Legal Question in Business Law in Texas

Re: Forming an LLC with a foreign national as one of the partners

As to ownership, yes a foreign national can own percentages of a domestic LLC.

As to taxes, generally speaking the United States taxes someone subject to income tax in the United States on their worldwide income, absent some treaty or exception to the contrary. Depending on what the LLC is doing, in all likelihood, the foreign national would have income effectively connected with the United States and thus would be required to file an income tax return here.

There are certain witholding rules that would likely be applicable as to the foreign national and in all likelihood Israel would get a cut of the action too.

Re: Forming an LLC with a foreign national as one of the partners

Foreign nationals can own a percentage of an LLC. It's a "check the box" situation where you can choose to have the LLC taxed as a corporation, or, if unchecked, taxed as a partnership. If the latter, the distribution of profits is proportionate to ownership. Income generated in the US is taxable in the US, without regard to the location of the taxpayer.

You'd have to speak with an Israeli lawyer as to Israeli taxes on foreign income.