How to Open a Company in the USA | TRUiC (2024)

LLC Registration in the USA

The biggest factor you will need to consider when forming your USA LLC is compliance and ensuring that all state and federal requirements are met so you can legally start and run a business in America from overseas. There are international US business services that provide a full-service experience from forming your business to setting up your US bank account, in one package. You can also use our guides and do the work yourself.

The most important tasks are choosing your LLC’s state, registering the LLC, getting an Employer Identification Number (EIN), and having a physical US mailing address. We will walk you through these tasks in the steps below.

Please note that forming an LLC in the USA does not grant you any visas to work in the USA.

What Are the Steps to Register a USA LLC?

Anyone can register a limited liability company (LLC) in the USA; you don't need to be a US citizen or a US company. Foreign citizens and foreign companies can form an LLC in the USA.

You can complete these steps on your own with the help of our guides or use an international US business service that handles everything, including setting up a US bank account, keeping a US address, LLC formation, registered agent services, and US business tax support.

The steps to form your foreigner-owned LLC are:

1. Select a State
2. Name Your LLC
3. Hire a Registered Agent Service
4. File Your LLC With the State
5. Create an LLC Operating Agreement
6. Get an EIN
7. Get a Physical US Mailing Address
8. Open a US Bank Account
9. Prepare for US Tax Filing

1. Select a State

It is usually advisable to form an LLC in a state without state taxes, so you only have to handle US federal taxes.

However, for the purpose of your business, if you need to open offices, or have a physical presence in a particular state, you will need to form an LLC in that state.

When choosing the state to form your US LLC in, it is usually best to first consider if you will have a physical office or presence like employees or a job site in a specific state.

If this is the case, it is best to form your LLC in that state.

This avoids needing to register your LLC as a foreign LLC and hiring registered agents in multiple states.

However, if your business does not have this physical need, it is usually advisable to form your LLC in a state without state taxes, so you only have to handle US federal taxes.

The three states you should consider are Wyoming, Delaware, and Nevada.

We recommend Wyoming, as they have foreigner-friendly laws, lower filing and annual fees, and no state, personal, corporate, or capital gains taxes.

2. Name Your LLC

Every state has its own rules about what kinds of names are allowed for LLCs. In general, you will need to observe these guidelines:

• Your name must include the phrase "limited liability company," or one of its abbreviations (LLC or L.L.C.).
• Your name cannot include words that could confuse your LLC with a government agency (e.g., FBI, Treasury, State Department, etc.).
• Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.
• Is the URL available? We recommend that you check to see if your business name is available as a web domain. Even if you don't plan to make a business website today, you may want to buy the URL in order to prevent others from acquiring it.

To learn more about naming your business, read our How to Name a Business guide.

3. Hire a Registered Agent

What is a registered agent?A registered agent is a person or business that sends and receives legal papers on your behalf.

Most states require every LLC to nominate a registered agent. Your registered agent must be a resident of the state you're doing business in, or a corporation authorized to conduct business in that state.

It is typically best to hire a registered agent service for your non-resident owned business, as the service you hire will have a physical address in your business’s state, and will be open all required hours to accept service of process and other compliance notices.

4. File Your LLC With the State

To officially file an LLC, you will need to file your documents with the state.

The most common name for this document is "Articles of Organization." It is also known as a Certificate of Formation or Certificate of Organization. Your LLC formation document outlines the organizational structure of your business.

TIP
Your Articles of Organization will define if your company is member-managed or manager-managed, this is an important distinction that is determined by how your company runs.

5. Create an LLC Operating Agreement

An operating agreement is not required in most states, but it's a good practice to have one.

What is an operating agreement? An operating agreement is a legal document outlining the ownership and operating procedures of an LLC. Download a free template operating agreement.

Why are operating agreements important? A comprehensive operating agreement ensures that all business owners are on the same page and reduces the risk of future conflict.

6. Get an EIN

You need to obtain an Employer Identification Number (EIN), which is a tax ID for your LLC.

You do not need either a US Social Security number (SSN) or an Individual Tax Identification Number (ITIN), or a US mailing address to get an EIN.

While these identification numbers do allow for the IRS’s online application process to get an EIN;there are other options for non-resident entrepreneurs, an application can be submitted byfax or mail.

Fax

If you would like to file for an EIN yourself, then filling out, signing, and faxing IRS Form SS-4 Application for Employer Identification Number is the fastest option, typically taking up to one week to receive a reply.

According to some sources, line 7b, where the SSN, ITIN, or EIN of the responsible party is defined, can be filled out as "None - Foreign" or similar wording, to designate that the responsible party is a non-resident or foreigner filing for a US EIN.

Here is a list of the fax numbers used by the IRS to file Form SS-4, which depends on if the location of your business’s principal office or agency (or your primary residence) is within or outside of the US.

Mail

Filing Form SS-4 by mail is similar to filing by fax, in that you will fill out, sign, and send the completed form to the IRS. This option, however, takes a much longer time, typically up to four to five weeks to receive the EIN.

The IRS address and attn designations for your submission will also depend on if your office, agency, or primary residence is based outside of the US.

7. Get a Physical US Mailing Address

You'll need a physical address in the state you choose; this is necessary to open a bank account and for LLC formation.

One way to get a mailing address in the US is to establish a physical office in the state you’re going to form and do business in if this is required for your business.

But, even if you do not need to open a physical office in the US, you will still need a US mailing address in your LLC’s state.

Some services, like Earth Class Mail, can provide a real US mailing address, which is required to register for a US bank account and is useful for other services.

They also receive mail on your company’s behalf to scan and deliver to you online and forward packages out of the country.

8. Open a US Bank Account

After you have successfully established your business in the US, you will need to set up a US bank account.

This offers several benefits for foreign-owned LLCs, including the ability to trade in US dollars and have access to affordable international transfers from anywhere in the world.

Opening a US business account offers several other additional financial benefits, including:

• Increased credibility
• Increased access to business loans
• Increased savings
• Stronger business credit
• Higher liquidity

Besides the financial benefits, there are important practical and legal considerations to opening a business checking account in the US, which is one of the reasons that it remains so highly recommended by the Internal Revenue Service (IRS).

For example, establishing a separate business checking account can go a long way in maintaining your LLC’s corporate veil. This is an invisible “cloak” that is used to describe your legal protections as an incorporated entity — including your right to limited personal liability under the law.

Keep in mind that you will be required to pay US taxes for revenue that is generated from trade or business that has taken place within the US.

An LLC is considered to be “engaged in trade or business” in the US if it satisfies the following criteria:

• It has one or more “dependent agents” in the US: This is an employee that works for your LLC almost exclusively, and
• That dependent agent partakes in activities that significantly further your business’s activities within the US, or
• Your LLC is engaged in “considerable, continuous, and regular” business within the US.

Courts have not provided a clear definition for what constitutes a “considerable, continuous, and regular” business activity, but — generally speaking — an LLC will be subject to US taxes for revenue that has been generated as a result of business activity within the US.

You will need to file different forms with the IRS depending on whether you are a single-member LLC or an LLC partnership:

• Foreign-Owned Single Member LLC: File Form 5472 and Form 1120 each calendar year.
• Foreign-Owned Multi-Member LLC: File an annual Form 1065. This includes Schedule K-1. Keep in mind that you may also have to file Form 8804 and Form 8805 if the company has revenue that has been generated from business or trade that has taken place within the US.

The process of opening a US bank account can be quite complicated, but this will ultimately depend on the bank in question.

Most conventional brick-and-mortar banks require in-person visits or proof of address in the form of a physical address or a utility bill. For obvious reasons, this can be quite inconvenient — or even practically impossible — for business owners outside the US.

Having said that, there are several “high-end” digital banking platforms that do not have the same qualification criteria.

The application requirements can vary with each online banking platform. Most require the following documents:

• Your Articles of Organization: This can also be known as a Certificate of Organization or Certificate of Formation, depending on your state.
• A US Address: This can be a virtual mailing address or the address of your Registered Agent.
• Your Employer Identification Number (EIN): You can do this by calling 267-941-1099, but you will need to be authorized to receive the EIN and be able to answer questions that concern Form SS-4, Application for Employer Identification Number.
• Proof of Identification: As an international applicant, this will likely need to be your passport.
• LLC Operating Agreement: This may be required, but you will have to assess this on a case-by-case basis. Even if it is not required, it is generally recommended that you draft an LLC operating agreement from a practical standpoint.

9. Prepare for US Tax Filing

The US Internal Revenue Service (IRS) creates the tax code and regulations for LLCs. A foreigner-owned LLC is taxed based on how many members the LLC has.

Single-member LLCs are LLCs with only one member. Non-resident single-member LLC owners must file forms 1040-NR, Form 5472, and Form 1120.

Multi-member LLCs are LLCs with more than one member. Multi-member LLCs must file forms 1040-NR, Form 5472, and Form 1065.

Note: The penalty for failure to file Form 5472 is $25,000 per return and $25,000 accrued each month thereafter until the form is successfully submitted to the IRS. This form can be difficult to complete. We recommend becoming familiar with it before your business tax return is due.

Many non-resident LLC owners choose to partner with Globalfy for help with filing their US tax returns, including form 5472. Their team can help answer questions and ensure that you stay legally compliant to run your business hassle free.

Summary of Forming a US LLC as a Non-Resident

The biggest factor you will need to consider when forming your US LLC is compliance and ensuring that all state and federal requirements are met so you can legally start and run a business in America from overseas.

To form your US LLC and start doing business in the US, you must:

1. Select a state
2. Name your LLC
3. Hire a registered agent service
4. File your LLC
5. Create an LLC operating agreement
6. Get an EIN
7. Get a physical US mailing address
8. Visit the US and open a US bank account
9. Prepare for US tax filing (Form 5472)