How to form a US LLC as a non-resident

Can a non-resident form a US LLC?

Yes. No US state requires the owner of an LLC to be a US citizen or resident, and the whole process runs online. What you need includes a registered agent with a physical address in the state you form in and a US bank account that accepts owners who live abroad.

Founders do it to sell to US and global customers, to use Stripe and PayPal where they are restricted, to hold US dollars, and to give clients a US company to contract with.

The steps, in order

1. Choose a state. For most online businesses run from abroad, Wyoming; see below.
2. Choose a name that meets the state's rules and is not already taken. Our name checker covers the state rules.
3. Appoint a registered agent in that state. It receives legal and state mail for the LLC.
4. File the formation document (articles or certificate of organization) with the state.
5. Write an operating agreement. Banks ask for it. Create one free.
6. Open a US business bank account with a provider that accepts non-resident owners.
7. Connect payments: Stripe, PayPal, Wise or Payoneer, in the company's name.
8. Keep it compliant: the state's yearly report or tax, a registered agent every year, and Form 5472 with the IRS.

Documents you need

Less than most founders expect. To form the LLC:

• A valid passport for each owner, used to verify who is behind the company.
• Your home address abroad.
• A company name, with one or two backups in case the first is taken.
• What the business does, in a sentence, for the formation document and the bank.
• Each owner's share, if there is more than one owner, for the operating agreement.

Banks then ask for the formation document, the operating agreement and usually proof of your address. You do not need a US address, a visa or an ITIN for any of it.

Which state to form in

If you live outside the US and run the business online, you usually have no US state where you are "doing business", so you can choose freely. Wyoming is the common default: light yearly upkeep, no state income tax, and simple filings. Delaware is the choice for companies that will raise venture capital, normally as a C corporation. New Mexico has no annual report..

If you will hire in, rent in or regularly work from a particular US state, form there instead, or you will have to register there as well. See the best state to form an LLC and Delaware vs Wyoming.

Bank account and payments

The LLC can apply for a US business bank account online with US fintech banks that accept non-resident owners. Acceptance depends on your country of residence and the business, so check before you apply: our bank account checker shows the options for your country, and the best business bank accounts for LLCs compares nine providers.

A US LLC with a US bank account can open US Stripe and PayPal accounts in the company's name, which is how founders in countries where they are unavailable or limited get paid. The payment guides below cover your country and provider.

Taxes and yearly filings

A single-member LLC owned by a non-resident is a "disregarded entity" for US tax. Whether it owes US income tax depends on whether its income is effectively connected with a US trade or business: a founder selling services from abroad with no US office or staff often owes none.

Either way, a foreign-owned single-member LLC must file Form 5472 with a pro forma Form 1120 every year, reporting transactions with its owner. The IRS penalty for not filing is $25,000 per form. Estimate yours with the Form 5472 penalty calculator; see the Form 5472 guide and US tax obligations for non-residents. Your home country may tax the profit too; the tax treaty rates tool shows treaties with the US.

The state side is separate: most states have a yearly report or tax. LLC taxes by state and each state's annual report page set out what applies.

Mistakes that cost non-residents most

• Skipping Form 5472 because the LLC had no income. The filing is still due, and the penalty is $25,000 per form.
• Mixing money. Paying personal costs from the LLC account, or customer payments into a personal one, weakens the company's separate status and muddles the 5472.
• Letting the registered agent lapse. The state can dissolve an LLC with no agent, and Stripe and banks check good standing.
• Missing the state's yearly report or tax. Late penalties, then administrative dissolution. Our compliance tracker lists your dates.
• Picking a state for the wrong reason. Forming where you have no presence is fine; forming somewhere to avoid a state where you actually operate is not.

What it costs

With StartGlobal, forming your LLC costs $399 in any state, with the state fee included, plus your operating agreement, first-year registered agent and help opening a US bank account. Ongoing compliance is available as Managed LLC at $149 a month, or a la carte from $99 a year. See pricing, and how we compare with Stripe Atlas, Doola and Firstbase, or the best LLC services for non-residents.