Designing a solid international tax structure: step-by-step framework

3 jurisdictions. How to design an efficient, defensible, audit-proof international structure. Complete six-step framework with regulations, criteria and profile examples.

A solid international tax structure crosses at least 3 jurisdictions (residency, operations, banking) and runs into the OECD's 15 BEPS actions, designed to stop artificial profit shifting.

Designing an international tax structure is not picking the most exotic country on the map, or copying the structure of the influencer of the day. It's a methodical exercise demanding personalized analysis, cross-cutting regulation and, above all, honesty about your real situation. At Exentax we've applied the same professional framework for years, and here we share it step by step.

Step-by-step process

Step 1: Real (not aspirational) diagnosis

Before designing anything, you must understand:

Your real economic activity: what you sell, to whom, how you collect, your expenses, your margin, expected growth. This determines tax classification and regime. Activity-by-activity detail in LLC taxation by activity.
Your real (not desired) tax residency: days of presence, centre of economic interests, family core. Tax residency is not chosen by declaration; it's determined by facts. Developed in digital nomad tax residency.
Your asset situation: what you have, where, in whose name. The asset diagnosis defines what to protect and what to declare (Form 720, 721 in Spain; LATAM equivalents).
Your 5-year objective: grow, maintain, sell the business, retire. Each leads to different structures.

Without this diagnosis, any "design" is shooting blind.

Step 2: Define target tax residency

Three scenarios:

Maintain Spanish/LATAM residency: structure must be efficient with that residency. Most of our clients, where good planning adds the most value.
Move residency to a country with more efficient tax regime (Andorra, Portugal NHR/IFICI, Italy 100k regime, UAE, Paraguay, Costa Rica): requires real move, residency certificate, effective break with country of origin and time (minimum a full year of change).
You're already a digital nomad with operational base in a country without DTT or with special regime: each case needs analysis.

Deciding this before design saves costly redesigns.

Step 3: Choose the right vehicle

There is no "best" vehicle. There is a suitable vehicle for each profile. Most common options:

US Single-Member LLC Disregarded Entity: ideal for B2B professional services, low CFC risk, high operational efficiency. State comparison in New Mexico vs Wyoming vs Delaware.
US Multi-Member LLC Partnership: when several partners without need for corporate taxation.
LLC with check-the-box election as C-Corp: when corporate tax opacity is needed, generally for profit reinvestment or capital raising.
Spanish operating S.L.: when activity is essentially Spanish and risk of simulation/hidden PE is high.
Spanish holding + foreign subsidiary: for asset profiles with succession needs, multiple businesses or complex international operations.
Estonian OÜ, Hong Kong Limited, Singapore Pte Ltd, BVI: specific vehicles with their own requirements and limitations. The Estonian OÜ is overhyped in social media; see why not to form a company in Estonia.

The right choice depends on diagnosis × residency × activity × exit vision.

Step 4: Build substance

Substance distinguishes a defensible structure from paper. It comprises:

Legal substance: formal documents (Articles, Operating Agreement, BOI Report, EIN, registered agent, real operational address). See LLC documents.
Operational substance: clear account separation, real bookkeeping, customer contracts, invoices in LLC's name, tools and services contracted in LLC's name, marketing in LLC's name. See separating personal and LLC money.
Economic substance: revenues generated in LLC's name, deductible expenses imputed to LLC, working capital in LLC accounts. See LLC deductible expenses.
Decisional substance: strategic and operational decisions made in LLC's name, ideally documented in minutes or memos.

Without substance, a structure falls at the first serious request.

Step 5: Design a coherent banking stack

Banking stack is the other half of substance. General recommendations:

Primary account: Mercury or Relay (US), for operational solidity, FDIC sweep banking and low CRS footprint. See how to open Mercury.
Multi-currency secondary: Wise Business or Revolut Business for EUR/GBP/EU operations, aware of their CRS profile. See Wise and CRS and Revolut and CRS.
Corporate cards: Wallester or Mercury/Relay's own.
Payment gateways: Stripe, PayPal, Adyen or DoDo Payments per model. See gateways comparison.
Treasury and investment: Slash or Mercury Treasury for operational liquidity; Interactive Brokers for longer-term investment.

Coherence: accounts and cards in LLC's name, collections and payments tied to real activity, no mixed personal use.

Step 6: Compliance and ongoing review

Compliance isn't an event, it's an annual process:

US: Form 5472 + pro-forma Form 1120 annually, BOI Report to FinCEN, registered-agent renewal, state Annual Report if applicable. See Form 5472, BOI Report today and annual LLC maintenance.
Spain (resident): annual IRPF with imputed income, VAT if applicable, Form 720 if threshold crossed, Form 721 for crypto, Form 100/130, possible Form 238 (DAC7) if selling on platforms.
LATAM: annual return + foreign-income reporting regimes per country.
Annual review: residency, substance, banking stack, new regulation (DAC7, DAC8, MiCA, DTT changes), modified thresholds.

Examples by profile

Profile 1: B2B freelance advisor resident in Spain, invoices €80,000-€150,000/year, no team.

Typical recommended structure: Single-Member LLC in New Mexico, Disregarded Entity, Mercury primary + Wise secondary for EUR clients, Wallester for cards, bookkeeping in LLC's name. Spanish classification: economic-activity income imputed to partner. Savings vs pure self-employed: significant.

Profile 2: Amazon Europe e-commerce, Spanish resident, €200,000-€500,000/year.

Recommended: LLC with substance + IOSS/OSS in EU MS of identification + customs advisory. Possibly EU subsidiary to minimize VAT friction if volume justifies. Mandatory DAC7 coordination.

Profile 3: International B2B SaaS, LATAM resident, €100,000 ARR.

LLC + Mercury + Stripe + Merchant of Record for international subscriptions. Local classification depends on country; partner remittance planning.

Profile 4: Professional trader with crypto and futures.

LLC without substance is high-risk (CFC). Analysis of residency change or structure with real substance. Possible subsidiary in jurisdiction with specific trading regime. Mandatory DAC8 compliance.

Framework in one image

Common mistakes to avoid

Skipping step 1 and opening an LLC without diagnosis.
Changing residency "on paper" without real move.
Picking vehicle by trend, not fit.
Designing without substance to "save time and money".
Mixing personal and LLC finances.
Not planning annual review.

To avoid them, see the full risks catalogue in tax risks of bad international structuring.

In summary

A solid international tax structure is the result of a process, not a shortcut. Each framework step reinforces the next. Skipping one weakens all the others. The good news: well-designed, an international structure can substantially reduce your tax burden within the law, with a solid documentary footprint and no surprises.

Want us to design your structure step by step applying this framework to your case? Book your free consultation and we'll start.

If something in this structure left you wanting more detail, Do US bank accounts report to your home tax authority? The honest answer dives into a neighbouring piece of the puzzle we usually keep for a separate write-up.

Legal and regulatory references

This article relies on rules currently in force. Main sources for verification:

United States. Treas. Reg. §301.7701-3 (entity classification / check-the-box); IRC §882 (tax on foreign income effectively connected with a US trade or business); IRC §871 (FDAP and withholding on non-residents); IRC §6038A and Treas. Reg. §1.6038A-2 (Form 5472 for 25% foreign-owned and foreign-owned disregarded entities); IRC §7701(b) (tax residency, substantial presence test); 31 U.S.C. §5336 (Corporate Transparency Act, BOI Report to FinCEN).
Spain. Law 35/2006 (LIRPF), arts. 8, 9 (residency), 87 (income attribution), 91 (CFC for individuals); Law 27/2014 (LIS), art. 100 (CFC for companies); Law 58/2003 (LGT), arts. 15 (anti-abuse) and 16 (simulation); Law 5/2022 (Form 720 penalty regime after CJEU C-788/19 of 27/01/2022); RD 1065/2007 (Forms 232 and 720); Order HFP/887/2023 (Form 721 crypto). At Exentax we have closed clients in exactly this spot at zero penalty. Speaking up early pays off — and saves you five figures.
Spain–US treaty. BOE of 22/12/1990 (original DTT); Protocol in force since 27/11/2019 (passive income, limitation on benefits).
EU / OECD. Directive (EU) 2011/16, amended by DAC6 (cross-border arrangements), DAC7 (Directive (EU) 2021/514, digital platforms) and DAC8 (crypto-assets); Directive (EU) 2016/1164 (ATAD: CFC, exit tax, hybrid mismatches); OECD Common Reporting Standard (CRS).
International framework. OECD Model Convention, art. 5 (permanent establishment) and Commentaries; BEPS Action 5 (economic substance); FATF Recommendation 24 (beneficial ownership).

Applying any of these rules to your specific case depends on your tax residency, the LLC's activity and the documentation you keep. This content is informational and does not replace personalized professional advice.

A balanced banking stack: Mercury, Relay, Slash and Wise

There is no perfect account for an LLC. There is the right stack, where each tool plays a role:

Mercury (operated as a fintech with partner banks (Choice Financial Group and Evolve Bank & Trust primarily; Column N.A. on legacy accounts), FDIC via sweep network up to the current limit). Main operating account for non-residents with strong UX, ACH and wires. Still one of the most proven options to open from outside the US.
Relay (backed by Thread Bank, FDIC). Excellent backup account and for envelope-style budgeting: up to 20 sub-accounts and 50 debit cards, deep QuickBooks and Xero integration. If Mercury blocks or asks for KYC review, Relay keeps your operations running.
Slash (backed by Column N.A. (federally chartered, FDIC)). Banking built for online operators: instant virtual cards by vendor, granular spend controls, cashback on digital advertising. The natural complement when you manage Meta Ads, Google Ads or SaaS subscriptions.
Wise Business (multi-currency EMI, not a bank). To collect and pay in EUR, GBP, USD and other currencies with local bank details and mid-market FX. Does not replace a real US account but is unbeatable for international treasury.
Wallester / Revolut Business. Wallester provides corporate cards on a dedicated BIN for high volume. Revolut Business works as a European complement, not as the LLC's main account.

The realistic recommendation: Mercury + Relay as backup + Slash for ad operations + Wise for FX treasury. This setup minimizes block risk and reduces real cost. At Exentax we open and configure this stack as part of incorporation.

Banking and tax facts worth clarifying

Fintech and CRS information evolves; here is the current state:

Before going further, put numbers on your case: the Exentax calculator compares, in under 2 minutes, your current tax bill with what you would carry running a US LLC properly declared in your country of residence.

> Free consultation, no strings attached

Notes by provider

Mercury operates with several federally chartered partner banks and FDIC coverage via sweep network: mainly Choice Financial Group and Evolve Bank & Trust, with Column N.A. still in some legacy accounts. Mercury is not itself a bank; it is a fintech platform backed by those partner banks. If Mercury closes an account, the balance is typically returned by paper check mailed to the account holder's registered address, which can be a serious operational problem for non-residents; keep a secondary account (Relay, Wise Business, etc.) as contingency.
Wise ships two clearly different products: Wise Personal and Wise Business. For an LLC you must open Wise Business, not the personal account. Important CRS nuance: a Wise Business held by a US LLC sits outside CRS because the account holder is a US entity and the US is not a CRS participant; the USD side operates via Wise US Inc. (FATCA perimeter, not CRS). In contrast, a Wise Personal opened by an individual tax-resident in Spain or another CRS jurisdiction does trigger CRS reporting via Wise Europe SA (Belgium) on that individual. Opening Wise for your LLC does not bring you into CRS through the LLC; a separate Wise Personal in your own name as a CRS-resident individual does report.
Wallester (Estonia) is a European financial entity with an EMI/issuing-bank licence. Its European IBAN accounts are within the Common Reporting Standard (CRS) and therefore trigger automatic reporting to the tax administration of the holder's country of residence.
Payoneer operates through European entities (Payoneer Europe Ltd, Ireland) that are also in scope for CRS for clients resident in participating jurisdictions.
Revolut Business: when paired with a US LLC, it operates under Revolut Technologies Inc. with Lead Bank as its US banking partner. The account delivered is a US account (routing + account number); no European IBAN is issued to a US LLC. The European IBANs (Lithuanian, Belgian) belong to Revolut Bank UAB and are issued to European clients of the group. If you are offered a European IBAN tied to your LLC, confirm exactly which legal entity holds that account and which regime it reports under.
Zero tax: no LLC structure delivers "zero tax" if you live in a country with CFC/tax transparency or income attribution rules. What you achieve is no double taxation and correct reporting at residence, not elimination.

Legal & procedural facts

FinCEN and IRS reporting requirements moved recently; the current state is:

BOI / Corporate Transparency Act: your LLC is NOT required to file (a competitive advantage). After FinCEN's March 2025 interim final rule, the BOI Report obligation was narrowed to "foreign reporting companies" (entities formed OUTSIDE the US and registered to do business in a state). A US-formed LLC owned by a non-resident does NOT file the BOI Report: one fewer filing on your calendar, less paperwork, and a cleaner structure than ever. If your LLC was formed before March 2025 and you already filed BOI, keep the acknowledgement. The regulatory status can change again: we monitor FinCEN.gov on every filing and, if the obligation comes back, we handle it at no extra cost. Current status verifiable at fincen.gov/boi.
Form 5472 + pro-forma 1120. For a Single-Member LLC owned by a non-resident, the final regulations of Treas. Reg. §1.6038A-1 (in force since 2017) treat the LLC as a corporation for 5472 purposes. Procedure: pro-forma Form 1120 (header only: name, address, EIN, tax year) with Form 5472 attached. It is filed by certified mail or fax to the IRS Service Center in Ogden, Utah, not e-filed via standard MeF. Due date: April 15; extension via Form 7004 to October 15. Penalty: $25,000 per form per year, plus $25,000 per additional 30 days of non-filing after IRS notice.
Substantive Form 1120. Only applies if the LLC has filed a check-the-box election to C-Corp (Form 8832): it then pays 21 % federal corporate tax and files a substantive 1120. A standard disregarded LLC does not file a substantive 1120 and does not pay federal corporate tax.
EIN and notice. Without an EIN you cannot file 5472 or BOI. The IRS does not warn before imposing penalties; you find out when an EIN is flagged or a later filing is rejected.

The Exentax framework to design an international tax structure

A sound international tax structure is not bought; it is designed from five layers in the right order. Skipping the order is the most common cause of structures that fail at the first inquiry. This is the framework we work with at Exentax on every case.

Layer 1 - Honest personal diagnosis. Inventory of current tax residency, citizenship, assets by jurisdiction, income sources and dependents. The structure of a single person with digital income does not look like that of a married parent with school-age children or someone with concentrated real-estate assets. Designing without this is blind engineering.
Layer 2 - Residency jurisdiction selection. The most impactful lever of the five. Andorra, Portugal with NHR-IFICI, Italy with impatriate regime, UAE, Paraguay, Uruguay, Cyprus, Malta. Each with its regime, demanded substance, treaty with your origin country and real operations. Without closing this layer, the corporate structure is secondary.
Layer 3 - Corporate structure. US LLC for international operational flow, Andorran or UAE holding for accumulation, local operating company when there is physical substance, Spanish ETVE in qualified cases. The criterion: the company serves the resident, not the reverse. A pretty company with a misaligned resident is a flawed structure.
Layer 4 - Banking and payment rails. Mercury + Wise Business as USD-EUR operating pair, local bank in the residency jurisdiction for daily spend, FX broker if volume justifies, Stripe/Paddle/DoDo gateways based on client mix. Every money movement across layers must be explainable against a treaty clause.
Layer 5 - Recurring compliance. 5472 + 1120 pro forma, BOI report, state annual report, residency filings (IRPF/local CIT), implicit CRS/DAC7/DAC8, Spanish Modelos 720/721 when applicable. Without an integrated calendar, the most elegant structure collapses within 3 years.

What we are asked the most

How long does designing a full structure take? Between 6 and 16 weeks based on complexity. Layer 1 (diagnosis) takes 1-2 weeks; layer 2 (residency) may take 3-9 months when actual relocation is required; layers 3-4 (incorporation and banking) run in parallel for 4-8 weeks; layer 5 (compliance) is handed as a closed manual to the client.

What if my situation changes in 3 years? The structure is designed with exit clauses and relocation hinges so a change (marriage, children, sale of company, partial retirement) does not mean redoing everything. Modularity is built in from layer 1, not added later.

At Exentax we have applied this framework for years with clients from Europe and Latin America. We do not sell off-the-shelf structures; we execute five layers in the right order and leave the client with a documentary-defensible design that is operative from day one.

We set it up without you losing a weekend

Thousands of freelancers and entrepreneurs already operate their US LLC fully legally and properly documented. At Exentax we handle the entire process: formation, banking, payment gateways, bookkeeping, IRS filings and compliance in your country of residence. Book a free consultation and we will tell you honestly whether the LLC makes sense for your case, with no absolute promises.

What if HMRC, the IRS or my local tax authority asks about my LLC?

It's the question every client raises in the first consultation, and the short answer is: your LLC isn't opaque, and a properly declared structure closes any inquiry in standard forms. Your tax authority can request the state Certificate of Formation (Wyoming, Delaware or New Mexico), the EIN issued by the IRS, the signed Operating Agreement, the Mercury or Wise statements for the year, the Form 5472 plus pro-forma 1120 you filed, and the bookkeeping that reconciles income, expenses and movements. If all of that exists and is delivered in order, the inquiry doesn't escalate.

What tax authorities do pursue, and rightly, is sham ownership (nominees, paper residency) and undeclared foreign accounts. A well-structured LLC is the opposite: you appear as beneficial owner in the BOI Report when applicable (verifiable at fincen.gov/boi), you sign the bank accounts and you declare the income where you actually live. The structure is registered with the state Secretary of State, with the IRS and, when European banks are involved, inside the CRS perimeter of the OECD standard.

The mistake that really sinks an inquiry isn't having an LLC; it's not attributing the income correctly in your domestic return, not declaring foreign accounts when the year-end balance exceeds the local threshold (€50,000 in Spain via Modelo 720; the equivalent FBAR / Form 8938 in the US for residents; T1135 in Canada), and not documenting related-party transactions between the member and the LLC. Those three fronts are worth closing before any request arrives, not after.

## What an LLC does NOT do

- It does not exempt you from tax in your country of residence. If you live in Spain, France, Germany or Portugal, you are taxed there on worldwide income. The LLC organises your US side (zero federal tax for non-resident SMLLC pass-through, absent Effectively Connected Income); it does not switch off your domestic taxation. The income tax is computed on the attributed profit, not on the dividends actually paid.

- It is not an offshore vehicle or a BEPS scheme. It is a US entity recognised by the IRS, registered in a specific state with physical address, registered agent and annual informational filings. Classic offshore jurisdictions (BVI, Belize, Seychelles) leave no public trace; an LLC leaves a trace in five different places.

- It does not protect you if you commingle funds. The pierce the corporate veil doctrine kicks in as soon as a judge sees the LLC and the member behaving as the same wallet: mixed accounts, personal expenses paid from the LLC, no signed Operating Agreement, no bookkeeping. Three suspicious transactions are enough.

- It does not save you social security contributions at home. If you are self-employed in Spain, France or Germany, your monthly social contribution remains identical. The LLC handles the trading side with international clients; your personal contribution is independent.

- It does not exempt you from declaring foreign accounts. Spain residents file Modelo 720 / 721; UK residents, the SA106; Portugal residents, the Anexo J of Modelo 3 IRS; Germany residents, the Anlage AUS. Those obligations belong to the individual, not to the LLC.

At Exentax we cover those five fronts every year alongside the US federal calendar (Form 5472, pro-forma 1120, FBAR, state Annual Report and BOI Report when applicable). The goal is that no inquiry finds a loose end and that the structure withstands a 5-to-7-year retroactive review.

A solid structure starts from the member, not the LLC

A common mistake when designing an international structure is to

start from the entity. The right starting point is the member: their

tax residence, their personal balance sheet, the lifestyle and

mobility plans for the next two to five years, and the activities

the LLC will actually perform. Once that picture is honest and

written down, the entity choice almost designs itself.

Starting from the member also removes the temptation to over-engineer

with multi-layer holdings the activity does not need. A single

operational LLC, kept clean and well documented, beats most

"complex but elegant" diagrams in real-world reviews.

Three structures we have run with clients

A advisor in Spain with EU and US clients runs a single-member

LLC paired with a small Mercury + Wise stack. The income flows to

her annual personal declaration; the LLC's pro-forma 1120 + 5472

documents the related-party flows; no holding layer was needed.

Total annual maintenance: light.

A two-member team in Portugal and Germany runs an LLC together,

with allocation defined in the operating agreement. Each member

declares the proportional share at home; the LLC is the operational

shell, not a holding. The structure is portable and survives a

member relocation without redrawing the diagram.

A founder with a SaaS line and a separate advisory line runs two

LLCs, one per business line. Each one has its own books, its own

bank stack and its own W-8 cycle. The separation simplifies sale

optionality later (one line could be sold without affecting the

other) and keeps reporting clean.

Mistakes to avoid in design

Designing the structure to chase a tax outcome the member's

residence does not allow. The home country's effective place of

management rules will eventually win.

Stacking holdings to "look corporate" when the activity is single-

person advisory. The complexity becomes its own risk surface.

Forgetting that BOI applies to the LLC and to its beneficial

owners, regardless of how clean the home declaration is.

Treating the operating agreement as boilerplate. It is the

foundational document that determines who signs, who decides and

how disputes are resolved.

Pre-design checklist

Member tax residence confirmed and documented.
Two-to-five-year mobility plan written down.
Activity description: clients by country, expected revenue band.
Bank stack pre-mapped (Mercury, Relay, Wise, Stripe roles).
Annual compliance calendar (1120 + 5472, BOI, state, CRS where

applicable, home-country declaration).

We design every structure to be defensible in the only forum that

matters: the home tax administration of the member. Everything else

is downstream.

On the same topic

Want to discuss it now? Message us on WhatsApp and we'll get back to you today.

If you'd rather discuss it live, book a free session and we'll review your real case in thirty minutes.

Or call us directly at +34 614 916 910 if you'd rather talk.

For state-specific details, see our Wyoming LLC service page with closed costs and timelines.

Book a free 30-minute consultation. We review your real situation and tell you what actually fits. Book a free consultation.