Setting up a US LLC as a non-resident opens access to the US market, financial services, payment providers, and banking options, which makes doing business in the US much easier.
One common misconception is that US citizenship or residency is required to form an LLC. However, non-residents, called non-resident aliens by the IRS, can set up an LLC too without needing a Green Card or a US residential address.
If you're thinking about opening a US LLC, make sure you understand the rules, steps, and ongoing tax and legal requirements. Let's take a closer look.
Can a non-resident open a US LLC?
Yes. Non-residents—what the IRS calls non-resident aliens—can form a US LLC in any state without US citizenship, a Green Card, or a US residential address, and without traveling to the US. What you actually need is four things: a registered agent in your formation state, Articles of Organization filed with that state, an Employer Identification Number (EIN) from the IRS, and—if you want to accept US payments—a US business bank account. The sections below walk through each, plus the one federal tax filing that trips up most non-resident owners.
What is an LLC?
An LLC, or Limited Liability Company, is a type of US company that combines the owners' liability protection of a corporation with the flexibility of a partnership.
This means that owning an LLC protects your personal assets from business debts or legal issues. It also offers tax benefits with its pass-through taxation setup.
For international entrepreneurs and non-US residents, starting a US LLC is a great way to enter the American market. It gives you credibility, and opens the door for your business to have customers in one of the world's largest economies.
However, an LLC might not always be the best fit. If you want to attract venture capital or angel investors, a C Corporation might be a better choice. As such, seek professional assistance when considering what might be the most suitable business structure depending on your goals.
Choosing the right state to register your US LLC as a non-resident
Picking the right state to register your US LLC matters, especially when you're a non-resident. You can choose any state, but some offer better perks than others.
Most non-residents look for ease of set up, low setup costs, low or no state taxes, and minimal ongoing reporting requirements. Wyoming is a top pick because of its low taxes, affordable upkeep, privacy protections, and business-friendly laws. In Wyoming, for example, the Articles of Organization filing fee is $100 and the annual report license tax is a $60 minimum, according to the Wyoming Secretary of State. Nevada and Delaware are also popular among international entrepreneurs who value privacy protections.
Sometimes, a specific state makes sense for your LLC. If you already own property, have an office, or do business there, or have other significant ties, it can make sense to register in that state. In partnership with an advisor, always weigh your options based on your unique situation. For a non-resident with no US physical presence, the formation state rarely changes your federal tax exposure—it mostly affects filing fees and privacy.
How to form a US LLC
Setting up an LLC in the US isn't difficult. Though steps can vary by state, here's a general guide:
Choose a Registered Agent: A registered agent is a third-party responsible for receiving official legal documents on behalf of your LLC. This agent must be based in the same state where your LLC is registered. If you are not a resident of the state where your LLC is incorporated, you'll need to hire a registered agent service to meet this requirement. The registered agent's address can also be used as the business address.
File Articles of Organization: When you form an LLC, the state will create a document known as the LLC's Articles of Organization. This contains the company details - the company name and address, the founding date, and the registered agent details. When forming an LLC, you or the registered agent will need to fill out a form providing this information.
Get Licenses and Permits: Depending on your business and the state, you may need certain licenses or permits. For example, New York requires LLCs to publish a formation notice in local newspapers. You will also need to file annual reports and renew your registered agent service to keep your LLC in good standing.
Get an EIN (Employer Identification Number): An EIN acts as your LLC's tax ID. You'll need it to open a business bank account, file taxes, and hire employees. To apply, provide your business name, a US address, and details about your activities. It's also wise to have backup names ready in case your first choice is taken. You'll also need to provide information about the LLC's responsible party.
How does a non-resident get an EIN without an SSN?
You can get an EIN even without a US Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). On IRS Form SS-4, the responsible party simply enters "foreign" on the taxpayer-ID line when they aren't eligible for an SSN or ITIN. The catch is that the IRS online EIN tool requires an existing SSN, EIN, or ITIN—so as a non-resident you apply by fax, mail, or phone instead. International applicants can call the IRS at 267-941-1099 (not toll-free), fax Form SS-4 to 304-707-9471, or mail it. Per the IRS, faxed applications are typically processed in about four business days and mailed ones in about four weeks.
Opening a US bank account
A US bank account is a major benefit and incentive for non-residents starting a US LLC, as it facilitates and simplifies payment processing from US sales and clients. It also separates your business and personal finances, protecting your LLC's liability, as well as simplifying your company tax filing.
That said, opening a US bank account as a non-resident can be a complex process. Traditional banks may require you to visit the US in person to complete the process, which may not be convenient or possible if you live overseas. Online banks such, however, including Relay, allow non-residents from many countries to open a US business bank account online from overseas.
Besides their passport, a physical US address and the company details, non-residents setting up a US bank account for their LLC must also provide details about their income and the sources of funds for their new LLC.
Do non-residents pay US taxes on a US LLC?
It depends on where the income comes from—and there's a filing requirement that applies either way. A foreign-owned single-member LLC is treated as a "disregarded entity," and the IRS requires it to file Form 5472 attached to a pro forma Form 1120 every year it has a reportable transaction, even if it owes no US tax. Missing that filing carries a penalty of $25,000.
Whether you actually owe US income tax turns on whether your LLC has income "effectively connected" with a US trade or business, which the IRS calls effectively connected income (ECI). A foreign owner with no US trade or business and no US-source income generally isn't subject to US federal income tax on foreign-source income—but the Form 5472 filing still applies. Because whether you have ECI is specific to your situation, confirm it with a cross-border tax professional before you file.
Overcoming the challenges of forming a US LLC
Starting a US LLC as a non-resident can feel overwhelming. Navigating state and federal rules, securing an EIN, and opening a business bank account can all be tricky.
That's why many non-resident entrepreneurs turn to firms that specialize in helping with US LLC formation. These experts guide you in choosing the best state for your situation, handle EIN registration, provide registered agent services, and ensure you meet ongoing tax and compliance requirements. They can even assist with setting up a business bank account.
With the right support, you can simplify the process and focus on growing your business, knowing your LLC is set up the right way.
Entity Inc. works with Relay to provide a full incorporation and compliance service for non-residents wishing to set up a US LLC with a business bank account. For more information, visit https://www.entity.inc/formation/.
Once your LLC and EIN are in place, Relay lets non-residents from many eligible countries open a US business bank account entirely online—no US address required, with up to 20 checking accounts, no monthly maintenance fees, and direct QuickBooks Online and Xero sync to keep your books clean. Open a Relay account to give your new company a home for its US payments.
Frequently asked questions
Can a non-US citizen own a US LLC?
Yes. There's no citizenship or residency requirement to own a US LLC. Non-residents can form one in any state without a Green Card or a US address.
Do I need to visit the US to form an LLC or open a bank account?
No. You can form the LLC and get an EIN remotely. Some traditional banks require an in-person visit, but online platforms like Relay let non-residents from many eligible countries open a US business bank account entirely online.
Do I need an ITIN to form a US LLC?
No. An ITIN isn't required to form an LLC or get an EIN—you can enter "foreign" on Form SS-4. You'd only need an ITIN if you have a personal US tax return to file, so check with a tax professional about your own situation.
Which state is cheapest for a non-resident LLC?
Wyoming is a common low-cost pick—$100 to file and a $60 minimum annual report tax. Delaware and New Mexico are also popular. For a non-resident with no US physical presence, the formation state rarely changes your federal tax exposure.
Do I have to file anything with the IRS if my LLC earns no US income?
Usually yes. A foreign-owned single-member LLC generally must file Form 5472 with a pro forma Form 1120 each year it has a reportable transaction, even with no US tax due. The penalty for missing it is $25,000.
