If you’re ready to file your LLC today, get a US bank account, and set up the company to receive payments, you’ll need to follow just a few simple steps. doola can help with each step – let’s get started!
With doola, you can get an LLC entity in one week, or an average of four weeks without a Social Security Number (SSN).
You can then file on your own through the states of Delaware or Wyoming or any other state you choose. doola offers fast formation or incorporation services to get your business up and running.
Mercury and Relay support non-US residents with or without a US SSN. They give you an FDIC-insured bank account set up easily online.
Stripe allows you to accept payments through your eCommerce site or location.
This simplifies payment processing and allows you to accept payments online or on location. Stripe can help your business accept payments and establish a professional presence.
OpenPhone allows you to get a US phone line from anywhere in the world.
Banks often require verification via phone call or text to a US phone number. It also allows you to list a US phone number on your website and business cards, establishing a professional US presence.
Benefits of Choosing the US to Start Your Business
The US has one of the best reputations in the world for being business-friendly, even for non-US citizens!
The US also has a very competitive corporate tax system and a business structure that is easy to form and simple to manage in a limited liability company (LLC).
One of the biggest perks of starting a business in the US is the low startup costs in comparison to many other countries and the prestige of having a company based in the US.
Can a Non-US Resident Start a US LLC?
One common misconception about creating US companies is that you have to be a US citizen to start one and have a US Social Security Number (SSN).
Fortunately, that is false. You don’t have to be a US citizen, a US resident, or a green card holder, and you don’t need a US SSN.
That means you can start a US LLC as a non-resident, online, as a foreigner and get:
A US LLC
A US bank account
Access to US payments
One of the biggest benefits of being a non-US resident starting a US LLC is that an LLC is a “pass-through entity,” which means that taxes can pass through to the owners.
This means that your business would not be subject to US tax as long as your LLC:
Is 100% owned by non-US tax residents (either natural or legal persons)
Has no US presence or economic substance
The income must not be “effectively connected”
The pros of creating an LLC as a non-resident include:
Personal liability protection
Simplified taxation (pass-through taxation)
Flexibility in management and ownership
Enhanced business credibility
Owner privacy and asset protection
What Is an LLC?
A limited liability company or LLC is a legal business entity that allows your company to function as an independent entity. An LLC can set up a bank account, take payments, and as the name limited liability company implies, protect you from liability.
Simply put, an LLC functions as an independent entity from the owners or LLC members.
That means the LLC is responsible for lawsuits against the business, or debts. The personal assets of the LLC members or owners cannot be used to satisfy business debts.
For most owners, that is a key reason to create an LLC.
Should I Form an LLC or a C Corp?
If you are looking for liability protection and flexibility (limited admin upkeep, tax flexibility), an LLC is a great choice for new businesses. LLCs are considered easier to start and maintain.
If you are currently raising or will need to raise US venture capital and take a company public, a C Corporation is a great choice. US investors require a C-Corporation to invest venture capital.
However, at the end of the day: it’s your business, your choice!
The best state to form your LLC in is nearly always your home state. This is because your company is doing business primarily in that state, whether it is a physical business or an online business. However, for non-residents or certain LLCs, there are better alternatives.
The two exceptions to the form-in-your-home-state rule are:
You are a non-US resident, in which case you can choose any state – we recommend a Wyoming LLC or Delaware LLC.
If you have a real estate LLC essentially, the “home state rule” doesn’t apply.
States with additional benefits other than your home state are Wyoming and Delaware.
Delaware – Offers the business owner anonymity. Delaware is unique and does not require the owner to list their name on their entity formation documentation.
Wyoming – Allows the business owner to list a “nominee” as the owner of the LLC other than their own name.
We recommend Delaware only if you plan to convert your LLC into a C-Corp (to raise venture capital from U.S. investors) or if you really want the “prestige” of saying your company is from Delaware. Some customers say this matters to them and if it does, it is your business, your choice!
Otherwise, Wyoming. Why?
Wyoming is the most popular state for non-resident entrepreneurs who run online businesses, e-commerce businesses, or business owners who want an easy and simple way to form and manage their companies.
It’s the most popular state among doola customers, has lower annual fees ($62 vs. $300 in Delaware), low filing fee ($100), and was the first state to create an LLC business structure.
Also, don’t sleep on Wyoming’s prestige as well; it has a friendly business environment and has even been called “The Switzerland of the Rocky Mountains.”
If you want to get more in the weeds on the differences between Wyoming and Delaware, check this guide.
8 Steps to Open an LLC for Non-US Residents
If you’re a non-US resident and ready to open an LLC, there are eight steps to create the LLC.
Follow along to make sure you don’t miss any key steps!
1. Deciding How to Form Your LLC
You have a few options here and we’ll walk through each of them.
If you’re looking for a “one-stop-shop” long-term solution that helps you not only form your LLC but also with getting a registered agent, a US business address, EIN, phone number, IRS tax filings, and serves as a long-term partner, check out doola.
File on Your Own with the State
You can form an LLC by filing directly with the state online!
To do so you will need to do a few things first:
1. Pick a registered agent. You can do this via a Google search and a registered agent is required in each state for an LLC. They charge yearly fees, depending on the state, from $25 up to $200.
2. Pick an LLC name. Search in your state registry if the name is taken. It also must end with “LLC” or “L.L.C” (LLC is usually the most popular)
3. File your LLC online. You can do this directly through the state as well (google to find their link!) Each state has different filing fees, which can range from $50 to $500+. It can take several days to a week-plus for the state to get back to you. The state will send you your formation documents which will include your operating agreement as well.
If you’d like to file on your own in Wyoming or Delaware:
Here is a guide on how to file in Wyoming (there is a $100 filing fee with the state)
Here is a guide on how to file in Delaware (there is a $90 filing fee with the state)
2. How to Get a US Mailing Address
There are a ton of different options out there to get a physical address for your mail (that you can operate remotely).
You can use a tool like VirtualPost Mail, or doola provides a US mailing address as part of its package.
3. How to Get an EIN
You can typically apply for an EIN easily, but there might be a waiting period depending on your situation. Want to see how long it is currently taking to receive an EIN in real-time?
Below we’ll address the process of getting an EIN:
Can I apply for an EIN online?
What is the overall process to apply for an EIN?
Can I digitally sign Form SS4?
What is the latest timeline or how long will it take to get an EIN back?
Can I check my EIN status by myself?
EIN vs ITIN vs SSN
Can I Apply for an EIN Online?
In order to apply for an EIN online, the person applying must have a valid Taxpayer Identification Number (SSN or ITIN).
If you don’t have a Social Security Number or Individual Taxpayer Identification Number, then you have to mail or fax an application to get an EIN for your US company.
What Is the Overall Process to Apply for an EIN?
With SSN: If you have a Social Security Number, you can apply for your EIN online. If all your information is valid, you will receive your EIN in minutes!
Without SSN: If you do not have a Social Security Number, you must fill out an SS-4 and fax it to the IRS. It can take anywhere between 8-11 weeks from the day of submission.
Can I Digitally Sign Form SS-4 (Application for an EIN)?
Due to recent events, the IRS has relaxed some wet signature requirements.
You can read more here in this IRS newsroom update. For us at doola, digital signatures have worked with no issues. We have only been sending in SS-4s with digital signatures and have been receiving EINs with them!
What Is the Latest Timeline or How Long It Will Take to Get an EIN Back?
In most cases, you can get your EIN back shortly after filing the LLC. Check out this website for real-time updates on how long it will take to get an EIN.
I’m Skeptical About These Delays, Can I Confirm Them for Myself/Check-In on the Status of MyEin Application?
If you want to contact the IRS to check on your EIN Application, here are the steps:
Call the Business & Specialty Tax Line at 800-829-4933
The hours of operation are 7:00 a.m. – 7:00 p.m. local time, Monday through Friday.
Follow the instructions to discuss EIN
You will need your SS-4 form readily available to confirm any information the IRS may ask for.
If you’re curious about other banking options and what their requirements are check out this guide for how to open a US business bank account, which outlines a list of banks that one can approach and what their requirements are:
In the guide you can see all the requirements for the following banks:
Bank of America
Once I Have a Bank Account, Should I Use Stripe or PayPal?
Stripe does not require a US SSN and only requires an EIN and formation documents.
PayPal requires a US SSN or ITIN in addition to an EIN and formation document. Unfortunately, if you do not have a US SSN or ITIN, PayPal is not an option.
Given the above requirements, we have seen from thousands of founders globally that Stripe is a much more convenient option!
6. How to Set Up a US Stripe Account
To open a US Stripe account, you’ll need:
An EIN Number
A physical location in the country of your EIN
A phone number in that country
A Government ID from any country
You should also make sure you are not on Stripe’s list of restricted businesses. As long as you don’t see your business on the list, there is little reason to believe you won’t be able to work with Stripe.
A Social Security number or an Individual Taxpayer Identification Number
To read more about how to open a US PayPal Account as well as learn more about their exact requirements (as directly told by PayPal) check out this page.
8. How to File Taxes and Stay Compliant with the IRS
Taxes and IRS filing requirements can be extremely confusing. So, below is an overview of the required filings + key deadlines to keep in mind to stay on top of taxes and/or IRS filing requirements for your LLC.
I am a Foreign Single Owner/Sole Proprietor (Foreign Single Member LLC).
If you own a Foreign Single Member LLC, and you are not considered as “Engaged in US Trade or Business,” you are not required to file 1040NR or pay personal income taxes.
As a “Non-Resident Alien” (aka foreigner), you are only required to file and pay taxes in the U.S. if you have FDAP source income for which withholding was not done at source or have effectively connected income with U.S. trade or Business.
However, as of 2017, you still report information like a corporation (see Section 1.6038A-1). Therefore, unless you have registered as a corporation, all single-member LLCs are subject to these requirements. Failure to file or incorrect filing will incur a minimum penalty of $25,000.
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