How to Open an LLC in USA for Non-Residents (Step by Step)

Starting a business in America as a foreign entrepreneur might seem overwhelming, but it's actually quite straightforward.

With over a decade of experience helping international business owners navigate US business formation, I've seen countless non-residents successfully establish their American dream through a Limited Liability Company (LLC).

In this article, I will share with you the steps you should follow to start your LLC in the US as a non resident.

Quick Summary

Step-by-Step: How to Open an LLC in USA for Non-Resident

Step 1: Choose Your LLC Name

Every state requires your name to include "LLC," "Limited Liability Company," or similar abbreviation. You can't use words like "Bank," "Insurance," or "University" without special permits.

Search your chosen state's business database to make sure your name isn't taken. Most states offer free online searches.

If you're not ready to file immediately, you can reserve your name for \$10-50 (depending on the state) for 60-120 days.

Pro Tip: Choose an LLC name that works internationally and is easy to pronounce for your target customers.

Step 2: Appoint a Registered Agent

This is probably the most important step for non-residents. A registered agent is someone with a US address who receives legal documents and official mail for your business.

What Registered Agents Do

• Receive lawsuits, tax notices, and government correspondence
• Forward important documents to you
• Maintain your business's good standing with the state

Your Options

1. Professional Registered Agent Services: Companies that specialize in this service (\$100-300 per year)
2. US-Based Friend or Family: Must have a physical address (not a P.O. Box) in your chosen state
3. Your US Attorney or Accountant: If you have professional services lined up

For non-residents, professional registered agent services are usually the best choice. They ensure you never miss important documents, maintain regular business hours, and many offer mail forwarding to your international address.

Step 3: File Articles of Organization

This is the official document that creates your LLC. It's also called "Certificate of Organization" or "Certificate of Formation" in some states.

Required Information in the document include:

• Your LLC name
• Your registered agent's name and address
• Your business address (can be the same as registered agent)
• Names of organizers (the people filing the paperwork)

Most states allow online filing through their Secretary of State website. You'll pay by credit card and receive confirmation within minutes to weeks, depending on the state.

The cost to file an LLC depends on the state, and fees generally range from \$50 to several hundred dollars. In Wyoming, the filing fee is \$100. Nevada is one of the higher-cost states at \$425. Delaware charges \$90, Texas requires \$300, and Florida comes in at \$125.

Processing times also vary depending on how you file.

Online applications are usually completed in 1 to 15 business days. If you choose expedited service and pay an extra fee, approval can be as fast as the same day or within 24 hours. Filing by mail is the slowest option, taking anywhere from 2 to 6 weeks.

Step 4: Get Your Employer Identification Number (EIN)

Your EIN is like a Social Security number for your business. You need it to open a business bank account, file tax forms, and hire employees.

The fastest option is online using IRS Form SS-4, but this only works if you already have a U.S. Social Security Number. If you don’t, the best method is to call the IRS business line during normal working hours and apply over the phone.

Another option is to fill out Form SS-4 and send it by mail or fax, though this usually takes much longer to process.

When applying you'll need your LLC's legal name and address, registered agent information, your personal information (name, address, individual Tax ID if you have one), and business purpose.

It is completely free when you apply directly through the IRS. Avoid companies that charge fees for this service.

Step 5: Create an Operating Agreement

Even though most states don't require an operating agreement, it's crucial for protecting your business and personal assets.

An operating agreement protects your personal liability, prevents your LLC from being treated as a sole proprietorship, and sets clear rules for how your company operates. It also gives you legal protection in business disputes and is often required by banks before you can open a business account.

Your agreement should include the ownership structure and roles of each member, how profits and losses will be divided, dissolution process, and the overall management setup.

When creating one, you can use DIY templates, which usually cost between \$50 and \$200 and work well for simple, single-member LLCs.

For more complex situations, especially if there are multiple owners, it’s often better to have an attorney draft the agreement. This option is more expensive, ranging from \$500 to \$2,000, but it gives you added security.

Step 6: Open a US Bank Account

It’s also very important to get a US business bank account to keep your personal and business finances separate. Mixing the two can put your liability protection at risk.

To open an account, you’ll need a few standard documents. These include your EIN letter from the IRS, your Articles of Organization, and your Operating Agreement. Some industries may also require a business license, and you’ll always need to provide personal identification.

Most accounts have no opening fee or charge up to \$100. Minimum balance requirements can range from \$100 to \$2,500, while monthly fees typically fall between \$10 and \$50. If you need to send international wires, expect to pay around \$15 to \$50 per transfer.

Step 7: Obtain Required Business Licenses

After forming your LLC, you may still need extra licenses depending on your industry and location.

Most businesses don’t need federal licenses, but industries like import/export, transportation, alcohol or tobacco sales, broadcasting, and investment services do.

At the state or city level, you might need a general business license, a professional license for certain services, a sales tax permit if you sell products, or special permits for food or retail businesses.

Costs vary, with general licenses ranging from \$50 to \$400, professional licenses from \$100 to \$1,000, and sales tax permits often free or under \$50.

Step 8: Get Business Insurance

Insurance protects your LLC from unexpected costs and legal claims.

General liability insurance covers accidents and usually costs \$300 to \$1,000 per year.

Professional liability insurance is important for service businesses and ranges from \$500 to \$3,000.

Commercial property insurance covers equipment, inventory, and office space, usually for \$500 to \$2,000 annually.

You can get professional small business insurance through online marketplaces, brokers, or directly from insurers, and save money by bundling policies or starting with the basics.

Understanding Your Tax Obligations

Taxes might seem scary, but the rules for non-resident LLC owners are often quite favorable.

Federal Tax Requirements

If your LLC is 25% or more foreign-owned, you must file Form 5472 along with a pro forma Form 1120 each year by April 15th. This is informational - you're telling the IRS about your business, but you might not owe any tax.

Income Tax

If you're a non-resident and your LLC doesn't have US-sourced income, you typically won't owe US personal income tax. The LLC structure provides pass-through taxation, meaning business profits pass through to owners, but non-residents only pay taxes on US-sourced income.

Sales Tax

If your LLC sells goods or services to U.S. customers, you may also need to register for and collect state sales tax. This applies even if you’re a non-resident.

Each state sets its own rules, but most require sales tax collection once your sales reach a certain threshold (known as economic nexus). Failing to register and collect sales tax can result in penalties.

Other Taxes to Consider

• Employment Taxes: If your LLC hires employees in the U.S., you’ll be responsible for payroll taxes, including Social Security and Medicare contributions.
• Excise Taxes: Certain industries like alcohol, tobacco, fuel, and firearms are subject to federal excise taxes.
• Withholding Taxes: If your LLC makes payments to foreign owners or contractors, you may need to withhold and remit a percentage to the IRS, depending on the tax treaty with your country.

Ongoing Compliance and Maintenance

Keeping your LLC in good standing requires minimal annual work:

• File state annual reports (due dates vary by state)
• Pay annual fees (\$10-300+ depending on state)
• Maintain your registered agent service
• Keep business records organized

Why Non-Residents Choose US LLCs

Here are the main benefits of forming an LLC in the United States as a non-resident.

1. Access to the World's Largest Market

The US economy is massive, and having a US business entity gives you direct access to American consumers and business partners. Many US companies prefer working with other US-based businesses, making your LLC a powerful door-opener.

2. Strong Asset Protection

One of the biggest advantages of a Limited Liability Company is liability protection. Your personal assets stay separate from business debts and legal issues.

If someone sues your business or you can't pay business debts, they generally can't go after your house, car, or personal savings.

3. Tax Advantages for Non-Residents

If you're a non-resident and don't have US-sourced income, you might not owe any US state income tax at all. The LLC structure offers pass-through taxation, meaning the business itself doesn't pay federal tax - the profits pass through to the owners.

"Foreign entrepreneurs are often surprised by the tax benefits of forming a US LLC. Pass-through taxation and foreign income rules can mean little to no US tax while still providing strong legal protections."

- David W. Klasing, Tax Attorney, Klasing Law

FAQs

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Starting an LLC in the United States as a non-resident is easier than most people think. With the right steps, you can set up your company, open a bank account, and run your business from anywhere in the world.

The costs are affordable, and in many cases, your tax obligations will be very low or even zero. With the process outlined in this guide, you can have your U.S. LLC up and running in just a few weeks.

Additionally, you can use ZenBusiness to start your LLC for free.