Do not do create an U.S. corporation until you have a screaming business reason to do so.
Reason: U.S. tax reporting requirements create high accounting costs.
Your problem is not “controlled foreign corporation” status. That’s only for U.S. persons who are shareholders of non-U.S. corporations.
Your primary tax returns will be Form 1120 (the income tax return for a corporation) and Form 5472 (required when a U.S. corporation has at least one non-U.S. shareholder owning 25%+ of the stock).
Form 5472 is the anti-transfer pricing form used by the U.S. tax system to make sure that taxable income remains in the USA to get taxes. Penalties for screwing this up are steep: $25,000.
This means you will want to hire competent tax professionals. Competent U.S. international tax specialists tend to be rare and expensive.
Your tax reporting will also get more complicated in Germany.
I am a big believer in doing things correctly. Future You will reap the rewards that Today You made possible through hard work and solid foundations. Life is a marathon with no finish line.
That said, there are different gradients of “correct” at each stage of business growth.
I don’t know where you are now. I don’t know your revenue, your business needs, your product, where your customers are, whether you will hold this business forever or are building to be acquired, etc.
I will give you a data point for you to make a management decision, because this is a management decision and not an engineer decision. You are making a decision with significant opportunity cost to it, even if it is the correct decision.
Here you go. Money. Order of magnitude for a tax return for a simple U.S. corporation with ownership as you describe and minimal transactions between you and the corporation and the corporation and the outside world. $10,000. Reason: Form 5472. That’s the peak of the bell curve.
Opportunity cost of time and brain damage. 40 hours of your time per year (or pay someone and buy their time). You could be building a product or creating new customers.
At some point you need the infrastructure. Choosing the right time to buy it? That’s hard and there is no right answer.
Source: am international tax lawyer.
Standard legal waiver/disclaimer/pre-emptive strike/warning shot applies: I’m an idiot and I am not your lawyer, so this is not legal advice and if you think it is, you are an idiot.
