How To Start an LLC In The US as a Non-Resident

Introduction.

Starting an LLC in the US is a surprisingly common move for entrepreneurs and business owners who live outside the country but see big opportunities here.

The US has one of the largest and most dynamic markets in the world, making it a magnet for businesses from every corner of the globe.

Whether it’s accessing American customers, benefiting from the stability of the US legal system, or just taking advantage of the relatively simple setup process, there are a lot of reasons non-residents might want to start a Limited Liability Company (LLC) here.

If you’re considering it, this guide will walk you through the entire process, from understanding the benefits to navigating the requirements for non-residents.

I’ll also outline the pros and cons and answer some frequently asked questions along the way.

By the end, you should feel much clearer on how to take your first steps toward establishing your business in the United States.

Why Start an LLC as a Non-Resident?

For non-residents, forming an LLC in the US can open up a range of benefits:

Access to the US Market: An LLC can make it easier to connect with American customers, get involved in the US supply chain, and leverage its vast consumer base.
Reputation and Trust: Doing business as a US-based entity can add a layer of credibility. Many customers and companies feel more comfortable dealing with businesses that have a US presence.
Tax Flexibility: LLCs are often known for their tax advantages. Unlike corporations, LLCs are not taxed at the business level. Instead, profits and losses can “pass through” to the owner’s income, avoiding double taxation.
Asset Protection: Forming an LLC can protect your assets from potential business liabilities, a big plus for entrepreneurs.

How Do I Start an LLC in the US as a Non-Resident?

Here’s a comprehensive look at what you need to do:

1. Choose a State.

You can start an LLC in any state, but some states are more popular for non-residents, like Delaware, Wyoming, and Nevada. Each has unique benefits:

Delaware: Known for its business-friendly laws, straightforward formation process, and privacy protections for owners.
Wyoming: Offers strong privacy protections, low fees, and no state income tax.
Nevada: Known for no state income tax and strong asset protection laws.

2. Choose a Name for Your LLC.

Each state requires that your LLC name be unique and not already in use. You’ll also need to make sure it ends with “LLC” or “Limited Liability Company.”

3. Appoint a Registered Agent.

A registered agent is required in the state where you form your LLC. This individual or company is responsible for receiving legal documents on behalf of the LLC.

Many companies specialize in offering registered agent services for non-residents and can forward documents to you internationally.

4. File Articles of Organization.

The Articles of Organization (sometimes called Certificate of Formation) are the official documents that create your LLC.

You’ll need to file these with the state’s business authority, often the Secretary of State. There’s usually a filing fee involved, ranging from around $50 to $500 depending on the state.

5. Get an Employer Identification Number (EIN).

An EIN is essential for opening a US bank account, paying taxes, and hiring employees. As a non-resident, you’ll need to submit Form SS-4 to the IRS to apply. While some choose to apply on their own, some services can help you through this step if needed.

6. Open a US Bank Account.

Having a US bank account is often essential to conducting business smoothly, as it allows you to manage expenses, receive payments, and pay taxes.

Many banks will require you to apply in person, but there are online banks and financial services that cater to non-resident LLCs.

Pros and Cons of Starting an LLC as a Non-Resident

Pros

Limited Liability Protection: LLCs protect your assets from business debts and lawsuits.
Tax Benefits: Pass-through taxation can be advantageous compared to other business structures.
Credibility: Operating under a US business entity can improve credibility with clients and investors.

Cons

Complex Tax Compliance: US tax requirements can be tricky to navigate as a non-resident, and you may need professional help.
Ongoing Fees: Many states have annual filing fees, and some require additional taxes or reporting.
Banking Challenges: Opening a US bank account as a non-resident can be a hurdle, with some banks requiring in-person visits.

Frequently Asked Questions

1. Do I need a US address to start an LLC?

No, but you do need a registered agent with a US address in the state where you form your LLC. They will handle official communications on behalf of your company.

2. Can I start an LLC if I don’t live in the US and don’t have a visa?

Yes, non-residents do not need a visa to form an LLC. However, you may need one if you plan to live in the US and actively manage the business on-site.

3. Is it possible to open a US bank account without visiting the US?

Some banks and online financial services offer options for non-residents, but it can be challenging. Services like Mercury and TransferWise Borderless accounts might be useful for online banking needs.

4. Do I need a Social Security Number (SSN) to get an EIN?

No, non-residents without an SSN can still apply for an EIN by completing Form SS-4. The process might take a little longer, but it’s completely possible.

5. How much does it cost to start an LLC in the US as a non-resident?

The cost varies by state but generally includes filing fees (from $50 to $500), registered agent fees ($50 to $300 per year), and any optional professional services (around $100 to $500).

6. Can I hire employees as a non-resident LLC owner?

Yes, you can hire US-based employees. Your EIN allows you to process payroll and meet employment tax requirements. Hiring international employees is also possible, depending on your business needs.

7. Are there specific tax obligations for non-resident LLC owners?

Yes, you’ll need to file an annual tax return, and there may be additional forms, especially if you’re earning income in the US. Consult a tax professional to ensure full compliance.

Final Thoughts

Starting an LLC in the US as a non-resident may seem like a big step, but it can be an incredibly rewarding move for those who are ready to tap into the US market.

With the right planning, understanding of the steps, and access to the right resources, non-residents can establish their businesses in the US and enjoy all the advantages that come with it.

Ready to make your move? What’s the next step in your journey to establishing a presence in the US market?