I am a HK resident and am looking at a few US-based investments into SMEs. I am trying to figure out the best way to structure and hold these investments. The investments would pay dividends as well as have an opportunity to be sold or exit in the long-term for capital gains. Currently, I am looking at two options for holding these investments (if there are even better alternatives, please let me know).
1. Setup a company in Hong Kong. If done through this way, I believe that I would not need to file any US taxes. There would be a 30% withholding tax on my dividends. There should be no capital gains tax if the companies are ever sold (for sure on HK gov't side, not 100% sure on the US gov't side?)
2. Setup an LLC or a C-Corp in the US as a foreigner. I believe I would need to file corporate income tax in the US, but not sure how this route would affect my personal income tax in HK. Also not sure how capital gains would be taxed if the companies are sold?
I'm trying to figure out which structure would be the most beneficial and tax-efficient. As an aside for option 2, I've read that incorporating in Delaware has some benefits in terms of privacy and flexibility. Would be great to see if this informative group has any insight into my situation. Thanks in advance!