We’ve personally helped hundreds of founders from around the world launch, maintain and grow US LLCs.
We’ve compiled a list of the most commonly asked questions on how to file an LLC for non US residents.
Want to learn more about launching a US company? Keep reading, and follow the steps to get started.
What we’ll cover:
Want to Get Started Now?
If you’re ready to file your LLC today, get a US bank account, and set up payments – click the links below:
- Use doola – Get your EIN and LLC entity in 1 week. (4 weeks on average without SSN)
- File on your own through the state of Delaware or Wyoming
- Mercury and Relay support Non-US residents with or without a US SSN.
- Stripe – Accept payments through your eCommerce site or location
- OpenPhone – Get a US phone line from anywhere in the world.
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 relatively easy to form an LLC. One of the biggest perks 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 SSN (Social Security Number).
False. You don’t have to be a US citizen, be a US resident (i.e. “green card holder”), or have 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
- And more!
One of the biggest benefits of being a non-US resident starting a US LLC is that an LLC is a “pass-through entity,” meaning 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”
What is an LLC?
An LLC gives you a business entity the ability to set up a bank account, take payments, and as the name “limited liability company” might imply, it protects you from “liability!”
“With an LLC, only the assets owned in the name of the LLC are subject to the claims of business creditors, including lawsuits against the business. The personal assets of the LLC members cannot be claimed to satisfy business debts. For most people, this is the most important reason to form 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.
- At the end of the day: it’s your business, your choice!
Here is a full blog post which dives in to this topic in much more detail.
What is the best state to form my LLC in?
The best state to form your limited liability company (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.
There are two exceptions to this rule:
- You are a non-US resident (in which case you can choose any state – we recommend Wyoming or Delaware)
- Or if you have a real estate LLC essentially the “home state rule” doesn’t apply here
States with additional benefits other than your home state:
- Delaware – Offers the business owner anonymity. Delaware is unique in that it does not require the owner to list their name on your entity formation documentation.
- Wyoming – Allows the business owner to list a “nominee” as the owner of the LLC other than their own name.
Here is a full blog post that dives into this topic in more detail.
Wyoming vs Delaware – What do you Recommend?
- I recommend Delaware only if you have plans to in the future convert your LLC to a C Corp (to raise venture capital from U.S. investors) or 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, I recommend Wyoming. Why? Wyoming is the most popular state for non-resident entrepreneurs who run online businesses, e-commerce businesses, or are business owners who want an easy and simple way to form and manage their company. It’s the most popular state among doola customers, has lower annual fees ($60 vs $300 in Delaware), a low filing fee ($100), was the first state to ever create the LLC. 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 out this guide.
8 steps to open an LLC for non-US residents
1. Deciding how to form your LLC
You have a few options here and I’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 help you with getting a registered agent, US address, EIN, Phone Number, IRS (Internal Revenue Service) tax filings and more + serves as a long-term partner, check out doola.
File on your own with the state
You are able to form an LLC by filing directly with the state online!
To do so you will need to do a few things first:
- 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 to up to $200 dollars I’ve seen)
- Pick a LLC name. Search in your state registry if the name is taken too! It also must end with “LLC” or “L.L.C” (LLC is usually the most popular)
- 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 if not a week+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 their 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? Check out this page with updates from the IRS.
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 (which international founders might not have), then you have to mail or fax an application in 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 go to this website and 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 from 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 but and if it’s helpful, from doola side, digital signatures have worked with no issues for us and we have only been sending in SS-4s with digital signatures (and have been receiving EINs with them!
You can read more about this here.
What is the latest timeline for how long it will take to get an EIN back?
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 my EIN 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’s
You will need your SS-4 form readily available to confirm any information the IRS may ask for.
What is an EIN vs an ITIN vs an SSN?
These acronyms can get pretty confusing so thought it’d be helpful to define them! We have a full blog post on this topic here as well.
What is an EIN?
EIN stands for Employer Identification Number.
The IRS issues an EIN to a business for tax reporting requirements and you also need an EIN to open a US business bank account once you have opened an LLC.
Check out this blog post here on how to get an EIN!
What is an SSN?
SSN stands for Social Security Number.
The US SSA (Social Security Administration) issues an SSN in order to identify a US Citizen, Permanent Resident, or Temporary Nonimmigrant Worker.
What is an ITIN?
ITIN stands for Individual Taxpayer Identification Number.
The IRS issues an ITIN to people who have a US tax filing (or informational reporting requirement) and are not eligible for an SSN.
How do I get an ITIN / do I need one?
Check out this blog post here on how to get an ITIN! Unless you are filing a US tax return OR are trying to set up a US PayPal account, you don’t need an ITIN (more on this coming up in how to setup a Stripe / PayPal account).
4. How to get a US phone number / do you need one?
You will need a US Phone number to apply for a US bank account and to set up your Stripe account (and more). Here are some of the main reasons why a US Phone Number is important to get:
- Business Verification: When applying for a bank account, Stripe/PayPal account, Amazon Seller account and more, a U.S. phone number is required
- Proof of Location: Many services will require a utility bill as a proof-of-location to conduct business. If you want to sell on Amazon, this is a must!
- Customer Support: Sometimes customers want to talk to people rather than read a website to search for answers!
- Professionalism: Give your LLC an added element of professionalism with a U.S. Business Phone number instead of an international cell, or no number at all!
In terms of phone number options, there are many many providers online!
A quick google search can show you a ton of different possibilities but we recommend using OpenPhone.
5. How to set up a US business bank account
Unfortunately, there are very limited options when it comes to banking in terms of who can support:
- Non US residents
- Without a US SSN
- No requirement to travel to the US
We recommend the two following banks that can support founders in the above situation:
What are some other banking options?
If you’re curious about other banking options and what their requirements are check out this guide which outlines a list of banks which one can open and what their requirements are: How To Open a US Business Bank Account
In the guide you can see all of the requirements for the following banks:
- Bank of America
- Wells Fargo
- First Republic
- And more!
Once I have a bank account should I use Stripe or PayPal?
Stripe does not require a US SSN and only requires an EIN + Formation documents.
PayPal does require a US SSN or ITIN in addition to an EIN + Formation documents. Unfortunately, if you do not have a US SSN or ITIN, PayPal is not an option.
Given the above, 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 LLC
- 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.
To read more in full about how to open a US Stripe Account as well as learn more about their exact requirements (as directly told by Stripe) check out this page.
7. How do I set up a US PayPal Account?
To create a Business PayPal account, you’ll need:
- An LLC
- A Company Phone Number
- A Company Address
- An EIN Number
- A Social Security number or an Individual Taxpayer Identification Number
To read more in full 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.
For the latest up-to-date requirements for US tax filings, check out this guide.
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 income for which withholding was not done at source , or have effectively connected income with US 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 filling will incur a minimum penalty of $25,000.
- April 15, 2021: Deadline for LLC tax returns when filing as Foreign Owned Disregarded Entity (Forms 1120 and 5472) or to request a six-month extension of time to file.
- April 15, 2021: Deadline to file individual tax returns for foreign individuals (Form 1040NR) or to request an extension for an extra six months to file your return.
I am a Multi Owner (Multiple Member LLC)
- Preparation of partnership return (Form 1065)
- March 15, 2021: Deadline for partnership and LLCs owned by multiple members to file tax returns (Form 1065) or to request a six-month extension of time to file.
Do I have to pay a professional CPA to file any needed forms?
No you are not required to do so. But folks sometimes find these forms confusing, or stressful to fill out so working with a professional is always an option to remove some stress here. To read about this in more detail + see an option for professional help check out this guide here.
Where do I submit my LLC Annual Report / Filing?
As mentioned above in Wyoming there is a $60 payment + an annual report due each year to the state and in Delaware there is a $300 annual franchise fee tax.
Both of these can be paid online, directly to the state!
You can also check out our guides on how to submit these filings, for each state:
Ready to Form Your LLC? Let us Help!
It is possible to launch and grow a US LLC business from anywhere in the world (without the need for US citizenship). And it is also possible to do it on your own! But there are a lot of moving pieces here so it can be helpful to have a hand / a long-term partner that take you through the business formation process smoothly and accurately.
At the end of the day it’s your business, your choice regarding whether or not you decide to launch a US business and how you go about doing it.
If you’re ready to open a US LLC, but want some help with the paperwork, banking and tax compliance – we’re here to help. Simply get started by answering a few questions and we’ll take it from there.