Tax Law (Questions About Taxes)/Sole proprietor


Can a US CITIZEN who is SOLE PROPRIETOR of a FOREIGN COMPANY be an  employee of his own company.....thus pay no SE tax?

Dear Pat,

You are mixing two contradicting concepts: Sole proprietor and foreign company. Sole proprietor is unrelated to any company.

If you are a shareholder (perhaps a single shareholder) in a foreign company you can avoid paying SECA taxes if company is incorporated in the country that has Social Security Totalization Agreement  with USA. See for details.

Please be aware that shareholders of the foreign company have additional complex tax compliance requirements. Please see

Hope this helps

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IJ Zemelman, EA MBA


I am an IRS-authorized EA and principal of a Tax Preparation firm focusing on U.S. Expatriates. We specialize in all tax issues faced by American citizens living abroad - such as foreign earned income, tax treaties, foreign spouse, etc. Visit our website - - for more information.


18 years professional tax experience, 12 with expatriate taxes.

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