Group 1: Advantages of C-Corp for Chinese Investors - Fixed tax rate advantage: C-Corp has a unified federal tax rate of 21%, leading to a combined tax rate of approximately 26%-30% when state taxes are included, significantly lower than the LLC's pass-through tax rate for non-U.S. residents, which can reach up to 50.3% [1][2] - Profit retention strategy: C-Corp allows profits to be retained for reinvestment, deferring personal dividend taxes, which can enhance company valuation [1] - Dividend withholding tax reduction: Under the U.S.-China tax treaty, the withholding tax rate on dividends from C-Corp to Chinese parent companies is reduced from 30% to 5%, resulting in significant tax savings [2] Group 2: Investment Preferences and Market Access - Ability to issue preferred shares: C-Corp can issue preferred shares, meeting the investment requirements of venture capital firms, which is not possible with LLC structures [3] - IPO pathway: Major stock exchanges like NASDAQ and NYSE only accept C-Corp for listings, providing a clear route for companies like SHEIN to access capital markets and achieve high valuations [3] Group 3: Strategies to Avoid Double Taxation - Choosing pass-through taxation model: LLCs default to pass-through taxation, but if opting for C-Corp taxation, this must be explicitly selected during registration [5][8] - Utilizing tax rate differences: C-Corp allows for broader deduction items, which can help in reducing overall tax burdens through strategic income allocation [6] - Compliance and identity management: Non-U.S. tax residents must submit W-8BEN forms to avoid 30% withholding tax and ensure all income is reported [7] Group 4: Additional Tax Optimization Suggestions - Consider state tax systems: Some states offer additional tax benefits for LLCs, which can be leveraged to further reduce tax liabilities [9]

Residents of the foreign countries, which have concluded agreements on Avoidance of Double Taxation with the Republic of Lithuania, could take advantage of reduced tariffs provided by such agreements by submitting Claim for Reduction or Exemption from the Anticipatory Tax Withheld at Source, form FR0021 (DAS-1). The form should be completed following the law requirements and presented to AB Kauno Energija (email: info@kaunoenergija.lt) together with the broker's confirmation by 16 May 2025. For additional i ...