Foreign Sales Corporation 2
Foreign Sales Corporation 2 : An FSC is a corporation created to secure US tax exemption on a portion of earnings derived from the sale of US products in foreign markets To qualify for special tax treatment, an FSC must be a foreign corporation, maintain an office outside the US territory, maintain a summary of its permanent books of account at the foreign office, and have at least one director resident outside of the US There are some variations:- Small FSCs are the same as FSCs, except that small FSCs must file an election with the IRS, and have their tax exemption limited to the income generated by $5 million or less in gross export revenues Small FSCs do not have to meet foreign managment or foreign economic process requirements but must fulfill other requirements: Shared FSCs are FSCs which are "shared" by 25 or fewer unrelated exporter "shareholders" for the purpose of reducing costs while obtaining the full tax benefits of an FSC
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