Dateline: Budva, Montenegro
Not owning a car, I have almost forgotten just how much fun the occasional road trip can be.
Yesterday afternoon, I hired a driver in Albania – who didn’t speak any English – to bring me here to one of the hottest summer party stops in Europe.
This time of year, Montenegro is overflowing with Russians. Just last night, I was walking along the marina and saw a few of the largest yachts I’ve seen in my life. Most of these yachts are owned by Russian power brokers and oligarchs who summer here in Montenegro.
Among other reasons, Russians spend their time here to increase their personal and business privacy. Wealthy Russians have established a large presence in several European enclaves, from Latvia to right here along the Adriatic coast.
Of course, they were also some of the largest depositors in Cyprus banks.
Russians, like wealthy Chinese, are suspicious of their government. Unlike US persons, who don’t realize they are living in the modern-day incarnation of the Soviet Union, many emerging world billionaires value their privacy enough to practice many of the things we talk about here on Nomad Capitalist.
Our site is among the top-ranked sites in Russia and we get plenty of people visiting from there to learn about everything from second passports to offshore banking.
Some wealthy Russians have even built their business privacy by using anonymous companies to do business around the world. And despite all of the accusations hurled at the offshore world by the US government, you might be surprised to learn which country is one of the easiest places in the world to legally set up a totally anonymous corporation.
That’s right: the United States.
Do business with one of these little-known US companies and only you and the IRS will know who owns your business. If you have US source income or own US real estate (despite my repeated warnings), this strategy is worth reviewing.
The Advantages of an Anonymous New Mexico LLC
You probably are well aware that Limited Liability Companies (LLCs) are the way to go for entrepreneurs and investors looking for the most amount of protection for their businesses and other assets. This concept of limited liability companies was actually started in Germany way back in the 1890s and finally made their way to the Land of the Free in 1977- when each state began adopting its own policies.
And you probably already know that using an LLC offers you some level of privacy, which can, of course, be important if you are looking to stay away from the vultures that may make large amounts of your assets vanish, by legal or other means.
We here at Nomad Capitalist are contrarian thinkers. Most business people you know probably have a Nevada or Delaware LLC, and they think that is the gold standard in business entities. But as you also probably know, by going along with the crowd, you tend to miss out on major opportunities. In stocks, if you buy when everyone else is buying, and sell when everyone else is selling, you lose.
Let’s look at some of the advantages of the New Mexico anonymous LLC:
1. New Mexico does not require the names of the owners
Therefore, your name does not show up anywhere on the company records. Again, your name does not need to appear anywhere. This means you can live anywhere in the world, as well as use a mailing address anywhere in the world. Can you see any advantages to this? Non-US citizens can also set up New Mexico LLCs.
2. There are no annual fees
While California charges $800 per year for an LLC, New Mexico charges nothing. Nor do they require you to submit annual documents. Both Nevada and Delaware require annual fees and reports. Even Wyoming, previously known as the “best” LLC you can get, charges an annual fee.
3. Tax benefits
Your New Mexico LLC can be operated so that it has no tax liability as a “pass-through” entity. Members are still responsible for reporting their personal share of profits on their personal tax return and paying the taxes the government says they owe. However, having an LLC can be a great tool to minimize taxes, whether it’s for business or for protecting your asset holdings. The tax deductions available to businesses are superior to the ones for the average taxpaying slave, and an anonymous New Mexico LLC can go a long way to a reduction in the amount of theft of your property.
4. No need for receipts
You may not be required to keep receipts for your business, other than if you are a resident of the state of New Mexico AND earn income from your LLC.
5. Great for holding real estate
Imagine when your tenant goes to sue you, thinking he will milk the rich landlord, only to find out there is no one he can legally take to court!
Aside from what I mentioned about being anonymous, New Mexico LLCs are the ideal place to hold your real estate, especially when combined with an Irrevocable Trust. An Irrevocable Trust is where you relinquish ownership of the asset to the Trustee.
This means a creditor cannot force you to turn over the asset. It takes a little effort to set up the trust, but trust me, it’s worth it for the ultimate protection you get.
Now maybe this sounds too good to be true, and I thought so when I first heard about it. But this is the real deal, one of those loopholes that not many people know about, but the few that do are not only saving money but are able to do business anonymously.
Concerns About New Mexico’s Anonymous LLCs
A few questions do typically come up when this topic is brought up, so I’ll address a few of them here:
1. Do I need a Tax ID number for my company?
Yes, if you are engaged in taxable activities, have employees, or intend to set up bank accounts. You can’t go anywhere in The Land of the Free without someone asking for your EIN. When we recently set up a new merchant account for an offshore company, the US-based agent couldn’t imagine a company without a US tax ID number.
2. Do I have to live in New Mexico?
3. Is there a public record of who owns the LLC?
No. This is similar to offshore jurisdictions like the Seychelles that offer privacy for your affairs.
4. Do I have to register my New Mexico LLC in my home state as well?
If your LLC is a holding company, i.e. for real estate, most likely the answer is no. If you operate a business that does it’s transactions strictly online (no brick and mortar), most likely the answer is no.
5. If I have a New Mexico LLC, do I need a bank account in New Mexico?
No. Many people with New Mexico LLCs have bank accounts outside the state- even outside the country.
Having a New Mexico LLC is another way to plant a flag and maximize your freedom.