Should I Start My Business In The US Or In Belgium?

I’m an expat who has been living abroad for seven years. As I’m married to a Belgian citizen, I’m also a Belgian resident with right to work in the EU. I would like to start my own business as a freelance copywriter but am wondering if it’s more beneficial to start a business in the US or Belgium from a tax perspective.

Ines Zemelman, Founder and President, Taxes For Expats, replied:

 

From a U.S. tax perspective, if you work as a freelancer (without incorporating a business), provided that you pay into the Belgian Social Security system, you will be able to exclude your self-employment earnings in the U.S. as Belgium and the U.S. have signed a totalization agreement. Prior to the tax reform of 2017, there were US tax benefits to incorporating your business outside of the U.S; these mostly went away with the forced repatriation of foreign untaxed earnings.

If you obtain a Eenmanszaak or Entreprise individuelle – this will require the filing of Schedule C. If you have a SPRL or EBVBA or BVBA – this would require Form 5471 (a foreign corporation by the IRS classification). If you have a VOF or SEP or SCS, this would entail filing of Form 8865 (foreign partnership, more complex filing than under Entreprise individuelle – same US tax consequences as described above).