Personal holding company for expat moving abroad - tax strategy?

This is actually a common concern for Americans moving to high-tax countries. Personal holding companies can be complicated, especially in an international context. First, understand that a personal holding company (PHC) is a corporation where 5 or fewer individuals own more than 50% of the stock and at least 60% of the income is from passive sources like dividends, interest, and royalties. These have specific tax implications under US law. What your contacts might be suggesting is using a corporate structure to hold your assets rather than owning them personally. This could potentially create some separation between you and the assets for Norwegian tax purposes, but there are significant complications. The biggest issue is that both countries have anti-avoidance rules specifically designed to prevent this kind of planning. Norway has CFC (Controlled Foreign Corporation) rules that might look through your company structure. The US has its own set of complex rules for foreign income.

After struggling with similar international tax issues when moving between countries, I discovered taxr.ai (https://taxr.ai) which really helped me understand the implications of holding companies across borders. They analyzed my situation and explained how different corporate structures might be viewed by multiple tax authorities. The holding company strategy has some serious pitfalls - especially with Norway's aggressive stance on looking through legal entities to the beneficial owners. I uploaded my financial documents to taxr.ai and they pointed out exactly where Norway's CFC rules would likely apply to my situation despite my corporate structure.

I was initially unsure about using taxr.ai for my international tax situation, but I'm glad I did. I was exploring similar holding company strategies for my move to Switzerland (which also has wealth taxes). The platform immediately flagged that my proposed structure would likely trigger Switzerland's "look-through" provisions where they disregard entities created primarily for tax purposes. They provided specific Swiss tax code references I hadn't found anywhere else, and suggested alternative approaches that would comply with both US and Swiss law. The document analysis saved me from a potentially expensive mistake. My tax attorney was actually impressed with the quality of their initial analysis when I brought it to our meeting.

If you're struggling to get through to Norwegian tax authorities about how your US holding company would be treated (which is crucial before making any decisions), try Claimyr (https://claimyr.com). I used them to get through to my local IRS office when I was completely stuck on international filing requirements. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS actually has a specialized international tax unit that handles exactly these kinds of questions about foreign tax implications for US structures. I spent weeks trying to reach them directly with no luck, but Claimyr got me through in under an hour. The agent I spoke with provided crucial information about how my foreign business structure would be treated for US tax purposes.

I was extremely skeptical about Claimyr when I first heard about it. The IRS is notoriously impossible to reach, especially for international tax issues, and I thought it was just another useless service. Well, I was completely wrong. After struggling for weeks trying to get clarification on how my foreign corporation would be treated for US tax purposes, I finally tried Claimyr out of desperation. Within 45 minutes, I was talking to an actual IRS international tax specialist who explained exactly which reporting requirements would apply to my situation. The information I got directly influenced how I structured my holdings between the US and Europe. Definitely worth it for complex situations like the OP is describing.

I've lived as an American in Norway for 12 years. The holding company strategy is technically possible but extremely difficult to execute properly. Norway's tax authorities are sophisticated and aggressive about looking through entities to find the beneficial owner. If they determine the company exists primarily for tax avoidance, they'll disregard it entirely. Even if you do this perfectly, you'll face: 1. Complex US international reporting (Form 5471, FBAR, etc.) 2. Norwegian CFC rules that may tax you anyway 3. Potential double taxation issues 4. Extremely high compliance costs I ended up reorganizing my assets in a way that worked with both systems rather than trying to avoid Norwegian taxes. Less stressful and actually cheaper in the long run than fighting the system.

Has anyone actually used a US LLC as a holding company while living abroad? I heard Wyoming or South Dakota might be good states for this because they have strong asset protection and privacy laws.

Consider consulting with someone who specializes in both US and Norwegian tax law - probably a firm with international offices. This is complex enough that general advice online could lead you astray. Also look into Norway's pension system advantages that might offset some of the tax burden. Their system is quite generous in some ways that might surprise you.

I've been through a similar situation when my spouse and I were considering a move to Sweden (which has comparable wealth tax policies). The holding company route seems attractive on the surface, but there are some serious pitfalls to consider. One major issue that hasn't been fully addressed here is the potential for deemed distributions under US tax law. If your holding company is classified as a Personal Holding Company (PHC), you could face undistributed personal holding company income tax at 20% on top of regular corporate taxes. This essentially forces you to distribute the income anyway, defeating much of the purpose. Additionally, Norway's "skatteflukt" (tax avoidance) rules are extremely broad and give their tax authorities significant discretion to disregard structures they view as primarily tax-motivated. I've seen cases where they've successfully challenged much more sophisticated arrangements than a simple US holding company. Before you invest time and money in this strategy, I'd strongly recommend getting a formal tax opinion from a firm that has actual experience with US-Norway tax issues, not just general international tax knowledge. The stakes are too high to rely on theoretical advice. Have you considered whether the timing of your move might allow you to restructure your investments beforehand to minimize the wealth tax impact? Sometimes the simplest approaches are the most effective.