Last Updated on 4 weeks by Komolafe Bamidele
You can start a business and live the American dream even if you don’t live in the US.
Starting a US company could begin with the formation of an LLC. Even if you’re not a resident, you can create and run an LLC for non-US residents in the US.
If you’re in a hurry to quickly set up the LLC, let “Zenbusiness” do the work for you for $0 + state fee, which includes company formation paperwork, finding registered agents, and setting up the USA bank account. etc
This article will show you how to successfully navigate this complicated road if you’re a non-resident, an aspiring entrepreneur or just interested in business in the US.
What Is an LLC?
A limited liability company, which is also sometimes called an LLC, is a legal organization for a business that lets it work well as a separate entity.
A limited liability company (LLC) can protect you from legal responsibility because of its name.
It also lets you open a bank account and accept payments as legal us residents.
To make it simple to understand, a limited liability company (LLC) works independently from its members or owners.
This means that the limited liability company is responsible for any cases or bills that are brought against it.
There is no way that the members’ or owners’ personal assets can be used to pay off the LLC’s debts.
Most owners see this as one of the main reasons they want to set up a limited liability business.
First, it’s essential to know that outsiders and people who don’t live in the US are officially allowed to own an LLC in the US.
The government calls people who are not US citizens “aliens.” There are two types of aliens: resident aliens and non-resident aliens.
The difference between the two types is based on tests like the “substantial presence test” or “green card test.”
Both groups in the US can form LLCs, though they have to follow different filing standards.
The Benefits of Forming an LLC for Non-US Residents.
- US LLCs are the way to go for non-US citizens. One of the top reasons why especially citizens of other countries have US LLCs is to protect their assets, just like US citizens do.
- Another one of the big reasons is that US LLCs are easier to maintain than US Corporations, which don’t require a board of directors or shareholder meetings.
- Thirdly, individual members prefer having their LLC based in the US because the US has the largest economy in the world. People trust the US economy more than any other, making it easier for any business to sell anything.
- Lastly is pass-through taxation: this means that the profits and losses of the business pass through onto the owner’s tax reports. This way, the member of an LLC gets a huge tax break. Non-citizen LLCs, on the other hand, cannot be treated as an S Corporation and can only be treated as a C Corp, unless all of the members are US citizens or resident aliens.
Step-by-Step Guide to Forming an LLC for Non-US Residents.
1. Choose a State
While most states are business-friendly and tax-friendly, a few are especially good for LLCs.
The best option could be different, so weigh your options carefully and talk to an expert about tax laws, regulations, and how easy it is to operate a business in different locations.
If you don’t live in the US, a Delaware LLC or a Wyoming LLC are popular choices:
Businesses that want to get money from investors often choose to go the Delaware LLC for people who don’t live in the US route.
The Wyoming LLC for non-US residents is an alternative for small businesses that want lower company fees.
Wyoming also doesn’t tax people or businesses on their income. If you want to operate your business from a different state, this state might be a better choice.
2. Choose a Name
The next step is to pick a name for your business. There will be an LLC at the end of any name you choose.
You need to go through a legal process called “Doing Business As” (DBA) if you want to use a different name.
You have to search for the name before filing it to ensure no one else is already using it.
When you try to register the business, you will find out if the name is already being used by someone else.
Use internet resources such as Zenbusiness to streamline this procedure.
3. Hire a Registered Agent
When you start your LLC for non-US residents, you must have a registered agent with a physical address in that state.
In the name of your business, this agent will receive official notices and legal documents.
The registered agent doesn’t need to be a US citizen, but they do need to have an address in the state where the LLC is registered.
Notices from the government and official letters are sent to this address.
Professional registered agent services are chosen by many businesses, especially those run by non-resident aliens or with locations in more than one state.
For a fee, these services give a registered agent a physical address in the state and take care of receiving and sending legal documents.
This can be especially helpful for people who don’t live in the US and may need a physical presence there.
It is noteworthy that Zenbusiness provides a complementary resident agent service for the first year.
4. File Articles of Organization
LLCs must file articles of organization in most states. The articles on organization tell you about the company’s basics.
The state will ask for a list of the people who are part of the company, the address of your business, and other information.
An operating agreement might be something else you need to file. The fees to file and the cost to maintain your account differ in each state.
When picking a state, these costs should be taken into account.
5. Obtain an EIN
You should get an EIN from the IRS even if you don’t plan to hire anyone immediately.
For tax purposes and banking transactions, this unique identifier is critical
6. Open a bank account in the US
You can open a bank account for your LLC after completing these steps.
To open this account, the bank must see proof that you are who you say you are and documents showing how your business was formed.
To keep your personal and business finances separate, it’s also a good idea to open a business account.
However, it can be challenging for people who don’t live in the US to open a business account there.
Conclusion
As a non-resident or foreigner, forming an LLC for non-US residents is a smart move that can pay off big and lead to many business opportunities.
You can build a strong base for your business in the US market by following the steps outlined and considering the legal and tax implications.
Using services like Zenbusiness makes the process easier, so you can focus on growing your business while still following US laws.