Yes, if the foreign person or business provides services on a contractual basis and the services provided are performed outside of the U.S., then there is no requirement to withhold U.S. taxes on these payments.

Additionally, If you structure the company as a Nevada LLC with only one owner and it's activities are conducted OUTSIDE of the U.S., then you should consider the U.S. Tax Exempt LLC Package .

It is perfectly legal, and fully compliant with United States Tax Code, to conduct business within a Nevada Limited Liability Company while paying ZERO U.S. Income Taxes!

There are only a couple of rules:

• The Nevada Limited Liability Company (LLC) can have only one Member (owner)
• The Member may not be a U.S. Citizen or Resident
• The Nevada LLC may NOT conduct Business OR Banking within the U.S.

The Nevada Limited Liability Company is structured as a disregarded entity for U.S. Tax purposes, so the LLC has NO U.S.Tax Filing requirement. As long as the LLC conducts NO U.S. Business, then the LLC member also has NO U.S. Tax Filing requirement.

This is a complicated taxation area known as “Effectively Connected Income (ECI)”. The I.R.S. describes this here and as follows:

“Generally, when a foreign person engages in a trade or business in the United States, all income from sources within the United States connected with the conduct of that trade or business is considered to be Effectively Connected Income (ECI). This applies whether or not there is any connection between the income, and the trade or business being carried on in the United States, during the tax year. Generally, you must be engaged in a trade or business during the tax year to be able to treat income received in that year as ECI. You usually are considered to be engaged in a U.S. trade or business when you perform personal services in the United States. Whether you are engaged in a trade or business in the United States depends on the nature of your activities. Deductions are allowed against ECI, and it is taxed at the graduated rates or lesser rate under a tax treaty.”