A limited liability company – or LLC – is a flexible business structure that shields its owners (called “members”) from personal liability. It’s become especially popular with foreign entrepreneurs, as US LLC non-residents can form one without needing a green card or even setting foot in the States.
LLCs offer the following benefits:
Limited personal liability – your assets stay protected
Pass-through taxation – no double taxation headaches
Global access – open bank accounts, receive US payments, build investor trust
Who is this guide for?
Non-US residents running e-commerce or online businesses that sell to US customers
Tech or SaaS founders looking to get a foothold in the US market
Entrepreneurs interested in using an LLC for consulting work or holding US-based assets
If you’re a foreign national earning US-sourced income, understanding how — and just as importantly why — to set up an LLC is crucial. In this article, we’ll cover everything you need to know.
Can a non-US-resident own an LLC?
Foreign business owners and entrepreneurs often ask two important questions:
Can a foreign person own a US LLC?
Can a non-US citizen form an LLC?
The answer to both is yes – and it may be one of the smartest moves a global business owner can make. A US LLC for non-residents offers access to the US market, stronger credibility, and the chance to attract investors – all without living in the country.
In 2026, forming a non-resident LLC is fully legal and more accessible than ever. Whether you're selling online or launching a consulting firm, an LLC gives you flexibility, liability protection, and a path to scale.
The key is understanding your filing duties, IRS requirements, and 2026 rules around Beneficial Ownership Information (BOI) reporting – which apply even if you live abroad. In 2025, FinCEN announced that US-created entities are exempt from BOI reporting. Foreign reporting companies, on the other hand, may still have BOI obligations and deadlines under the Corporate Transparency Act.
What triggers US tax? If you are a non-US resident and own an LLC, your business may have US tax obligations if it:
Conducts a US trade or business
Earns US-sourced FDAP income — such as interest, dividends, or royalties
Employs people in the US
Has inventory or warehouses in the US
What is the legal basis?
There are no federal laws that block foreigners from forming a US LLC. The IRS and state governments allow non-residents to create and manage LLCs remotely. What matters most is your income source, your structure, and whether your LLC has a US trade or business.
Federal vs state rules to understand:
LLCs are created under state law, not federal law, and rules vary from state to state
The IRS taxes LLCs based on how they are classified — disregarded entity, partnership, or corporation
Compliance is shared — states handle registration and annual filings, federal authorities cover tax reporting
LLC formation and tax residency
Another important factor to understand is that forming an LLC in the US doesn’t automatically make you a tax resident. Rather, your tax residency and obligations depend on factors such as:
Where your business income is sourced
Whether your LLC is engaged in a US trade or business
Who qualifies for US LLC formation?
Non-residents who qualify to form a US LLC include:
Non-residents with no US citizenship or visa
E-commerce sellers and freelancers abroad
Residents of countries without US tax treaties*
Business owners investing in US-based assets
Startups planning to pitch US investors
Foreign founders without a US office
*Countries without US tax treaties do not affect eligibility to form an LLC. However, there may be country-specific rules in place that influence withholding and tax reporting on certain types of US-sourced income.
NOTE! Qualifying to form an LLC doesn’t mean you automatically owe US tax. Your tax obligations should be assessed on an individual basis, ideally with the help of a tax professional.
Common misconceptions non-residents have
Non-US residents often have misconceptions about forming and running an LLC in the US. Below, we’ll bust some of the most common myths.
“If I’m outside the US, I won’t have any US filings.” Reality: Your filing obligations depend on factors such as your US-sourced income, whether your LLC conducts a US trade or business, and reporting rules — not your location.
“I need an ITIN/SSN to form an LLC.” Reality: You can form an LLC without an ITIN or SSN. However, you may still need an EIN for banking and federal filings.
“A foreign-owned single-member LLC with zero US-sourced income has no filing obligations.” Reality: You may still have reporting obligations — such as Form 5472 + pro-forma Form 1120 — even if your LLC has no income.
“An LLC always pays US income tax.” Reality: An LLC is a legal wrapper. Whether or not it owes income tax depends on its classification — disregarded, partnership, or corporation — and where its income is sourced.
“Delaware or Wyoming are always the best states to establish an LLC.” Reality: The “best” state depends on where you actually operate, where you need to register, and ongoing costs and compliance.
“A registered agent is optional.” Reality: Most states require a registered agent and address to maintain good standing.
“US banking is straightforward for non-residents.” Reality: Banks and payment processors follow strict KYC/AML rules and may require you to provide extra documents or carry out in-person steps.
“BOI reporting applies to every new US LLC.” Reality: BOI rules changed in 2025. Now, many US-formed entities are exempt, while some foreign reporting companies may still have BOI reporting obligations.
Which US state is best for setting up an LLC for non-US residents?
Many foreign entrepreneurs ask the same foundational question – which state is best for LLC for non-residents? While there’s no one-size-fits-all answer, choosing the right state can significantly affect tax obligations, privacy protections, and business growth. As an owner of a US LLC, your decision can impact everything from investor interest to annual compliance burdens.
Let’s break down the top three states for forming an LLC as a non-resident in 2026 – each with its own advantages and trade-offs.
Delaware
Over 66% of Fortune 500 companies are registered in Delaware – a testament to its reputation for business-friendly laws. With a sophisticated Court of Chancery and strong investor preference, Delaware remains a premier destination for LLCs targeting capital.
Delaware offers a respected legal framework, strong investor preference, and the benefit of not requiring public disclosure of member names. Annual compliance is relatively straightforward — there’s a $300 franchise tax due by June 1, and no requirement to file an annual report.
On the flip side, setting up an LLC in Delaware also comes with higher annual franchise taxes, more complex compliance for smaller LLCs, and a requirement to maintain a Delaware-based registered agent.
Wyoming
As of 2026, Wyoming continues to offer the most affordable LLC structure in the US. It’s known for low startup and annual fees, anonymous filings, and zero state income tax – ideal for non-resident aliens running online businesses or crypto ventures. However, investors may prefer Delaware, and you might need to register elsewhere if you operate physically in another state.
In Wyoming, the annual report is due on the first day of your anniversary month. So, if you set up your LLC in June 2025, the report will be due June 1, 2026.
While Wyoming is cost-effective, investors may prefer Delaware. In addition, you may need to register in another state if you operate physically elsewhere.
Florida
Florida ranked among the top five states for new business formations in 2024, with non-residents increasingly drawn to its pro-entrepreneur policies and large consumer base. It offers no personal state income tax and streamlined registration – a major plus for online or service-driven businesses.
In Florida, the annual report fee is $138.75 and is due by May 1, rising to $538 if filed after July 1. Despite being a popular choice for LLC formation for non-US residents, Florida requires in-state presence. It also has layered regulatory rules and mandates annual reports and fees, which can create extra admin for non-resident aliens.
Delaware (DE)
Wyoming (WY)
New Mexico (NM)
Florida (FL)
Best for
US-facing brands looking for legal predictability — often paired with a DE C-Corp when raising VC.
Lean online businesses, thanks to low ongoing administration.
Privacy-first, low-maintenance holdings or operations.
Businesses with operations, contractors, and customers in Florida.
Privacy
Medium — certificate doesn’t list members or managers.
High — popular with firms seeking privacy and asset protection.
High — often marketed as “anonymous-ish”.
Standard — not privacy-focused.
Investor preference
High for VC structures — usually C-Corp, not LLC.
Low-to-medium.
Low.
Medium — operating companies, not VC signalling.
Formation fee
$110 state filing fee.
$100 — paid to WY SOS.
Approximately $50.
$125 total, including Articles and RA fee.
Annual compliance
$300 tax due each year on June 1. No annual report for LLCs.
Minimum $60 for annual report/license (assets-based).
Generally no annual report.
Annual report is $138.75 before May 1 and $538.74 after.
Foreign qualification
High if you operate elsewhere.
High if you operate elsewhere.
High if you operate elsewhere.
Lower if you operate in Florida.
Factors to consider when choosing
Business model alignment – Some states are ideal for online ventures, while others are better suited for brick-and-mortar or investor-backed companies.
Long-term tax exposure – LLC members must account for both federal and state-level taxes – including potential franchise or gross receipts taxes.
Privacy requirements – If privacy is a priority, consider whether your state requires public disclosure of owners or members.
Maintenance obligations – States differ in their annual filing requirements, registered agent rules, and reporting responsibilities.
NOTE! Where you actually operate matters more than where you file. Even if you register in Delaware, for example, your tax reporting obligations and registration requirements may follow the state your business actually operates.
How to open a US bank account for your LLC
1. Collect your formation and ID documents
Before you apply to open a US bank account, you’ll need to gather all the documents you’ll need for KYC and AML checks, including:
Stamped Articles of Organization
EIN confirmation letter
BOI confirmation (if applicable)
Passports of all beneficial owners
Proof of address for owners or managers
Operating Agreement
Information about source of funds — i.e. how your business earns and receives money
2. Choose a bank or fintech with remote onboarding
Platforms like Mercury, Relay, and Wise support a fully online setup for non-residents, while big banks may require in-person visits or US addresses. If you need physical banking tools, look for providers that accept Remote Online Notarization (RON) in 2025. Features, requirements, and availability vary widely, so be sure to check eligibility before applying.
3. Complete KYC and fund the account
Upload your documents, pass video verification, and declare all LLC members during onboarding. To activate the account, wire a small test deposit (usually $50-$100) and save your first statement for tax proof.
Why forming a US LLC is a smart move for foreigners
Setting up a US LLC can bring clear advantages for non-residents, but it also comes with additional complexity and ongoing obligations. Understanding both sides of the story can help you make a well-informed decision about whether a US LLC is the right model for your business. Benefits:
Limited liability protection
Setting up a US LLC as a non-resident gives you built-in limited liability protection – your personal assets stay safe even if your business runs into legal trouble. This makes it easier for any business owner abroad to operate confidently within the American market.
Direct access to the US market
As a non-resident LLC owner, you can sell directly to US customers – no middlemen, no barriers. This streamlined access helps you build stronger relationships and scale faster.
Flexible, pass-through taxation
Unlike a corporation, an LLC benefits from pass-through taxation, which means profits go directly to the member’s personal tax return – no corporate-level taxes. This simplifies tax reporting for any non-US resident who’s managing their business remotely.
Key trade-offs
Ongoing compliance and reporting. Your LLC may have IRS filing obligations — even if you don’t turn a profit. This can surprise non-resident owners who assume that zero income means zero paperwork.
Withholding and payment complexity. Certain types of US-sourced income may be subject to withholding. On top of this, banks and payment processors may require additional documentation from foreign owners.
State-level filing obligations. In addition to federal rules, you may have to file annual reports, pay fees, and complete registrations at the state level. This is especially true if your business operates, employs people, or holds inventory in a specific state.
A step-by-step guide: How to register an LLC as a non-US citizen
Whether you're an e-commerce seller or global consultant, forming a US LLC for non-residents can unlock market access, banking, and legal protections without requiring citizenship or a green card.
Step 1 – choose your state
Delaware, Wyoming, and Nevada remain the top picks in 2026. Wyoming leads for low fees and privacy, while Delaware offers strong legal backing for startups and investors.
Typical timeline: Same day
What you’ll be asked for:
Your intended business activities
Where you expect to operate or have customers
Whether you plan to seek US investment
Step 2 – pick a unique name
Each state requires a unique LLC name with LLC or Limited Liability Company at the end. Before you register, confirm the name is available via the Secretary of State's website.
Typical timeline: Same day
What you’ll be asked for:
Your proposed LLC name
Backup name options — in case your first choice is unavailable
Step 3 – appoint a registered agent
You must designate a registered agent with a physical address in your LLC’s state. Services cost as little as $49/year and are essential for receiving official legal documents.
Typical timeline: Same day
What you’ll be asked for:
The name and address of your registered agent
Confirmation of your agent’s consent
Step 4 – file Articles of Organization
This is the legal formation document filed with the state. LLC filing fees in 2026 range from $50 to over $500 depending on the state, and processing takes from 1 to 15 days.
Typical timeline: 1-15 business days, depending on the state
What you’ll be asked for:
LLC name
Details of your registered agent
Business address
Member or manager structure
Step 5 – draft an Operating Agreement
Not legally required in most states, but vital if your non-resident LLC has more than one member. It outlines internal rules and reduces future disputes between owners.
Typical timeline: 1-2 days
What you’ll be asked for:
Member ownership percentages
Management structure
Voting and profit-sharing rules
Step 6 – apply for an Employer Identification Number (EIN)
All non-US resident LLCs need an EIN to pay taxes and open bank accounts. You can apply directly through the IRS using Form SS-4, even without a Social Security number.
Typical timeline: Several days to a few weeks by tax or mail, faster with third-party assistance
What you’ll be asked for:
Passport details
LLC formation documents
Responsible party information
Step 7 – open a US business bank account
Traditional banks require in-person verification, but fintechs like Wise and Mercury offer remote setups for foreigners opening an LLC in the US. You'll need your EIN and formation docs.
Typical timeline: 1-14 days
What you’ll be asked for:
EIN confirmation
Articles of Organization
Operating Agreement
Passport and proof of address
LLC taxation for non-US residents: How is a foreign LLC taxed in the US?
Understanding foreign owned US LLC taxation is critical before you form your company. In this section, we’ll cover everything you need to know about tax treatment for LLCs.
Federal tax responsibilities
A non-resident alien with a US LLC typically reports income on Form 1040-NR, due April 15 (or June 15 if no wages) for income earned during the previous tax year. You can get an automatic six-month extension to file Form 1040-NR by submitting Form 4868 by the return’s due date—this typically extends the filing deadline to October 15 (or December 15 if your original due date is June 15).
Foreign-owned, single-member LLCs must also file Form 5472 with a pro-forma 1120 — even if the LLC had no income — or face a minimum failure-to-file penalty of $25,000 per Form 5472 (with additional $25,000 penalties possible if noncompliance continues after IRS notice) for returns required to be filed in 2026, with additional penalties for continued non-compliance.
If an LLC elects to be treated as a corporation, it is subject to a 21% flat rate and possibly double taxation. These forms require accurate EIN info and transaction records sent by mail or fax.
Good news for remote filers: the IRS will continue accepting digital signatures on Form 8453, 8878, and 8879 series returns during the 2026 tax season, so non-US residents can finalize LLC filings without wet-ink hassles.
ECI vs FDAP — and why this distinction matters
Non-resident LLC owners are typically taxed under one of two income categories:
Effectively connected income (ECI) — income connected to a US trade or business
Fixed, determinable, annual, or periodic income (FDAP) — such as interest, dividends, or royalties
Determining which category your income will be taxed under is crucial to remaining compliant. Here are some key differences and factors to understand:
ECI is taxed at progressive US tax rates and reported on Form 1040-NR
FDAP is generally subject to 30% withholding at source, unless reduced by a tax treaty
ECI usually requires an annual tax return
FDAP may be fully taxed through withholding, even without a return
Withholding forms such as W-8BEN or W-8BEN-E are commonly required for FDAP income
Misclassifying income can result in incorrect withholding or missed filing obligations
Some states like Wyoming have no personal or corporate income tax, making them ideal for a member seeking low costs. Others, like California, charge an $800 franchise tax, due on the 15th day of the fourth month, even for inactive LLCs.
Delaware, Wyoming, and Florida each have annual compliance requirements:
Delaware — annual tax of $300 due June 1, with no annual report required for LLCs
Wyoming — annual report due on the first day of the anniversary month, $60 minimum
Florida — annual report fee due by May 1, with additional fees for late payment
If your LLC earns income in a different state (e.g., New York, Texas) than where it’s registered, that state may still tax it. In some cases, you may be required to register in the state where your business is active. Choosing where a foreign-owned LLC registers can greatly affect ongoing tax and compliance burdens.
Additionally, so-called “sales tax nexus” rules may require you to collect and remit sales tax in states where your LLC has employees, inventory, or other connections.
Required filings
Filing
2026 due date / trigger
How to file
Key attachments
Late-filing penalty
Form 5472 + pro-forma 1120
April 15, 2026 for 2025 tax year.
Use Form 7004 for a six-month extension.
Paper mail or fax to IRS Ogden (cannot e-file).
Copy of LLC’s EIN letter and a transaction schedule.
$25,000 per Form 5472 for late filing + an additional $25,000 penalty if non-compliance continues after notice.
Form 1040-NR (each foreign individual owner)
April 15, 2026 if wages withheld.
June 15, 2026 otherwise.
Extension to October 15, 2026 with Form 4868.
E-file or mail to IRS Austin.
Schedule NEC for passive income.
Failure-to-file = 5% of tax due per month (max 25%). Interest accrues from April 15, 2026.
BOI reporting is no longer required for US-formed LLCs.
Foreign entities registered in the US may still have BOI reporting obligations, with a deadline of 30 days after registration is confirmed.
Upload on FinCEN’s secure BOI portal.
Photo ID details for each beneficial owner ( 25% control).
Civil fine $591 per day (indexed) plus up to $10,000 and/or two years in jail for willful violations.
NOTE! The inflation-adjusted minimum failure-to-file penalty rises to $525 for returns over 60 days late in 2025 – up from $510 in 2024.
Importance of bookkeeping and professional advice
Accurate, real-time books help a business owner defend the effectively connected position and avoid double taxation.
Clean ledgers make the annual BOI update, Form 5472 schedule, and any state audits almost plug-and-play.
Engaging an expat-focused CPA or EA ensures every member gets treaty benefits, timely extensions, and penalty relief where available.
Is an LLC the best option for you?
When deciding on the right business structure, non-US residents often compare the LLC model with other common options. Each structure comes with different responsibilities, liabilities, and tax treatments – and it’s essential to understand what fits your goals best. Below, we’ll break down the key alternatives and how they stack up against forming an LLC.
Corporation (C-Corp)
A C-Corp is a separate legal entity that pays taxes at the corporate level. Profits are then taxed again when distributed to shareholders – this is known as double taxation.
In contrast, an LLC offers pass-through taxation, meaning the owner of a US LLC can avoid being taxed twice on the same income. That said, an LLC can also elect to be taxed as a corporation, if that better fits your funding or reinvestment goals.
Sole proprietorship
This is the simplest and most informal business structure – it's just you and your business, with no legal separation. However, if the business is sued or incurs debt, your personal assets are on the line.
An LLC creates a legal wall between your business and personal finances, which is especially important for a non-US resident operating in unfamiliar regulatory terrain. NOTE! A true sole proprietorship isn’t available for non-US entity formation. Conceptually, however, it’s similar to a single-member LLC for solo operators.
Limited Liability Partnership (LLP)
LLPs offer flexibility and shared ownership but are typically limited to professional services like law or accounting. While LLPs also offer liability protection, they often come with more ownership restrictions and state-specific limitations.
An LLC, on the other hand, is more accessible and offers broader applicability across industries and states – making it a more adaptable fit for non-US residents.
How to make the right decision:
If you want investors (VC/angels) → usually a Delaware C-Corp (or an LLC that quickly converts). Investors expect a share structure, clean cap table, and standard documents.
If you’re doing simple consulting/solo services → a single-member LLC (SMLLC) is often the simplest legal wrapper. You can then evaluate whether you’ll have US tax filing/reporting based on where the work is performed and income sourcing.
If you have multiple founders/partners → start with a multi-member LLC (partnership by default) or consider a corporate tax election if you need clearer profit splits, reinvestment planning, or a future funding path.
If you plan to reinvest profits and pay yourself later → an LLC taxed as a C-Corp can make sense in some cases, but it comes with a different compliance footprint.
If you’re thinking “S-Corp for tax savings” → pause: non-resident alien owners generally can’t be S-Corp shareholders, so it’s usually not available for true non-resident-owned structures.
If you’re weighing these structures and your eyes are glazing over, you’re not alone. Business formation choices are foundational – this is the moment to speak with an expert and get clear direction before you commit.
Need guidance? Talk to a US tax advisor today
Setting up your business structure from abroad can be daunting, especially with evolving rules like BOIR filings and Form 5472 penalties. Whether you're launching an LLC or still exploring your options, having the right guidance ensures you stay compliant and avoid costly errors. Our specialists can always help you so that you can meet the requirements of tax compliance.
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The short answer is yes. As a foreigner, you can open an LLC in the USA without being a US citizen or resident.
Can I open an LLC without coming to the US?
Yes – non-US residents can form an LLC entirely online. You’ll just need a registered agent with a US address to handle official documents.
Do I need a US address?
You don’t need to personally live in the US, but your LLC must have a registered agent with a physical address in the state where it’s formed.
How long does it take to form an LLC?
Most states process LLC filings within a week – even faster if you pay for expedited service. Getting your EIN from the IRS can take a few days longer if you don’t have a Social Security number.
Do I need an ITIN?
No, you do not need an ITIN or SSN to form a US LLC. That said, you may still need an EIN to open a bank account, file taxes, or handle other business obligations.
Do I need to file Form 5472 if my LLC has no income?
Yes. Foreign-owned single-member LLCs generally must file Form 5472 with a pro-forma 1120 even if the LLC has no income. Failure to do so can trigger late-filing penalties.
Can I avoid US tax if all my clients are outside the US?
Possibly. US taxation depends on whether your LLC has effectively connected income (ECI) or US-sourced FDAP income. If your business’s activity and income are outside the US, your LLC may not owe US federal tax. Reporting obligations could still apply, however.
Do I need to file a BOI report?
It depends. US-created LLCs are now generally exempt from BOI reporting. Foreign reporting companies may still have filing obligations under the Corporate Transparency Act, depending on when they were formed and their beneficial ownership.
Huntly Mayo-Malasky
CEO of TFX
Huntly Mayo-Malasky, CPA and CEO of Taxes for Expats, simplifies US tax compliance for Americans abroad, blending expertise in finance, tax, and education technology.
