There are plenty of reasons why a non-U.S. resident may want to establish a limited liability company (LLC). LLCs offer more than just liability protection: For starters, they give international business owners access to the U.S. market, more favorable tax treatment, and a more flexible management structure.
However, just because you can open an LLC in the U.S. doesn’t mean the process isn’t intimidating the first time.
Below, we’ll walk you through how non-residents can open LLCs in the U.S. and a few resources that can streamline the process to minimize compliance risk.
The first (and arguably most important) step of the creation process is choosing a state to establish your company in, like California, New York, or Texas. Your chosen state’s regulations impact multiple moving parts of your LLC’s creation, including:
In the following sections, we’ll highlight a few of the top states for establishing an LLC as a non-resident.
Delaware’s biggest asset is its business-friendly attitude. More than 60% of Fortune 500s made their home in Delaware, largely thanks to the state’s convenient and flexible tax obligations, and predictable court systems.
For example, the state doesn’t collect corporate taxes from LLCs formed in Delaware if the company doesn’t conduct business in the state. The State of Delaware also doesn’t tax royalty payments or intangible assets, such as patents, patent applications, or trademarks.
If you’re a foreign business owner, investors are more likely to fund your enterprise if you register in Delaware. With more capital, you can hire employees in the U.S., increase your marketing budget, and scale your operations.
Wyoming LLCs benefit from some of the nation’s lowest taxes and fees. It’s one of a handful of states with no corporate or personal income tax; business owners will need to pay federal income taxes, but will only need to pay an annual licensing fee plus the sales and use tax (which is currently 4%).
And, much like Delaware, the state offers business owners protection from creditors, so they can retain more assets. With no income or franchise tax in the state, business owners have more capital to expand into new markets.
Wyoming also offers privacy protections to businesses. For example, the state does not require a list of all managers and members, making the filing process fast and simple. So if one of the LLC’s partners leaves or the shareholder structure changes, business owners don’t have to worry about compliance violations.
In Nevada, the business formation process requires very few forms to successfully complete: the Articles of Incorporation, and the Annual List of Managers. You aren’t required to complete an Operating Agreement, though it’s still highly recommended as a proactive compliance measure.
Similar to Wyoming, you won’t pay corporate, personal, or franchise tax in Nevada. Like Delaware, Nevada is a popular choice for non-resident entrepreneurs due to its business-friendly tax regulations.
Your LLC’s name is an undeniably important part of your brand, but it’s also one of the most frustrating tasks of opening a business. Because business name availability varies by state, you’ll first need to first check that your name is available.
Before you name your LLC, you’ll also need to research the state’s naming conventions. For example, some states restrict the use of symbols or punctuation marks, while others forbid the use of certain words or slogans.
Keep in mind that if your business name isn’t available, you can explore a Doing Business As (DBA) name. This option allows businesses to operate under a different name than their official title. Keep in mind that your state may require you to include “LLC” in your business name (either as an abbreviation or spelled out).
While there are some business operations you can handle using a P.O. Box, it’s best to establish a physical, local address for your LLC. Not only will it be necessary when you’re setting up your banking (more on this later), but it can help establish credibility and customer trust early on.
Although paying monthly for a coworking space may give you a physical address, it’s not the most logical or cost-effective solution for a non-resident — especially if you don’t have employees in the States. Instead, it makes more sense to invest in a virtual mailbox that offers a permanent business address for your LLC.
Most virtual mailbox providers also offer scanning and storage services, digitizing important documents for later review or forwarding them to you for signatures and record-keeping as requested. These services are not only more affordable than coworking spaces but also generally more efficient.
Here’s how to establish a virtual business address:
Before you set up a virtual address, it’s important to double-check the state’s location requirements. You’ll also need to file specific paperwork, including USPS Form 1583, to grant permission to a third party to handle your mail. Services like Stable complete and notarize these forms for you, leaving one less task on your plate.
A registered agent accepts and handles business mail on an organization’s behalf. This can include anything from tax notifications to citations, and it’s a must for companies operating abroad. If mail requires prompt follow-up, such as a signature, the registered agent service directs all time-sensitive documents to the appropriate party.
Every state has its own registered agent requirements. You can find dedicated registered agent services, including legal services or lawyers, or you can work with a virtual mailbox provider that provides registered agent services, like Stable.
LLC formation documents vary by state. Here’s what to keep in mind as you sort through the line items:
If you have questions about a state’s rules for non-citizens, you can find its specifications via the secretary of state’s website.
An EIN identifies a business to the IRS, and it’s typically required for LLCs. The IRS officially lists all scenarios where you’ll need an EIN, but generally speaking, it’s required if you have any employees or plan to operate as either a corporation or partnership.
The EIN application doesn’t require a Social Security number (SSN). However, you must disclose the name and Individual Taxpayer Identification Number (ITIN) of the company’s responsible party (e.g., owner, general partner, etc.). If you download the necessary Form SS-4 and mail or fax it in, expect it to take around a month for approval.
Tip: Note that EINs are free, so beware if anyone tries to charge a fee to file for one; this is a red flag and could indicate a scam.
Opening a U.S. business bank account can be tricky for a non-resident LLC. You may need to be more vigilant about both the selection process and the terms and conditions of each account option.
Larger U.S. companies, such as Bank of America or Wells Fargo, usually have more expertise when working with business owners abroad. What’s more, they may not require an in-person visit to the branch.
To open a bank account, you’ll typically need your LLC’s formation documents, EIN confirmation, and operating agreement. You may also need a U.S. business address (not a P.O. Box), your passport, and foreign residency proof. Using a virtual business address via a service like Stable can make it easier for non-residents to establish a legal, physical location for their LLCs.
Local bank accounts, even those run by international conglomerates, are handy for business owners who handle U.S. revenue. From wire transfers to direct deposits, a local bank account cuts back on unnecessary hassles so you can properly manage your finances. Not only can you potentially avoid international transfer hitches (which may tie up your money for days), but you can also establish a stronger local presence for your LLC.
Compliance regulations, including tax laws, are always subject to change. If you miss a notification, from either your state’s government or local regulatory departments, you can easily violate new or changed laws that you weren’t even aware of.
For the most up-to-date information, regularly check the secretary of state’s site for the state you choose to open your LLC. If your business is in a highly regulated industry (like food and beverage or healthcare), you’ll also want to closely monitor any relevant regulatory body’s website to ensure you’re meeting all compliance requirements.
Using a registered agent can help maintain compliance long after you’ve set up an LLC abroad. Because they’re your go-between between the government, regulatory bodies, and your business, they can help direct correspondence quickly and efficiently so you can avoid delays — and penalties and violation fines.
If you’re a non-resident, setting up and managing an LLC in the U.S. is undeniably more challenging. Not only is it harder to manage affairs if you aren’t physically present, you also have to figure out workarounds for everything from customer perception to paperwork.
At Stable, we offer virtual mailroom and registered agent services for business owners operating from abroad. Whether you need mail scanning, storage, shredding, check depositing, or API integrations, we can assume responsibility for a major portion of your business so you can focus on more important matters.
If you’re ready to set up your LLC in the U.S., partner with Stable today!
