Non-US Residents and LLCs: A Guide to International Business Ownership
For generations, people have looked to the United States as a land of opportunity; a land where entrepreneurial dreams come true. That’s still very much the case, as the US offers a number of legal options for establishing successful businesses. Even those who aren’t US residents can find startup success here.
For example, the Limited Liability Company, or LLC, is one of the most popular models for creating a prosperous business. Perhaps you know that already, but what you might not know is that even non-residents can register US-based LLCs. In this guide, we’ll tell you everything you need to know about forming an LLC without being a US resident.
Why Choose the US for Your Small Business?
There are plenty of reasons why non-residents look to America to establish their entrepreneurial futures. Consider just a few of the main benefits to launching a business based in the US:
- We have a very business-friendly culture overall, one that dignifies and honors people pursuing their entrepreneurial dreams.
- We have a corporate tax system that’s competitive (and with an LLC, you can actually opt out of corporate taxation altogether).
- The US has relatively low business startup cost thresholds, relative to the rest of the world.
- We also have plenty of easy-to-form business structures, like the LLC, minimizing the administrative needs of launching a new company.
There’s ample reason to choose the US for your small business… and the LLC model may very well be your best bet to move forward.
What is an LLC?
The LLC is one of the most popular legal structures for small business ownership, beloved by entrepreneurs across the county and throughout the world.
Here’s something important to keep in mind about LLC formation: In the US, when you first begin generating revenue on the basis of self-employed activity, the government automatically classifies you as a Sole Proprietor. What this means is that there’s no legal distinction between you and your company; in other words, your business is not established as its own legal entity.
LLCs work a little differently. When you register your business as an LLC, the company actually is established as a distinct legal entity. This allows you to draw a line between your personal assets/liabilities and business assets/liabilities, keeping these things in two entirely separate pots. This, in turn, yields some significant benefits.
What are the Benefits of the LLC?
Just a few of the benefits offered by the LLC structure include:
- Personal liability protections. By separating business assets/liabilities from personal ones, entrepreneurs can keep their personal wealth safe and sound from litigation or aggressive creditors.
- International availability. Again, the LLC structure is available to anyone. Non-residents can start one, even selecting the state in which they wish to register their business (and pay their taxes).
- Administrative ease. Compared with other forms of business structure, the LLC comes with a minimal administrative burden. It’s fairly easy and inexpensive to start an LLC, and the annual reporting requirements are minimal (especially compared with Corporations).
The list goes on from there; now the question is, what’s the best way to register an LLC as a non-resident?
How Non-Residents Can Register LLCs
The guidelines for LLC formation are fluid from one state to the next, but generally speaking, here’s what the process looks like.
Choose the State You Want to Register In
When you live in the US, it’s always in your best interests to register your LLC in the same state where you live. Non-residents have a little more leeway to select a state based on taxation and other relevant laws. You may want to do some research of your own, but for many non-residents, the most desirable states for LLC formation include Delaware, Wyoming, and Nevada.
Select a Name for Your LLC
When choosing a name for your LLC, you have to think about more than just marketing and branding concerns. You also need to consider legalities. Specifically, you have to choose a name that isn’t already in use in the state of your choosing. There will likely be a state-specific online directory for you to search, verifying the availability of your chosen name.
Find a Registered Agent
Every LLC is required to have a Registered Agent, but this is especially important for non-residents. Your Registered Agent has to be someone with a mailing address in the state of your choosing; their job is to receive all legal and tax correspondence for you. Companies like Northwest Registered Agent provide their services at a flexible price point.
File Your Paperwork
To formally register your LLC, you’ll need to file Articles of Organization with the state where you’re establishing your company. This usually involves providing some basic information about the scope and purpose of your company, your contact information, and the name of your Registered Agent. Reach out to the relevant Secretary of State for full details. Also be ready to pay a filing fee, which can be anywhere from $50 to $500.
Claim an Employer Identification Number
Claiming an EIN is a little more difficult for non-residents than it is for residents. Residents can get one from the IRS free of charge and with little to no wait time. Non-residents will need to pay a modest application fee and potentially wait a few weeks for their EIN request to be approved.
Get a US Phone Number
It’s highly recommended that you set up a US phone number, which you will need to open a US bank account and to make use of payment processing services like Stripe. Doing so also adds a sheen of professionalism to your company, helping you earn the trust of your US-based consumers.
Anyone Can Start an LLC
The bottom line: LLCs provide the foundation to lasting US-based business success. And you don’t have to be a resident to start one. Use these guidelines to kickstart your own entrepreneurial journey, no matter where you happen to live.
Author Bio
Amanda E. Clark is a contributing writer to LLC University. She has appeared as a subject matter expert on panels about content and social media marketing.