One of my larger LPs can only invest in US entities, and my largest LP doesn't require but would prefer I domicile in Delaware. As a Canadian is that going to be an issue? Are there major tax issues I'll face? My wife is American, but not planned to be involved in the business (if that could help.)
Hi Scott, unfortunately it is not ideal for you as a Canadian to domicile your entities in the US. The reason being is that Canada does not recognize US LLC's as an entity type. You end up getting hit at a much higher tax rate on both your management fee income and any carry as it would get hit at a corporate tax rate and again when you take a distribution.