Do you have a business idea that you want to set up as an LLC (Limited Liability Company) in the United States? Or maybe you’re already running a business and you want to expand into the US market. Either way, setting up a US LLC can be a great way to protect your assets and gain credibility with customers.
But what if you’re not a US resident? Can you still set up an LLC? The answer is yes! We’ll show you how to set up a US LLC as a non-US resident from anywhere in the world.
Why Set up an LLC in the US
A Limited Liability Company or an LLC, is a type of hybrid business structure that enables owners to protect their personal assets from being used to satisfy company debts and obligations. For someone who is not a US resident, starting an LLC can help increase the odds of successful expansion in the United States by adding structure, legal security, and credibility. It also allows individuals to legally separate their company’s finances from their own.
An LLC can give an individual authority over financial decisions while protecting their unique interests and goals related to the venture. Setting up an LLC can also signify a commitment to long-term success and help provide access to outside sources of capital such as investment or loan opportunities. Overall, forming an LLC is an advantageous move for foreign residents who are looking to establish a presence in the United States and achieve business success.
Steps for setting up an LLC in the US as a Non-Resident:
As a non-US resident, you can set up an LLC in the US from anywhere in the world. Here are the steps to follow:
Step 1 – Select a State to Register Your LLC
If you are a non-US resident, it comes down to how you plan on running your business. If you plan on having an office, employees, or physical presence in the US, then you should form your LLC in that state which will be transacting business. However, if your business will have no physical presence in the US, then you can choose any state.
If you plan on carrying out your business in California, irrespective of where you form your LLC, you will need to either form an LLC in California or register your out-of-state LLC as a “foreign LLC”. It is wise to form an LLC in the state you wish to carry out your business to avoid paying fees in both states.
When deciding on the state in which to form your LLC, it is important to consider the laws that govern each state. Each state has its own regulations and governing bodies, and it is important to familiarize yourself with both. Additionally, some locations are more beneficial than others due to the tax burden or other legal considerations.
Step 2 – Choose a Registered Agent:
Choosing the right Registered Agent is key to staying on top of legal filings and maintaining compliance. A registered agent is someone who serves as the main point of contact between your business and the governmental agencies and ensures that they are up to date on filing paperwork, such as state tax forms or annual reports.
It is wise to select an experienced professional with first-hand knowledge of the legal requirements that you may need for your particular firm. You can select an individual who resides in the same state as the business entity or use a professional service provider. Consider opting for agents who specialize in your industry and have good customer feedback from previous clients.
In addition, make sure the agent has a good reputation with financial institutions and puts systems in place to keep track of all paperwork filed for your business. By hiring a good registered agent for your business, you can become stress-free and focus on the other aspects of your business.
Step 3 – Choose a Name for Your LLC:
The name you choose for your LLC business should be unique and reflect your business’s image, mission, and values as well. There are certain guidelines to help you create an appropriate name for your LLC business. The full legal name must indicate that it is associated with a limited liability company, such as by ending in “LLC”, which must appear on every document involving the company, as well as on promotional materials like signs and websites.
You should also make sure that your chosen name isn’t being used by another existing entity in your particular state or jurisdiction by querying the Secretary of State’s website or hiring a professional service to check. Also, picking a one-of-a-kind name that stands out from competitors, can give your brand a competitive edge, so use this opportunity to come up with something creative but still appropriate for your new LLC.
Step 4 – File Articles of Organization:
You will need to file Articles of Organization with the Secretary of State in the state where you want to register your LLC. The Articles of Organization contain basic information about your LLC such as its name, address, registered agent, and the names of its owners.
Depending on which state you form your LLC in, certain provisions may be required in order for you to legally form the company. When drafting this document it is important to follow all applicable laws thoroughly in order to ensure that everything regarding donation is up-to-date. Once properly drafted and filled out, they can be filed with the proper state government office with a fee if it applies.
Step 5 – Create an Operating Agreement for your LLC:
Operating agreements provide structure to the company and outline specific procedures that should be followed by the members and managers. Developing a detailed operating agreement can help protect the interests of everyone involved in the LLC and avoid potential disagreements by setting expectations early on. These agreements are also legally binding documents, so it’s important to have them in place.
Step 6 – Obtain an EIN:
An EIN (Employer Identification Number) is a unique nine-digit number that is issued by the IRS (Internal Revenue Service) to identify your LLC for tax purposes and helps identify and track businesses. An EIN allows businesses to apply for certain licenses and permits, open a business bank account, gain access to credit options, and issue payroll checks and other benefits offered only to IRS-registered businesses.
Applying for an EIN requires filling out a short online form which typically takes ten minutes or less. Once you register, you can receive your EIN immediately if using the I-Fax service, or in about four weeks by mail if you’d rather fill out a paper form provided by the IRS.
Step 7 – Open a US Business Bank Account:
To operate your LLC, you will need to open a US business bank account. For non-US residents looking to open an LLC, opening a US bank account can be a challenge as some banks may require you to have a US address, but there are some that don’t. Many banks require a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) before they let you open a bank account in the US.
You can either travel to the US to open your business bank account or open it online. For opening a US LLC bank account online, you will first have to find a bank that lets you create an account online. You will then have to submit the required documents, fill out the necessary paperwork, and maintain funds in your account. It is also mandatory to get a US phone number to create your LLC business bank account.
Step 8 – Obtain Necessary Licenses and Permits:
Depending on the nature of your business, you may need to obtain licenses and permits from federal, state, or local government agencies. A good place to start is by going to your state’s government website where you can find information regarding all the different licenses and permits that may need to be obtained.
It is suggested that you also check with your local chamber of commerce or economic development office because they may have specific industry standards that need to be met before proceeding. Finally, make sure to double-check all documentation concerning deadlines, fees, or other requirements connected with each license or permit before submitting your application.
Setting up an LLC is a great way to protect your investments and access lucrative US-based tax advantages as a non-US resident. However, being a non-US resident, this could be a complex process. It is recommended that you seek the help of a lawyer or a professional service provider to guide you through the process and ensure compliance with US laws and regulations.