LLC for non-residents: How to start a US company without living in the US
by Team Devanta Authority
- December 26, 2025
- Business Formation
Starting a company in the United States no longer requires a US passport, a local address, or even physical presence in the country. For non-residents running online businesses, offering services internationally, or selling to US customers, forming a US LLC has become one of the most practical ways to operate globally while maintaining credibility and access to key financial tools.
A US LLC allows non-residents to legally own and operate a company that can invoice clients, accept payments through platforms like Stripe or PayPal, and open US-based business bank accounts. All of this can be done remotely, provided the structure is set up correctly and ongoing compliance requirements are met.
This guide explains how non-residents can form a US LLC, what is legally allowed, how taxes work, which states are best suited for international founders, and where most people make costly mistakes.
Can a non-resident own an LLC in the US?
Yes, a non-resident can legally own a Limited Liability Company in the United States. US company law does not impose citizenship or residency requirements on LLC ownership, which means foreign individuals are allowed to own one hundred percent of a US LLC. This applies equally to single-member and multi-member LLCs, regardless of where the owners live.
For international founders, this is one of the main reasons the LLC structure is so widely used. It allows non-residents to establish a legitimate US business presence, enter into contracts, invoice clients, and operate globally without relocating to the United States. As long as the business activity itself is lawful and not part of a restricted industry, ownership by a non-resident is fully permitted.
The legal framework around LLC ownership is intentionally flexible, which is why thousands of foreign entrepreneurs, freelancers, and online business owners form US LLCs every year while managing their businesses entirely from abroad.
Do LLC owners have to be US citizens?
No, LLC owners do not have to be US citizens. There is no requirement to hold US citizenship, permanent residency, or any type of US visa in order to own an LLC. Foreign nationals are treated the same as US persons when it comes to ownership rights under state LLC laws.
This also means that non-resident owners are not required to have a Social Security Number. While an SSN is commonly associated with US tax matters, non-residents can still obtain an Employer Identification Number for their LLC using alternative IRS procedures. The lack of an SSN does not prevent ownership, formation, or operation of a US LLC.
What matters is compliance, not citizenship. As long as the company is properly formed, required filings are made, and tax and reporting obligations are handled correctly, citizenship plays no role in determining whether someone can own an LLC.
Can you open an LLC without living in the US?
Yes, you can open and operate a US LLC without living in the United States at any point. Physical presence in the US is not required for formation, ownership, or day-to-day management. The entire process can be completed remotely, including filing formation documents, obtaining an EIN, and setting up banking with providers that support international founders.
The one legal requirement tied to location is the appointment of a registered agent. Every US LLC must have a registered agent with a physical address in the state where the company is formed. This agent acts as the official point of contact for legal and government correspondence, allowing the owner to remain abroad.
Many non-residents successfully manage their US LLCs from Europe, Asia, Latin America, or elsewhere, using digital tools and service providers to stay compliant. When set up correctly, living outside the US does not limit the ability to run a US company, but it does make proper setup and ongoing compliance especially important.
Taxes for non-resident LLC owners (what you really need to know)
Taxes are the area where most non-resident LLC owners feel the most uncertainty, and with good reason. US tax rules for foreign-owned LLCs are not based on ownership alone, but on how and where income is generated. Many non-residents assume that forming a US company automatically means paying US taxes, while others assume the opposite. In reality, the truth sits in between, and understanding the distinction is critical.
A US LLC itself does not automatically create a tax bill. What matters is whether the income is considered US-sourced and whether it is effectively connected to a US trade or business. Even when no tax is owed, reporting obligations almost always still apply, and this is where mistakes can become expensive.
What is the tax rate for a US LLC for non-residents?
There is no single flat tax rate that applies to all non-resident LLC owners. A US LLC is typically treated as a pass-through entity, meaning the company does not pay federal income tax at the entity level. Instead, taxation depends on the owner’s tax status and the nature of the income.
For non-residents, US tax exposure generally arises only when income is effectively connected with US business activity. If that threshold is met, the income may be subject to US federal income tax at graduated individual rates. If the threshold is not met, the income may not be taxable in the US at all, even though the LLC is registered there.
This is why two non-resident LLC owners with identical companies on paper can have very different tax outcomes. The determining factors are where the work is performed, how revenue is generated, and whether the business has a meaningful operational connection to the United States.
Who pays the 30% US tax?
The commonly referenced 30 percent US tax does not apply to all non-resident LLC owners, and it is often misunderstood. This rate generally relates to certain types of US-source passive income, such as interest, royalties, dividends, or other fixed or determinable income.
It does not automatically apply to operating business income earned through an LLC. In many cases, non-resident founders hear about the 30 percent rate and assume it applies to all revenue flowing through a US company, which is not accurate.
Whether this withholding tax applies depends on the type of income, where it is sourced, and whether tax treaties are in place between the United States and the owner’s home country. Misapplying this rule is one of the most common sources of confusion for foreign founders.
When non-residents do NOT owe US tax
Non-residents do not owe US federal income tax simply because they own a US LLC. If the business does not have a US physical presence, employees, or offices, and if the income is generated from activities performed outside the United States, that income may not be considered effectively connected with US business activity.
In such cases, the LLC can exist as a legal and operational vehicle without triggering US income tax. This is common for digital businesses, online services, and remote-first companies where all work is performed abroad.
However, not owing tax does not mean having no obligations. The IRS still expects accurate reporting, and the absence of taxable income does not eliminate filing requirements. This distinction is crucial and often overlooked by non-resident owners who assume that no tax automatically means no paperwork.
Reporting requirements (Form 5472, BOI)
Reporting is where compliance becomes non-negotiable. A single-member US LLC owned by a non-resident is required to file Form 5472 together with a pro forma Form 1120 each year. This filing reports the ownership relationship and any reportable transactions between the owner and the company, even if the company had no revenue or activity.
Failure to file Form 5472 can result in penalties starting at twenty-five thousand dollars. These penalties apply regardless of whether the LLC owed any tax, which is why this requirement is considered one of the highest-risk areas for foreign-owned LLCs.
In addition to IRS filings, most LLCs are now subject to Beneficial Ownership Information reporting. BOI reports disclose ownership and control information to US authorities and must be filed within strict deadlines. Missing these deadlines can also result in fines.
For non-residents, the challenge is not just understanding which forms apply, but ensuring they are filed correctly and on time every year. This is why many international founders rely on professional support to manage compliance and avoid unnecessary exposure.
Best states to register an LLC as a non-resident
Choosing the right state to register a US LLC is one of the most important decisions a non-resident founder will make. The state of formation affects initial filing costs, annual fees, privacy, reporting obligations, and how easily banks, payment processors, and partners interact with the company.
Non-residents are not required to form an LLC in the state where their customers are located, nor do they need any personal connection to the state. Because of this flexibility, international founders typically gravitate toward states that are known for predictable rules, low ongoing maintenance, and strong acceptance by US institutions. The goal is not just to register an LLC, but to choose a state that supports the business long term without creating unnecessary complexity.
Which state is best for non-resident LLCs?
There is no single best state for every non-resident LLC, but a small number of states consistently stand out for international founders. These states offer a combination of business-friendly regulations, reasonable costs, and familiarity among banks and service providers.
States such as Wyoming and Delaware are often preferred because they have well-established LLC laws, efficient filing systems, and a strong track record with foreign-owned companies. They are widely recognized by financial institutions, which reduces friction when opening bank accounts or onboarding payment processors.
The best state ultimately depends on the business model, future plans, and tolerance for compliance. What matters most is selecting a state that minimizes administrative burden while remaining credible and scalable as the business grows.
Cheapest states vs best long-term choice
Many non-residents initially focus on finding the cheapest state to register an LLC. While low formation fees can be attractive, they are rarely the most important factor. Some states advertise minimal upfront costs but impose higher annual fees, additional reporting requirements, or less predictable compliance rules over time.
The cheapest option on paper can become more expensive in practice if it creates banking issues, increases administrative overhead, or requires restructuring later. For non-residents, the long-term cost of mistakes often outweighs the short-term savings of a low filing fee.
A better approach is to evaluate total cost and complexity over the life of the company. This includes annual state fees, reporting obligations, ease of compliance, and how smoothly the LLC integrates with US financial systems. Choosing a state with a strong reputation and clear rules often results in fewer obstacles and lower overall risk, even if the initial cost is slightly higher.
Pros and cons of an LLC for non-residents
For non-residents, a US LLC can be a powerful business tool, but it is not without trade-offs. Understanding both the advantages and the limitations upfront is essential for making an informed decision. Many international founders focus only on the benefits, while the real problems usually arise from overlooking the downsides or misunderstanding how to manage them properly.
When evaluated realistically, an LLC remains one of the most flexible and accessible structures for non-residents, provided it is set up and maintained correctly.
Biggest benefits of a US LLC
One of the biggest benefits of a US LLC for non-residents is access. A US-registered company makes it significantly easier to work with American clients, invoice in US dollars, and use payment platforms such as Stripe or PayPal that are otherwise difficult or impossible to access from abroad.
Another major advantage is credibility. A US LLC signals legitimacy and professionalism, especially when dealing with international partners or customers who are more comfortable contracting with a US-based entity. This often shortens sales cycles and reduces friction in negotiations.
From a legal standpoint, an LLC provides liability protection by separating personal assets from business obligations. For non-residents operating internationally, this separation is critical and offers a level of protection that sole proprietorships or informal setups do not provide.
Flexibility is also a key benefit. LLCs have fewer formal requirements than corporations, are easier to manage remotely, and allow owners to adapt the structure as the business evolves. For founders who want to scale globally without relocating, this flexibility is often decisive.
Biggest disadvantages (and how to avoid them)
The biggest disadvantage of a US LLC for non-residents is compliance complexity. While forming the company is relatively simple, ongoing reporting obligations are strict and unforgiving. Missing a filing deadline or misunderstanding a reporting requirement can result in significant penalties, even when no tax is owed.
Another challenge is the tax learning curve. US tax rules for foreign-owned LLCs are nuanced, and assumptions based on local tax systems often do not translate well. Non-residents who rely on incomplete information or generic advice are more likely to make costly mistakes.
Banking can also be a point of friction. Not all banks or financial institutions are comfortable working with foreign-owned companies, and choosing the wrong setup early on can delay operations or require restructuring later.
Most of these disadvantages can be avoided with proper planning and professional support. Ensuring the LLC is formed in the right state, filings are handled correctly, and compliance is monitored year-round dramatically reduces risk. For many non-resident founders, the real disadvantage is not the LLC itself, but attempting to manage a US company without adequate guidance.
How to set up an LLC as a non-resident
Registered Agent
Stay compliant from day one
Get a compliant registered agent with a US address and never miss legal notices.
EIN without SSN
Get an EIN without a Social Security Number
Obtain an EIN as a non-resident, even if you don’t have a Social Security Number.
Banking & payments
Open banking and accept payments smoothly
Set up US banking and payment access so you can invoice clients and accept payments.
Ongoing compliance
Avoid penalties and stay fully compliant
Stay compliant with US filings and avoid penalties as your non-resident LLC grows.
Frequently Asked Questions about US LLCs for nonresidents
Starting and running a US LLC as a non-resident often raises practical and legal questions. Below you’ll find clear answers to the most common concerns around ownership, taxes, residency, and compliance, so you can move forward with confidence and avoid costly mistakes.
Yes, a non-US citizen can legally own a US LLC. There are no citizenship or residency requirements for LLC ownership in the United States. Non-residents can own 100 percent of an LLC and operate it remotely, as long as the business activity itself is legal and compliance obligations are met.
There is no single tax rate that applies to all non-resident LLC owners. US tax depends on whether the income is considered US-sourced and effectively connected to US business activity. In many cases, non-residents may not owe US income tax, but reporting requirements still apply.
The best state depends on your business model and long-term plans. Many non-residents choose states like Wyoming or Delaware due to predictable rules, reasonable costs, and broad acceptance by banks and payment platforms. The cheapest state is not always the best option long term.
No, you do not need to live in the United States to form or operate a US LLC. The entire process can be completed remotely. The only requirement is having a registered agent with a physical address in the state where the LLC is formed.
No, a Social Security Number is not required to own or form a US LLC. Non-residents can obtain an EIN without an SSN using alternative IRS procedures. This EIN allows the LLC to handle taxes, banking, and payment processing.
Filing incorrectly or missing required reports can lead to significant penalties, even if the LLC has no revenue or owes no tax. Some penalties start at twenty-five thousand dollars. This is why proper setup and ongoing compliance are critical for non-resident LLC owners.