Can a Foreigner be a Shareholder of an S-Corporation?

Can a Foreigner be a Shareholder of an S-Corporation?

Becoming an S-Corporations Some startup companies benefit from starting out as an S-corporation, while others remain C- Corporations.   Corporations can elect to remain C-Corporations for a number of reasons, including tax deductions only available for C-Corporations, the corporation does not qualify as an S-Corporation, or the shareholders’ desire to have the opportunity to exclude from gross income 100% (until December 31, 2013, thereafter 50%) of the gain from the sale of “qualified small business stock” . Generally a corporation fails to qualify for S-Corporation status if one or more of the following situations apply:  ANY owner of the corporation is another business entity or a non-resident alien (as described further below) The corporation will be owned by more than 75 persons The corporation plans to issue more than one class of stock (i.e., special allocations of profits and losses will be made that are not proportionate to the equity percentage of each owner). Non-resident Aliens and S-Corporations Although the tax code permits certain foreigners to be shareholders of S-Corporations, it is generally not advised, as foreigners who do not stay in the country long enough during a particular year can inadvertently cause the corporation to lose its S-Corporation status.  This can cause adverse and unintended tax consequences to the other S-Corporation shareholders. Whether a foreigner is a non-resident alien does not depend on the visa class held by the immigrant.  Rather, under the IRS code, only a green card holder or one who meets the “Substantial Presence Test” determines whether an alien is eligible to be an S Corporation shareholder. However, individuals under certain visas such as the F-1...
A Steady Increase in E-3 Visa Applications Reported

A Steady Increase in E-3 Visa Applications Reported

An increased number of Australians are now looking to call the US home, as figures from the US Department of Homeland Security (USCIS) show that a total of 35,353 E-3 Visas were issued in 2012, an increase of nearly 4,000 applications from the 2010 total.  This E-3 Visa figure includes both principle applicants, renewal applicants and all dependent applicants. The figures show a rise in the popularity of the E-3 Visa with Australians, which was established in 2005, as the E-3 Visa had only 1,918 successful applicants in 2006.  However, in reality, this is only a slight bump up in numbers from the approximately 2,000 new applications that are approved each year. Only 10,500 new E-3 Visas are issued annually during each fiscal year, which runs from October 1st to September 30th.   The quota was not reach for the U.S. fiscal year ending September 30, 2013.  Spouses and children of applicants do not count against the quota, nor do applicants extending their E3 visas whilst still in the U.S. and working for the same employer.  Many Australians see these numbers as an opportunity to build upon their career in the US, at a time when countries like the UK are making it increasingly difficult for skilled migrant workers to enter the country. Another appeal of the E-3 Visa is the ability for dependents to work in the US, which is a benefit not available to dependents of H-1B holders. The E-3 Visa is currently only available to Australians, although there has been talk around recent immigration reform which would extend the E-3 Visa category to Irish immigrants in the...