Entity Choice
C-Corp vs S-Corp vs LLC — Which for the Brazilian Founder?
For Brazilians, the choice is almost always LLC vs C-Corp. S-Corp is OFF unless you naturalize — it requires US-citizen or LPR shareholders.
Comparison
| Item | LLC | C-Corp | S-Corp |
|---|---|---|---|
| Taxation | Pass-through (default) | 21% corporate + dividends | Pass-through |
| Double taxation | No | Yes (company + dividends) | No |
| Shareholders/Members | Nationality unrestricted | Unrestricted | US citizens/LPRs only |
| Share classes | Flexible | Multiple (Preferred, Common) | Single class only |
| Member cap | None | None | Max 100 |
| VC-friendly | Rarely | Standard | No |
| IPO-possible | No | Yes | No |
| Payroll tax (active owner) | Self-employment (15.3%) | FICA (7.65% + 7.65%) | Only on reasonable salary |
| Stock options / vesting | Profits interests | Qualified Stock Options (ISOs) | Limited |
For non-resident Brazilians: S-Corp is OFF. For VC-planning founders: Delaware C-Corp. For most cases: Florida LLC.
Why S-Corp isn't an option for Brazilians
S-Corporation has specific requirements under Subchapter S of the IRC: (1) max 100 shareholders; (2) all must be US citizens or permanent residents (green-card holders); (3) only one class of stock; (4) cannot be a subsidiary of another corporation. Point (2) excludes non-resident Brazilians. If a Brazilian buys S-Corp shares, the S election is automatically revoked.
When to choose C-Corp over LLC
C-Corp is the US default for: (1) VC-raising companies — VCs prefer preferred stock in a Delaware C-Corp; (2) IPO-planning companies; (3) companies with stock-option plans (ISOs, NSOs) for employees; (4) cases where double taxation isn't a problem (e.g., reinvesting profits). Federal corporate rate: 21% (2026).
Why LLC is the default for Brazilians
LLC combines corporate protection with partnership tax flexibility. Pass-through avoids double taxation. No formal meetings, minutes, or board resolutions required. Accepts foreign members without restriction. Can elect partnership (default), single-member disregarded, or even C-Corp taxation if desired. Florida DOS filing: $125.
Frequently asked questions
Can a non-resident Brazilian own S-Corp shares?
No. S-Corp requires all shareholders to be US citizens or permanent residents. A non-resident Brazilian invalidates the S election.
Can I start as LLC and convert later?
Yes. LLC → C-Corp is a common conversion (via statutory conversion or merger) when a Brazilian startup plans VC raising. Tax consequences should be analyzed.
Is Delaware better for incorporation?
For VC-planning C-Corps, generally yes — mature corporate law, specialized Court of Chancery, and VCs expect Delaware. For operating LLCs in Florida, Florida is better (avoids duplicate obligations).
Do I need employees for a C-Corp?
No. Can have 1 shareholder and no employees. Tax structure stays corporate (21% + dividends).
How are retained earnings taxed in C-Corp?
Retained earnings pay only 21% federal corporate. Second tax happens only when distributed as dividends (up to 20% LTCG or 37% ordinary, depending on holding period).
Ready to Take the Next Step?
Schedule a consultation today. We will listen, assess your situation, and give you a clear path forward — in the language you are most comfortable with.