US LLCs can be one of the best legal entities for non-US resident business owners. Indeed, American LLCs allow you to access all the advantages of a first world jurisdiction, such as banking, payment processing and good reputation, while maintaining a relatively low tax rate and easily manageable levels of compliance requirements.
If you are looking for information on how to open an LLC in the United States, our comprehensive guide will be able to give you everything you need to know to decide if an LLC is a good option for you, how you can open it quickly and compliantly, and everything else you need to pay attention to when managing it.
What is an LLC?
A limited liability company or LLC is a US business structure created under the laws of each state, in which the company is legally separated from the owner or owners.
The LLC type company then protects its physical members against legal responsibilities, and offers fiscal transparency, that is, taxes are not paid by the company, but by its shareholders as natural persons. If there are no members of the LLC with American nationality, taxes will not have to be paid in the USA.
Who can open an LLC in the United States?
LLCs in the United States can be opened by anyone in the world, regardless of their nationality, who is over 18 years of age and who has a valid passport.
How to open an LLC in the United States in 7 steps?
Now that you know what an LLC is and that you meet the requirements to open your business in the United States, let's look at the stages that must be followed to have an operational LLC.
1. Define the state of your LLC
Carefully choose the state in which you want to register your LLC, as each one has different characteristics and obligations for your business.
When deciding in which state you want to establish your LLC, there are three criteria that are most relevant:
The amount of the single registration fee that is required to establish the LLC.
The amount of the annual report.
Only some states guarantee anonymity, that is, the names of the LLC owners are not publicly published (only the Treasury is aware)
Here we compare the main states in the USA to open your LLC.
FloridaDelawareTexasNew MexicoWyomingOpening cost$125$90$300$50$100Annual report fee$138.75$30000$60Delay5 business days9 to 12 weeks7 business days3 business daysOn the dayAnonymityNoYesNoYesYes
In general, if you prefer to save costs, New Mexico is a great option. If you're looking for more anonymity, consider Delaware. Wyoming has a naming service, which can be interesting for anonymity.
2. Choose the name of your LLC
When choosing the name of their LLC, most members only think about marketing and brand image. However, it is important to know that when choosing the appropriate name to register an LLC, the requirements of state legislation must also be met.
In general, state laws do not allow choosing a name that is already being used by another company in that same state. Also, the vast majority of states require to put the LLC acronym in the name of the business.
If you already have a business idea and want to evaluate the availability in the state you have chosen, you can do so in this name validator for LLC.
3. Choose the registered agent
No matter which state you decide to register your LLC in, all states must have a registered agent designated. A registered agent is someone who receives official or legal documents on behalf of the LLC. Once received, the registered agent transmits these documents to the LLC.
Any person over 18 years of age can be a registered agent of an American LLC, and can name themselves or an employee. However, the agent must be available at an address within your state during normal business hours. Also, all companies that are responsible for registering your LLC offer registered agent services and are renewed annually.
4. Complete the "Articles of Organization" form
To form your LLC as a legal entity, you will need to file this document with the state agency that handles the filing of business documents in your state. In most states, this document is called the "Articles of Organization," but some use a different name, such as the "Certificate of Formation."
This document will have all the key information about the business, such as the business name, address, purpose, members, etc.. Sending this document usually has a cost, which varies depending on the state (see line "opening cost" in the table in point 1.
Once this form is approved by the state agency, your LLC, the state will issue you a certificate that will indicate that your LLC is formally registered.
5. Create your operating agreement
An operating agreement is basically an agreement on the functioning and operations of the LLC between the members. This document lists the details of the financial, legal and management rights of all members of the LLC: dividend distribution, abandonment clauses, non-competition, capital contributions...
Many states do not require it, but it is highly recommended to have it the same, to ensure that all members agree on their rights and responsibilities.
Download Operating Agreement template
6. Obtain an EIN
Once your LLC is registered, you must obtain an "Employer Identification Number" or EIN from the IRS. An EIN is basically the number that the IRS uses to keep track of the LLC's obligations, tax payments, salaries, etc...
While having an EIN is not always required (for example, with Single-Person LLCs), it will be necessary to have one if you have or plan to have employees, if your LLC has more than 1 member, or if you want to open a bank account for your LLC, among other things.
7. active
Establishing an LLC is only the beginning of the adventure. Once your LLC is registered and operational, make sure you do not miss deadlines with the state. You will most likely have to submit an annual report that updates the information related to your LLC, and in some states it usually has a cost that must be taken into account.
Delegate the creation of your LLC and avoid all these complex processes
What to do after creating my company? LLC?
As we said previously, registering your LLC is just the beginning. Once you have completed all the previous steps, there are some points that we recommend that you take into consideration.
Open a bank account dedicated to your LLC
A business bank account helps your LLC establish its financial presence and separate personal and business finances, which helps maintain the legal distinction between the LLC and its owners. its limited liability protections.
In addition, other additional benefits such as simple accounting for the business, which will make tax time or tax reports much less intimidating.
The recommended banks for your business account as a foreigner from the USA are Mercury, Relay, Revolut, AirWallex, Wise, Bank of America, Chase.
Plan the taxation of your LLC
LLCs are taxed transparently, that is, the members are responsible for paying personal taxes on the LLC's income.
Being a non-resident, the taxes paid by your LLC may be affected by its categorization as ETBUS (Engaged In Trade in The US).
Plan the taxation of your LLC in detail, since this may vary depending on activities such as Trading, Dropshipping, FBA, sales of physical products in the USA, etc...
Meet your obligations
Your LLC will have obligations to comply with every year, such asthe renewal of the Registered Agent. Depending on the states, your LLC may have to submit an Annual Report, just as we saw previously, it has a cost.
It doesn't matter if your business does not have to pay taxes in the United States, your LLC must still declare its activity.
Do you still have doubts about registering an LLC in the USA?
What are the benefits of opening an LLC in the United States?
Among the main advantages of opening an LLC in the United States as a non-resident, we can name:
An LLC is a “pass-through entity,” which means that taxes can pass through the owners.
An LLC allows you to legally separate your business from yourself.
An LLC gives your business a professional image
Open a LLC makes it easier for you to access the US market.
Opening an LLC allows you to have a professional bank account and collect in dollars.
Complying with the obligations of an LLC is easy.
How much does it cost to open an LLC in the United States?
The cost of opening an LLC in the United States will depend on the state in which you register. The value can vary from as little as $50 to more than $500 dollars, just for the company's registration. Additionally, when analyzing the cost of opening an LLC, it is important to take into account the annual cost of maintaining it, having to pay a registered agent and the annual report (depending on the state).
How long does it take to open an LLC in the United States?
If you apply yourself to open an LLC online, it is possible that your LLC will be formed within a period of two to four business days. Otherwise, LLC documents filed by mail typically take two to several weeks to process. The time it takes for the LLC to register will vary from each state, as well as the agility of the IRS.
How many members can an LLC have?
There is no minimum or maximum limit for the number of owners of an LLC. LLCs can be “Single Member”, that is, with a single member in which you are the sole owner or have several dozen members if you wish.
How do the taxes of Non-Resident LLCs work?
US LLCs characterized as “Foreign Owned” do not pay taxes on business income, but rather have fiscal transparency, that is, taxes are passed to the legal entities of the members of the LLC based on their percentage of shares.
What are the different types of LLC?
There are 6 main types of LLC:
Single-member LLC: This LLC is owned and managed by a single person.
Multi-member LLC: This is the standard type of LLC with more than one partner. Each partner then has a percentage of shares in the company.
L3C: An L3C (low-profit limited liability company) is a type of for-profit LLC whose main purpose is charitable or educational.
Series LLC: A Series LLC is a unique form of limited liability company (“LLC”) in which the bylaws specifically permit the unlimited segregation of member interests, assets and operations into separate series. Each series operates as a separate entity with a unique name, a bank account, and separate books and records.
PLLC: A professional limited liability company (“PLLC”) is a business entity designed for licensed professionals, such as lawyers, doctors, architects, engineers, accountants, and chiropractors.
Restricted LLC: This type of U.S. LLC is not taxed for the first 10 years of its existence. constitution. However, they cannot make distributions to members. This must appear in the Article of Organization.
What types of businesses usually benefit from opening a US LLC?
The non-resident businesses that most often benefit from opening LLCs in the United States are usually dropshipping companies, trading companies, freelancers who work internationally, E-commerce businesses and other types of online businesses. LLCs are often a great option for any business that doesn't have borders or local requirements.
What are the differences between an LLC and a Sole Proprietorship?
A Sole Proprietorship is an unincorporated business whose sole owner is the person who runs it. As a sole proprietor, there is no separation between your personal assets and expenses and those of the business. You are personally responsible for all debts and obligations of your company. People who do a lot of self-employment, such as freelancers, consultants, and personal trainers, often choose to file their taxes as sole proprietors. It's the easiest way to do it if you're just starting out or not yet making enough profits to justify the costs of an LLC.
Is an LLC the same as a Corporation?
No. Taxation is the main difference between an LLC and a Corp. The taxes of an LLC are declared by the owners. Corps file single returns under their own names.
An LLC can, however, request that the IRS classify its LLC as an S corporation. You can often divide the LLC's net income into income and dividends if it has that tax status. When you do that, both you and the other owners pay less in self-employment taxes. Making that distinction, however, only changes how your business pays taxes, it does not transform your LLC into a corporation.
Written by
Ignacio Navarro
Ignacio Navarro is a Certified Public Accountant, graduated in 2020 from the National University of Tucumán. Founder of Start Companies since 2023, he advises clients worldwide on forming LLCs in the United States and on proper tax filing. His expertise combines legal, tax, and practical knowledge, offering a comprehensive service that spans from company formation to bank account setup and sales platform integration.
