Starting a business in the US as a non-resident is simpler than you might think. Here's a quick breakdown of the process:
- Choose Your Business Structure: Decide between an LLC (simpler and tax-efficient) or a C-Corporation (better for attracting investors).
- Pick a State: Delaware (investor-friendly) or Wyoming (low-cost and private) are top choices for international entrepreneurs.
- Get a Registered Agent: Appoint a local agent to handle legal documents and compliance.
- Reserve & Register Your Company Name: Ensure your business name complies with state rules and is available.
- File Formation Documents: Submit Articles of Incorporation (for corporations) or Articles of Organization (for LLCs) to the state.
- Apply for an EIN: Obtain a federal tax ID from the IRS to manage taxes and open a bank account.
- Open a US Bank Account: Separate personal and business finances by setting up a business account.
Each step requires specific documents and considerations, like choosing the right state for incorporation or ensuring compliance with tax obligations. With preparation, you can navigate the process and access the US's vast consumer market and business opportunities.
Open an LLC in the USA as a Non Resident (2025 Full Guide)
Step 1: Choose Your Business Structure
Picking the right business structure is a crucial first step when registering a company in the U.S. from abroad. The most common choices are Limited Liability Companies (LLCs) and C-Corporations, both of which offer limited liability protection, keeping your personal assets separate from business liabilities.
LLCs vs. C-Corporations
LLCs are popular among international entrepreneurs for their simplicity and flexibility. They use pass-through taxation, meaning the company's profits and losses are reported on the owners' personal tax returns, avoiding the double taxation that C-Corporations face. Additionally, LLCs come with fewer formal requirements - there’s no need for board meetings, annual shareholder meetings, or detailed corporate records.
However, LLCs might not be the best fit if you’re looking to attract professional investors. Many investors prefer structures like C-Corporations that don’t pass income and losses directly to owners. If raising capital is part of your plan, this is an important consideration.
C-Corporations, on the other hand, are better suited for businesses focused on growth. They can issue multiple classes of stock, have unlimited shareholders, and are generally more appealing to venture capitalists and other professional investors. They also offer tax perks, such as deductions for employee benefits like health insurance and retirement contributions. The downside? Double taxation. The company pays a 21% federal corporate income tax on profits, and shareholders are taxed again on dividends. For foreign shareholders, there’s an additional 30% withholding tax on dividends, though tax treaties can sometimes lower this rate.
| Feature | LLC | C-Corporation |
|---|---|---|
| Taxation | Pass-through (avoids double taxation) | Double taxation (21% corporate + dividend tax) |
| Investment Appeal | Limited investor interest | Attractive to professional investors |
| Operational Requirements | Minimal formalities | Board meetings, annual reports, formal records |
| Ownership Flexibility | Flexible membership structure | Unlimited shareholders, multiple share classes |
| Tax Deductions | Limited business deductions | Full employee benefit deductions |
Key Factors for Structure Selection
Your funding plans play a major role in this decision. If you’re self-funding or relying on private funding, an LLC offers simplicity and tax efficiency. But if you’re aiming for venture capital or rapid growth, a C-Corporation might be the better route.
Tax considerations also depend on your residency and type of business. For instance, e-commerce businesses with Effectively Connected Income (ECI) may find C-Corporations more tax-efficient. Foreign owners can also take profits as salaries from a C-Corporation, potentially reducing overall tax liabilities.
Think about your long-term goals as well. LLCs are often best for small or medium-sized businesses focused on steady growth, while C-Corporations are designed for companies planning multiple funding rounds or an eventual sale.
Compliance requirements are another factor. LLCs are easier to manage remotely, with fewer filing and operational formalities. In contrast, C-Corporations demand more detailed record-keeping and compliance efforts.
Ultimately, the right choice depends on your business model, growth plans, and personal circumstances. Consulting a qualified accountant with expertise in U.S. tax laws for international businesses is essential. Once you’ve decided on a structure, the next step is selecting the best state for incorporation.
Step 2: Pick Your State of Incorporation
Once you've decided on your business structure, the next step is choosing the state where you'll incorporate. While you can pick any U.S. state, Delaware and Wyoming are especially popular among non-U.S. founders due to their distinct benefits. Your choice will influence fees, taxes, legal protections, and even your company's growth trajectory. Did you know nearly 80% of U.S. public companies incorporate in Delaware? Meanwhile, Wyoming is a go-to for entrepreneurs who value privacy and low costs. Taking the time to understand these options now can save you money and headaches later.
Delaware vs. Wyoming Comparison
Delaware has long been known as the corporate hub of the U.S., and for good reason. Its specialized Court of Chancery handles business disputes efficiently without jury trials, creating a predictable legal environment. This is why over two-thirds of Fortune 500 companies are incorporated in Delaware. For international founders seeking to attract investors or raise capital, Delaware’s reputation can be a major advantage.
On the other hand, Wyoming focuses on privacy and affordability. It doesn’t require ownership details to be listed on formation documents, which keeps your information private. This level of confidentiality is particularly appealing to international entrepreneurs. Additionally, Wyoming has no state income tax, making it attractive for LLCs looking to reduce tax obligations.
| Feature | Delaware | Wyoming |
|---|---|---|
| Formation Costs | $110 | $100-$102 |
| Annual Fees | $300 franchise tax | $60 annual report fee |
| Privacy Protection | Moderate (some ownership info may be disclosed) | Very High (members not publicly listed) |
| Processing Time | 2-3 weeks standard, 24 hours expedited | 3-5 business days online |
| Tax on Non-U.S. Income | 0% | 0% |
| Investor Appeal | Very High (preferred by VCs) | Moderate |
Over time, the cost difference between the two states becomes noticeable. Delaware charges a $300 annual franchise tax, while Wyoming’s annual report fee is just $60. For startups on a tight budget, saving $240 a year can make a big difference.
Processing times also vary. Delaware’s standard filings take 2-3 weeks, whereas Wyoming processes online filings within 3-5 business days. However, Delaware offers expedited services for an additional fee if speed is a priority.
These distinctions are important as you prepare to meet state-specific compliance requirements, which we’ll explore next.
State Requirements for Non-Residents
Both Delaware and Wyoming allow foreign ownership without requiring residency. However, you’ll need to appoint a registered agent with a local address in the state. This agent will handle legal and official correspondence on your behalf. Hiring a registered agent service typically costs $100 to $300 per year, depending on the provider. The agent’s address can also serve as your business’s required U.S. address.
Wyoming offers a unique perk for international entrepreneurs: LLC owners can often open U.S. bank accounts remotely. Delaware doesn’t explicitly support remote banking, but you can explore alternatives like working with Electronic Money Institutions (EMIs).
Delaware has additional compliance requirements that may impact privacy. For example, certain disclosures are needed when dealing with banks or legal matters. Wyoming, by contrast, takes a more protective stance on privacy.
If your goal is to attract venture capital or institutional investors, Delaware’s corporate law framework and legal precedent are hard to beat. Its Court of Chancery has decades of business law decisions, offering predictability for complex corporate issues. Wyoming, with fewer legal precedents, may not provide the same level of certainty in legal disputes.
Ultimately, your decision should align with your business priorities. If privacy and cost savings are at the top of your list, Wyoming might be the better choice. However, if you’re aiming for investor trust and long-term growth, Delaware’s established reputation could make it worth the extra investment. For businesses planning to navigate legal complexities during expansion, Delaware’s Chancery Court may save both time and money.
Step 3: Get a Registered Agent
To legally operate your business, you'll need a registered agent with a physical address in your state. This agent acts as your business's official contact for handling legal documents, service of process, tax notices, annual report forms, and other government communications.
The registered agent must have a physical street address (P.O. boxes don’t qualify) in the state where your business is incorporated. They must also be available during standard business hours to promptly receive and manage documents. Missing important notifications could lead to fines, penalties, or legal complications.
You have a few options for selecting a registered agent: you can appoint an employee, a trusted local contact, or hire a commercial registered agent service. Commercial agents are often more dependable since they use dedicated systems and teams to ensure documents are received and forwarded efficiently.
When choosing a registered agent, prioritize reliability and responsiveness. Many professional services offer features like online portals and compliance alerts to streamline document management. Plus, using a commercial service keeps your personal address off public business records, adding a layer of privacy. Make sure the agent is authorized to operate in your state and follows strict confidentiality practices.
While professional services may involve a fee, they can save you time and reduce the risk of compliance mishaps. Some even provide multi-state representation, which can be a big advantage if you plan to expand your business in the future.
Before making a decision, research potential agents thoroughly. Look into their experience, technology, and customer reviews to ensure they meet your needs. Once your registered agent is in place, you’re ready to move forward with reserving and registering your company name.
Step 4: Reserve and Register Your Company Name
Picking the right name for your business isn't just about creativity - it’s about meeting state regulations and ensuring the name is legally available. Since your company name will appear on all official paperwork, getting it right from the start can save you a lot of trouble down the road.
To begin, conduct a thorough name search on your state’s Secretary of State website. Most states provide a free business entity database where you can check for any existing businesses with similar names. Look for terms like "business search", "business name search", or "business entity search" on the website. For example, Delaware uses the General Information Name Search, while Wyoming offers a search tool through its business entity database.
When searching, take advantage of filtering options like "starts with", "contains", or "exact match" to pinpoint any potential conflicts with existing business names.
Don’t forget to include the correct entity designation for your business type. For example, LLCs might require "LLC", "L.L.C.", or "Limited Liability Company", while corporations often use "Corp.", "Corporation", "Inc.", or "Incorporated." Each state has its own set of rules regarding acceptable designations, so double-check your state’s specific requirements.
Some words are restricted or prohibited unless you have special permissions. For instance, terms related to banking, insurance, or finance often require regulatory approval. Similarly, government-related terms like "FBI" or "Treasury" are generally not allowed. If your business operates in a professional field like medicine, law, or accounting, you may need to provide proof of licensing during the registration process.
If you’re not quite ready to file your formation documents, reserve your business name to ensure no one else claims it. Most states allow you to reserve a name for a set period, but these reservations do expire, so don’t delay completing your registration. Keep in mind that some states operate on a first-come, first-served basis when it comes to filing formation documents.
Watch out for common pitfalls that could hold up your registration. For instance, don’t assume that owning a matching domain name guarantees the business name is available for registration - these are separate systems. Also, state name searches typically only check your chosen name against businesses of the same entity type. For example, an LLC name search won’t flag conflicts with corporations.
Once you’ve confirmed your business name is available and complies with all state regulations, you’re ready to move forward. Reserving your name ensures no one else can claim it while you complete the next steps in the registration process. With your name secured, it’s time to prepare and file your formation documents.
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Step 5: File Your Formation Documents
Once your business name is reserved and validated, the next step is to officially form your company by filing the necessary paperwork. Depending on your business structure, you'll submit either the Articles of Incorporation (for corporations) or the Articles of Organization (for LLCs) to your state's Secretary of State. These documents act as the formal acknowledgment of your company's existence.
Many states now offer online filing through their official portals, which simplifies the process, even for those filing from outside the U.S. When completing your formation documents, you'll need to include key details like your business name, principal address, entity type, business purpose, and registered agent's information. For corporations, you'll also list directors or officers, while LLCs must specify whether the business will be managed by its members or a designated manager.
State Filing Requirements
Filing fees vary widely depending on the state. For LLCs, fees can range from $35 to $500, with the average hovering around $132. Overall, most business registration costs stay under $300. If you're forming a corporation, your Articles of Incorporation will also need to outline your stock structure, including the number of authorized shares, par value, and any stock classes. Additionally, many states require you to define the company's duration in your formation documents. Most businesses choose a "perpetual" duration, meaning the company will operate indefinitely.
Double-check your state's official website for the most up-to-date filing fees and requirements to avoid surprises during the submission process.
Filing Mistakes to Avoid
Mistakes in your formation documents can lead to delays or even rejection. Here are some common pitfalls and how to avoid them:
- Name Accuracy: Ensure your business name matches the one you reserved, including the appropriate designator (e.g., "LLC", "Inc.", or "Corp."). Even a minor typo can result in rejection.
- Signatures and Notarization: Most states require properly signed documents, and some may still need notarization. If you're filing from abroad, check if electronic signatures are accepted or if notarization through a U.S. consulate or embassy is necessary.
- Address Consistency: Make sure your registered agent's address aligns with state records and format your principal address to meet U.S. postal standards.
- Registered Agent Details: Confirm that your registered agent has agreed to serve and that their name and address are correctly listed.
- Allow Enough Time: Rushing can lead to errors. Take your time to review your documents, have someone else proofread them, and make copies before submission. Follow up promptly if you don't receive confirmation.
- Payment Accuracy: Double-check the filing fees and ensure you're using an approved payment method, such as a credit card, wire transfer, or certified check, to avoid processing delays.
Once your filing is approved, your company is officially established. Keep copies of all filed documents for future use, such as banking, tax filings, or other business needs. With this step complete, you're ready to move on to obtaining your federal tax ID.
Step 6: Apply for an Employer Identification Number (EIN)
Once your formation documents are filed, it’s time to establish your business’s tax identity. The next step is securing an EIN (Employer Identification Number) from the IRS. This nine-digit federal tax ID is essential for tasks like opening a business bank account, filing taxes, and hiring employees.
An EIN serves as official confirmation that your business complies with U.S. laws and regulations. It’s issued by the IRS after they verify your submitted documents. Banks in the U.S. also require an EIN to validate your business identity and meet regulatory requirements like Know Your Customer (KYC), Know Your Business (KYB), and Anti-Money Laundering (AML) laws. Additionally, both federal and state tax filings hinge on having this number.
Application Process for Non-U.S. Residents
If you’re a non-U.S. resident, you won’t be able to apply for an EIN online. Instead, you’ll need to submit Form SS-4 via fax or mail. While this method takes longer than the online process available to U.S. residents, it’s still manageable with proper preparation.
- Faxing the form: Typically takes 2–6 weeks.
- Mailing the form: Can take 4–8 weeks.
What You’ll Need for Form SS-4
When filling out Form SS-4, make sure to include the following details:
| Field | Description |
|---|---|
| Entity's legal name | The official name of your business as registered with the state. |
| Entity type | Your business structure (LLC, corporation, etc.) and related details. |
| Reason for applying | Why you need the EIN (e.g., starting a business, opening a bank account). |
| Responsible party | The individual who controls your company’s funds and assets. |
| Postal address | Your business address (international addresses are acceptable). |
| Principal business activity | The primary nature of your business and the services you provide. |
| Number of employees | The current or estimated number of employees within the next 12 months. |
If the responsible party doesn’t have an SSN or ITIN, leave that field blank.
How to Submit Your Form
You can send your completed Form SS-4 to the IRS using one of these methods:
- Fax: +1-855-641-6935 (for international applicants)
-
Mail:
Internal Revenue Service
Attn: EIN International Operation
Cincinnati, OH 45999, USA
Double-check your application for accuracy before submission to avoid delays.
Key Points to Remember
- The IRS doesn’t provide status updates on EIN applications, and calling won’t help you track your submission. Make sure your business mailing address is valid and accessible, as this is where the IRS will send your EIN confirmation.
- If you don’t have an SSN or ITIN, you may hire a U.S.-based agent to act on your behalf. They can also provide a registered U.S. address if needed.
Cost and Final Steps
Obtaining an EIN is completely free. Be cautious of third-party services that charge fees for this process - you can handle it directly with the IRS at no cost. To avoid rejections or delays, carefully review your Form SS-4 before submitting it.
Once you have your EIN, you’re ready to open a U.S. business bank account.
Step 7: Open a US Business Bank Account
Once you have your EIN, the next step is to open a U.S. business bank account. This account is crucial for managing your business finances, keeping personal and business expenses separate, and maintaining clear financial records. It also helps banks confirm your business identity.
What You’ll Need to Open an Account
Before heading to the bank, make sure you have the following documents ready:
- Photo ID of a company director (e.g., passport or driver’s license)
- Articles of incorporation/organization (your state filing documents)
- EIN confirmation letter from the IRS
- Proof of personal address for the company director
- Proof of business address (such as a registered agent’s address)
- Operating agreement or corporate bylaws
Some banks might also require a minimum opening deposit, so it’s a good idea to check with your chosen bank in advance.
In-Person vs. Remote Banking
Depending on your situation, you’ll need to decide between opening your account in person or remotely. Many traditional U.S. banks still require non-residents to visit a branch in person. If you’re planning a trip to the U.S., call ahead to schedule an appointment and confirm their document requirements. Look for branches experienced in working with non-resident clients to make the process smoother.
On the other hand, remote account opening is becoming more accessible. Some major banks and fintech companies now allow non-residents to open accounts online, though the exact requirements will depend on the institution and your specific circumstances.
Comparing Traditional Banks and Fintech Options
When choosing between traditional banks and fintech platforms, weigh the pros and cons of each:
- Traditional Banks: These institutions offer full-service, FDIC-insured accounts but often have stricter requirements for non-residents. They may require an in-person visit and charge higher fees for international transactions, typically 2.5%–3% above interbank rates for currency exchanges.
- Fintech Solutions: Online banks and fintech platforms often make the process easier with fully digital applications and fewer documentation requirements. Many also offer lower foreign exchange fees, sometimes as low as 0.5%–1% above interbank rates.
Keep an eye on monthly fees, transaction costs, wire transfer fees, and customer service options when deciding which is the best fit for your business.
Tips for a Smooth Process
Opening a business bank account as a non-resident can be challenging, so preparation is essential. Contact multiple banks to discuss their specific policies and requirements for non-U.S. residents. If you don’t have a physical U.S. address, consider using a virtual office service, which can provide you with a business address and necessary documents like a lease agreement.
Getting Professional Help
If the process feels overwhelming, you can hire professionals who specialize in international banking. These experts can help you navigate the varying requirements of different banks and streamline the approval process. While their services come with additional fees, they can save you time and reduce hassle. Once your bank account is set up, you’ll be one step closer to running your U.S. business smoothly.
Ongoing Compliance Requirements
Once your U.S. company is up and running, staying compliant is not a one-time task - it’s an ongoing responsibility. Federal and state compliance measures are essential to avoid penalties, maintain good standing, and protect your business from potential dissolution.
Federal Tax Obligations
After forming your company, federal compliance becomes a recurring task. The IRS requires different filings based on your business structure:
- Single-member LLCs: Must file Form 5472 along with a Pro-Forma 1120 annually. Missing the filing deadline for Form 5472 can result in a hefty $25,000 penalty.
- Multi-member LLCs: Need to file Form 1065 and its associated schedules. Delays in filing Form 1065 can cost $205 per month for each partner.
- Foreign bank accounts: If your company holds non-U.S. bank accounts exceeding $10,000, you’re required to file an FBAR (Foreign Bank Account Report).
- U.S. source income: In cases where your company has U.S. source income, you may also need to file Form 1040-NR.
State-Level Compliance
Your state of incorporation imposes its own requirements, including annual reports and franchise tax filings. These reports are typically submitted to the Secretary of State, and franchise taxes vary by state. Additionally, maintaining a registered agent is mandatory. Registered agent services usually cost between $100 and $250 annually.
Corporate Transparency Act Requirements
The Corporate Transparency Act (CTA) introduces additional compliance requirements, particularly for companies with non-U.S. ownership. Filing deadlines depend on when your company was formed:
- Companies formed before 2024 must file by January 1, 2025.
- Companies formed in 2024 have 90 days to file.
- Companies formed after January 1, 2025, must file within 30 days of registration.
Keeping Your Information Current
Accurate and up-to-date business information is crucial. If you change your registered agent, you must file this update with the state, which may involve fees. Similarly, notify banks, insurers, and other relevant parties of any address or contact changes. Assign someone to manage these updates and ensure all communications are handled promptly.
Consequences of Non-Compliance
Falling behind on compliance can have serious consequences. Beyond financial penalties, your company could face administrative dissolution, loss of legal protections, or even piercing of the corporate veil, which could put your personal assets at risk. Non-compliance might also trigger audits, leading to operational disruptions and reputational damage.
Sales Tax Considerations
If your business sells taxable products or services, you’ll need to secure sales tax permits and regularly remit collected taxes. These obligations depend on your business activities and where your customers are located, as determined by state economic nexus rules.
Staying compliant demands vigilance. Regularly review your filings, update internal records, and consult with experts who understand the nuances of international business structures. This proactive approach ensures you meet all your federal and state responsibilities while managing your tax obligations efficiently and legally.
Conclusion
Starting a US company from abroad involves seven key steps that can unlock opportunities in the vibrant US market. From selecting the right business structure to opening a US bank account, each step is crucial in laying the groundwork for your American business journey.
It’s important to stay on top of deadlines and ensure all paperwork is complete. Missing any of these can lead to delays and penalties. However, tackling these challenges is well worth the effort. For example, a tech entrepreneur successfully entered the US market by seeking professional help with state selection, registered agent services, and remote filings. One of the trickiest hurdles - opening a US bank account - can be managed with the right documentation and expert advice.
With millions of new business applications filed in the US every year, it’s clear why so many entrepreneurs are drawn to the country. Its business-friendly policies, access to capital, and strong global reputation make the effort to register a business worthwhile, even with the complexities involved.
For those looking for a streamlined process, USFormation offers a comprehensive package for $399. This includes state registration, registered agent services, a virtual business address, assistance with opening a bank account, and lifetime support.
Preparation is key to success. As highlighted in the compliance section, gathering all necessary documents, meeting state-specific requirements, and setting up compliance systems are essential steps. Investing in proper setup and professional guidance can lead to smoother operations, legal protection, and expanded opportunities for your US-based business.
FAQs
What’s the difference between forming an LLC and a C-Corporation as a non-resident entrepreneur?
For entrepreneurs based outside the U.S., understanding the difference between a Limited Liability Company (LLC) and a C-Corporation is crucial when deciding how to structure your business. These two options differ in terms of management, taxation, and how well they align with your long-term goals.
An LLC is known for its straightforward management and pass-through taxation. This means the company's profits are taxed only once - at the individual level - making it a simpler and often more cost-effective choice for small to medium-sized businesses. If you're looking to avoid the complexities of double taxation, an LLC might be the better fit.
A C-Corporation, however, operates under a more traditional framework, with shareholders, directors, and officers. This structure is particularly appealing for businesses focused on growth. Why? It allows for reinvesting profits and issuing shares, which can help attract investors or venture capital. While it does involve double taxation - once at the corporate level and again on dividends - its ability to scale makes it a popular option for larger, growth-driven companies.
Both LLCs and C-Corporations can be owned by non-residents, but if you're planning to scale quickly or seek external funding, a C-Corporation might align better with your goals. Ultimately, your decision should reflect your business strategy, growth ambitions, and tax considerations.
What factors should I consider when choosing the best state to register my US company?
When choosing where to register your US company, it's important to weigh factors like tax benefits, privacy laws, and the business climate of the state. Take Delaware, for instance. It's a favorite for larger corporations due to its pro-business legal framework and specialized court system. Meanwhile, Wyoming and Nevada appeal to small business owners with their low fees, robust privacy protections, and tax-friendly policies.
Consider your company’s specific needs. Are you planning to operate in one state, or do you need flexibility across the country? Also, some states offer lower ongoing compliance costs, which can be especially appealing for startups and international entrepreneurs. Assess these elements carefully to align your choice with your business objectives.
What challenges do non-US residents face when opening a US business bank account, and how can they address them?
Non-US residents often face hurdles when trying to open a US business bank account. For starters, most banks require a valid passport for identification, as national IDs are typically not accepted. Additionally, you’ll need to establish a US business entity - such as an LLC or corporation - before you can proceed. Another common roadblock is that some banks insist on the account holder being physically present in the United States, which isn’t always feasible for international entrepreneurs.
To navigate these challenges, it’s crucial to have the right documents ready. This includes your Articles of Incorporation, EIN confirmation letter, and proof of address. Fortunately, some financial institutions, particularly online banks, allow for remote account opening, removing the need for in-person visits. By preparing thoroughly and selecting a banking option that suits your circumstances, non-residents can successfully open a US business bank account and keep their operations running smoothly.