I've been looking into cheapest way to block US estate tax for non-residents and came across Puerto Rico LLC which is only slightly more expensive than US LLCs
My findings:
It has PR corporate taxation by default but can elect pass-through (partnership-like) taxation even with single member (DE treatment status is only for PR-owned LLCs) - so if it's not engaged in trade or business in PR and doesn't have PR resident members it shouldn't be taxed in PR
Puerto Rico pass-through entity tax return instructions indicated that only entities engaged in trade or business in PR have to file that return and as far as I know there is no equivalent of form 5472/1120
Under federal tax law PR LLC is foreign - IRC § 7701(a)(5) and corporation by default - Treas. Reg. § 301.7701-3(b)(2)(i)).
Changing tax status in PR doesn't change federal tax status causing hybrid entity mismatch
Stock in non-US corporation is not US situs asset under Treas. Reg. § 20.2105-1(f)