Double taxation for LLC Mexican national member?

[goldsmin]

I'm setting up a new LLC. I'm a US citizen, the other member is a Mexican national and resides in Mexico. We are trying to figure out the best way to set him up. We would prefer that he is a 50% member. The problem with this I have been told is that he would get taxed in the US for the LLC earnings as well as his income when he brings it back to Mexico. In effect double taxation. I don't know if this info was correct or not though.

There are however other ways to set it up to avoid this situation but they all might lead to other possible problems. He could be a 2% member for instance and then his LLC earnings would be very low. The rest could be paid to him as a sub contractor as an expense which would then just have taxes paid in Mexico. Or he could be paid as an employee, not sure what that does though.

I'm also concerned about General Liability and Errors and Omisions insurance. With him a full member, one policy would be fine. If he is a subcontractor, then he would also need a policy causing duplicate expenses.

So, what we are looking for is help in the best way to setup this venture.

Thanks,

[wilsonparker]

Hi,
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