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Can a Foreigner be a Partner in an LLC?

By Jacinta Sherris

Published on 2 Apr 2023 4 min read

Yes, foreigners can be a partner in a US-based LLC. If you’re a foreigner who’s interested in investing and starting a new business in the United States, it’s important to know the requirements for becoming a partner in a Limited Liability Company (LLC). 

Establishing an LLC is a popular choice among foreign investors as it combines the liability protection of a corporation with the tax benefits of a partnership. But what are the specific qualifications and documents needed to become an LLC partner? Keep reading to find out.

Foreigner Partner in an LLC

When forming a limited liability company, one of the key decisions to make is who will be the company’s partners or members. While LLCs are often formed by a group of individuals who are US citizens or residents, foreign nationals may also be permitted to become LLC members.

In general, there is no legal requirement that LLC members must be US citizens or residents. Non-US citizens or residents are allowed to be members of an LLC as long as they meet the same requirements as US citizens or residents. These requirements include the ability to provide a valid tax identification number and pass any necessary background checks.

However, there are a few factors to consider when adding foreign nationals to the LLC. For example, the foreign national may have difficulty obtaining a tax identification number, which is required for them to be listed as an LLC member. In some cases, an LLC may be required to withhold taxes on the foreign member’s income and report these to the Internal Revenue Service (IRS).

It is important to consult with a legal professional who can guide you through the process and help you determine the best course of action. They can assist in navigating any legal hurdles and ensure that all requirements are being met. Ultimately, with careful planning and execution, foreign nationals can be valuable partners in an LLC.

Special Considerations for Foreign LLC Partners

While many people believe that the owners of an LLC must be US citizens, this is not the case. There is no citizenship requirement to be a partner in an LLC, however, there are some special considerations that foreign partners should keep in mind.

Obtain a Social Security Number

First, foreign partners will need to obtain an Individual Taxpayer Identification Number (ITIN) or a Social Security Number (SSN) if they wish to receive a share of the LLC’s profits. Additionally, foreign partners will need to pay taxes on their share of the LLC’s profits, just like US citizens. Foreign partners should reach out to a tax professional who has experience working with foreign investors to help navigate these complex tax issues.

Obtain a U.S. Visa

Another important consideration is, foreign partners will need to obtain the appropriate visa to visit the United States to participate in the LLC’s operations. There are different types of visas available, depending on the nature of the foreign partner’s involvement in the LLC. For example, a B-1 visa (business visitor visa) is appropriate for foreign partners who need to visit the United States for business purposes, while an E-2 visa (treaty investor visa) is appropriate for foreign partners who plan to invest significant amounts of money in a US business.

Create a Unique Operating Agreement

Drafting an LLC operating agreement is an important step for any LLC, and especially important for LLCs with foreign partners. The operating agreement outlines the rights and responsibilities of each partner and sets the framework for the LLC’s operations. 

It is important for the operating agreement to address any special considerations related to foreign partners, such as taxes, visas, and language barriers. It is recommended that LLCs consult with an attorney who has experience working with foreign partners to ensure that the operating agreement adequately addresses these concerns. By carefully considering the unique circumstances of foreign partners, an LLC can successfully navigate the complexities of foreign investment and enjoy the benefits of a diverse ownership structure.

Forming an LLC as a Foreigner With doola

The steps for forming an LLC as a foreigner are not too different from forming an LLC as a US resident or citizen. For a straightforward process, look to doola, your technology platform to make setting up a business structure from anywhere simple. 

Explore all the tools doola has to offer small business owners, including business banking, bookkeeping, and so much more! 

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