ongoing compliance footprint.
MULTI-JURISDICTIONAL STRUCTURE
United States / International
Advised a non-resident individual on the U.S. tax analysis, compliance, and ongoing restructuring of a multi-tiered international holding structure with entities across the United States and multiple foreign jurisdictions — including entity classification analysis, CFC and NCTI planning, and coordination with foreign counsel across jurisdictions.
ENTITY STRUCTURING FOR FOREIGN EXPANSIO
United States / Latin America
Advised a U.S. closely held business on the structuring of a foreign subsidiary established to service Latin American markets — including check-the-box classification analysis, intercompany services agreement review for transfer pricing compliance, and CFC analysis of the subsidiary’s income.
Frequently Asked Questions
I run a U.S. business and I moved abroad. Does that create any U.S. or foreign tax issues for the business?
Potentially significant ones. When a U.S. business owner moves abroad and continues to manage the U.S. business from a foreign location, the foreign country may assert the right to tax the U.S. business’s profits — on the theory that the business has a permanent establishment (PE) there because management and control is exercised from within its borders. PE exposure varies by country and by the applicable tax treaty, but it is a real risk that needs to be analyzed before the move, not after. Beyond PE risk, the owner now has dual-filing obligations — U.S. returns as a U.S. citizen or resident, and foreign returns as a local tax resident — and the compensation arrangement between the owner and the business may need to be restructured to reflect the new cross-border reality. The business structure and the personal tax situation must be reviewed together.
What is a controlled foreign corporation and why does it matter for my closely held business?
A controlled foreign corporation (CFC) is a foreign corporation in which U.S. shareholders collectively own more than 50% of the vote or value. For closely held business owners, this often means that any foreign subsidiary or holding company you own is a CFC. The CFC rules require U.S. shareholders to include certain categories of income — Subpart F income and Net CFC Tested Income (NCTI) — in their U.S. gross income currently, even if the CFC never distributes that income. The result is that a profitable foreign business can generate U.S. tax liability for its U.S. owner on income that never leaves the foreign entity. Careful structuring — including entity classification elections, income characterization planning, and the use of the FDII deduction for qualifying U.S. exporters — can substantially reduce this exposure.
What is permanent establishment and how do I know if I have one?
A permanent establishment (PE) is a fixed place of business through which the business of an enterprise is wholly or partly carried on in a foreign country. If your business has a PE in a foreign country, that country can tax the profits attributable to the PE as if it were a local business. PE can arise from a fixed office or place of business, from an employee or agent who habitually concludes contracts on behalf of the business in the foreign country, or — in some jurisdictions — simply from a senior manager or owner who regularly works from that country. The analysis depends on the facts and on the applicable tax treaty between the U.S. and the foreign country. A U.S. business owner who works from a home office abroad, takes client meetings in the foreign country, or has employees or agents there may have created a PE without realizing it.
How should I structure a foreign expansion — branch, subsidiary, or something else?
The choice between a branch and a foreign subsidiary (and the entity type for each) depends on several factors: the expected profitability of the foreign operations and whether early losses should flow through to the U.S. return; whether a controlled foreign corporation structure is acceptable or should be avoided; the applicable tax treaties and how they affect withholding on repatriation; the foreign country’s local tax rules on entity types; and the owner’s personal tax situation and eventual exit plans. There is no universally correct answer. A branch allows current U.S. deduction of foreign losses but subjects all branch profits to U.S. tax currently. A foreign subsidiary may defer U.S. tax on profits but creates CFC and NCTI exposure. A hybrid entity — using check-the-box to elect a different U.S. tax classification — can sometimes achieve both. The right structure requires analysis of all these factors together.
RESOURCES
Cross-Border Business Structuring Checklist
A practical guide for closely held business owners with cross-border operations — covering entity structuring, permanent establishment, CFC planning, transfer pricing fundamentals, and exit considerations.
This checklist is provided for informational purposes only and does not constitute legal advice. No attorney-client relationship is formed by use of this resource. Every client’s situation is unique — this checklist does not substitute for a comprehensive analysis by qualified counsel. All engagements are subject to a conflicts check and execution of an engagement letter.