If you’re an entrepreneur, freelancer, or own an online business, forming an LLC (Limited Liability Company) in the United States can be an excellent way to protect your assets and operate more efficiently. In this article, we’ll guide you step by step through the entire process, explaining what an LLC is, how to create one, its advantages and limitations, the most recommended states, and much more. Keep reading!
What is an LLC?
An LLC is a business structure that combines the limited liability of a corporation with the flexibility of a sole proprietorship or partnership. It’s especially popular among entrepreneurs because it protects the personal assets of the owners (members) from the company’s debts and legal actions.
Key Features of an LLC:
Limited Liability: Members are not personally responsible for the company’s debts or legal actions.
Tax Flexibility: You can choose how your company is taxed (as a disregarded entity, partnership, or corporation).
Simple Management: Fewer requirements than a traditional corporation.
Access to Financial Services: You can open U.S. bank accounts and use platforms like Stripe, PayPal, Amazon FBA, and others.
Ideal for Non-Residents: Allows you to operate a business in U.S. dollars without living in the United States.
Now that you understand the basics of LLCs, let’s go over the key restrictions you should consider before setting one up.
Forming an LLC (Limited Liability Company) in the United States can be an excellent way to protect your assets and operate more efficiently.
LLC Restrictions
The restrictions for operating an LLC outside the U.S. are divided into two categories: by type of business and by country of origin.
Restrictions by Type of Business
If you want to operate an LLC outside the United States, your business should be related to online or non-territorial products or services, such as:
E-commerce
Online courses
Digital products
Online consulting
Marketing
Services
Trading and brokerage
If your business is territorial, like a real estate agency or restaurant, it will not be possible to operate the entire activity through an LLC. However, you can use it for part of your business structure. If you want to learn more, leave a like — if we reach 1,000, we will make a video explaining this in detail.
Restrictions by country of origin
The restrictions are not related to forming the LLC itself, but to obtaining the EIN (Employer Identification Number), which is required to operate in the U.S. Some countries with restrictions at fintech banks like Mercury or Relay are:
Cuba
Venezuela
Nicaragua
What options do you have if you are from one of these countries?
Not all is lost. Fortunately, there are other alternatives:
Exchanges like Wise or Payoneer:
If you are Venezuelan, for example, you can use a Colombian ID and a proof of address from Colombia to access Wise. Payoneer also accepts Venezuelans, although with some additional restrictions.
Traditional banks:
You can open a traditional bank account in the U.S. if you travel to the country and have an ITIN (Individual Taxpayer Identification Number) or a valid passport. This will allow you to operate your business without restrictions.
VulpeInc offers traditional bank account options for some countries, although with certain limitations. If you are Venezuelan, for example, many banks do not allow remote account openings. However, we have alternative solutions, including some options with Zelle.
Banks in the U.S. and how to choose the right one
It’s important to understand that not all banks are suitable for every client. If your operation doesn’t meet certain bank requirements, you may not be accepted. However, at VulpeInc, we have access to more than 12 traditional banks in the U.S., some with Zelle, that allow remote account openings without the need to travel.
If you want to operate outside the U.S., we also offer LLC formation in the United Kingdom, Hong Kong, Switzerland, and other countries. However, it’s important to note that some banks, like Swiss banks, require a high initial deposit.
Which states are best to form an LLC?
There are different types of LLCs: regular and anonymous. The main difference is that in anonymous LLCs, the members’ names do not appear in formation documents, offering greater privacy.
States that offer anonymous LLCs:
Delaware: Famous for its legal and tax system, especially for protecting intellectual property.
New Mexico: Offers low fees and the option to form anonymous LLCs.
Wyoming: Also known for allowing anonymous LLCs and having reduced fees.
Recommended states for regular LLCs:
Florida: With reasonable fees and good bank acceptance, Florida is ideal for those seeking ease in opening accounts and operating in the U.S.
Each state has different formation and maintenance fees. For example:
Delaware charges a formation fee of 200 USD and an annual report fee of 300 USD.
New Mexico has a formation fee of 50 USD and does not require an annual report.
Wyoming charges 102 USD for formation and 62.50 USD for the annual report.
Tax Considerations: ETBUS
ETBUS (Engaged in a Trade or Business in the U.S.) is a key term you need to understand. You are only required to pay U.S. taxes if:
You have at least one dependent agent in the U.S. performing substantial activities to promote your business.
You operate through a permanent establishment (for example, an office in the U.S.).
If you do not meet these conditions, you will be classified as NON-ETBUS and will not be required to pay U.S. taxes — though you will still need to file your tax return annually.
Requirements to Form an LLC as a Non-Resident
To form an LLC in the U.S. as a non-resident, you will need:
U.S. address (a real address, not virtual).
Valid passport.
ITIN (if applicable).
Email and phone (preferably a U.S. number).
It’s important to note that we do not recommend using services like Bizee, Northwest, or Rocket Business if you are outside the U.S., as these services are designed for U.S. residents and do not handle EIN procedures for foreigners correctly.
At VulpeInc, we offer a specialized service for international clients, including obtaining the EIN within 10 to 15 business days.
Payment Gateways for Your LLC
If you want to accept online payments, you will need to set up your account on platforms such as:
Stripe: Requires an LLC, EIN, partners’ passports, and a U.S. phone number.
PayPal: An ITIN and an LLC with at least two members are required.
Shopify Payments: Like Stripe and PayPal, it requires an ITIN, passport, and a U.S. phone number.
How to Keep Your LLC Active
An LLC does not require monthly filings, but if your operation is large or has many transactions, we recommend a bookkeeping service to organize your finances and simplify tax reporting. This will help keep your business in order and make it easier to access credit.
Conclusion
Having an LLC is an excellent strategy for entrepreneurs who want to operate more efficiently, protect their assets, and benefit from a flexible tax system. At VulpeInc, we specialize in providing personalized solutions for each client, helping you form and maintain your LLC without complications. If you are ready to take the next step, contact us today and let us know which country you are from!
Frequently Asked Questions
Can I open a U.S. LLC even if I’m not a resident?
Yes! Anyone, whether a resident or not, can open an LLC in the U.S. However, non-residents must meet some additional requirements, such as having a valid U.S. address, an up-to-date passport, and in some cases, an ITIN. Additionally, the LLC must be tied to an online or non-territorial business activity.
What types of businesses can operate through an LLC?
LLCs are ideal for online or non-territorial businesses, such as:
E-commerce
Online courses
Digital products
Online consulting
Marketing
Brokerage services, trading, and more.
However, if your business is territorial, like a restaurant or real estate agency, it won’t be possible to operate the entire activity through an LLC. You can use it only for part of your operations. If you want to learn more, contact us.
How can I open a bank account for my LLC without being in the U.S.?
To open a U.S. bank account, non-residents can choose to:
Use fintechs like Mercury or Relay, although some countries with restrictions (like Cuba, Venezuela, and Nicaragua) may face limitations.
Use platforms like Wise or Payoneer, which accept documents from other countries for identity verification.
Open an account at a traditional U.S. bank by traveling in person and presenting the necessary documentation (ITIN, lease agreement, etc.).
Which states are best for forming an LLC?
The most popular states to form an LLC in the U.S. include:
Delaware: Ideal for companies seeking copyright protection or investors. The formation process can be more expensive.
New Mexico: Low formation cost and no annual fees. It also allows anonymous LLCs.
Wyoming: Preferred by those seeking full anonymity. It has affordable formation fees and low maintenance costs.
Florida: Excellent for those who want ease in opening bank accounts and access to fintechs.
Each state has its own advantages and costs, so the choice depends on your needs and the type of business.
What is “ETBUS” and how does it affect my U.S. taxes?
“ETBUS” stands for “Engaged in a Trade or Business in the U.S.” and refers to activities that involve you significantly in the U.S. If you do not have a permanent establishment or a dependent agent in the country, you will be considered “NON-ETBUS” and will not owe U.S. taxes. Otherwise, you will need to pay taxes on your income, although some countries have double taxation treaties that may exempt you.
What documents are required to open an LLC?
The basic required documents are:
Updated passport
U.S. address (not virtual)
Email and phone number (preferably a U.S. number)
In some cases, an ITIN (if you plan to open a U.S. bank account)
If you don’t have a U.S. address in your name, you’ll need a business address service accepted by banks.
Can I use an LLC to sell physical products in the U.S.?
Yes! LLCs are ideal for e-commerce, where you can sell physical products in the U.S. through platforms like Amazon FBA, Shopify, and others. Make sure you have all documents and a valid U.S. bank account to receive payments.
How can I obtain an EIN for my LLC?
The EIN (Employer Identification Number) is essential for operating your LLC and opening a U.S. bank account. You can apply directly to the IRS, but if you are a non-resident, it’s highly recommended to use a specialized service to speed up the process. At VulpeInc, we issue EINs within 10 to 15 business days.
What are the costs to open and maintain an LLC?
The costs vary depending on the state and type of LLC:
Delaware: $200 to form + $300 annual report.
New Mexico: $50 to form, no additional annual fees.
Wyoming: $102 to form + $62.50 annual fee.
Florida: $155 to form + $138.50 annual report.
Delaware: $200 to form + $300 annual report.
New Mexico: $50 to form, no additional annual fees.
Wyoming: $102 to form + $62.50 annual fee.
Florida: $155 to form + $138.50 annual report.
Additionally, each state charges extra fees for changes, such as address updates or adding members.
Can I open an LLC using services like Incfile or Rocket Lawyer?
Although platforms like Incfile, Bizee, or Northwest are well-known, they are not always ideal for foreigners. Most were designed for U.S. residents and do not provide proper support for EIN issuance or bank account setup. At VulpeInc, we offer specialized services for non-residents, ensuring your LLC is fully functional and legally ready to operate.
How long does it take to open an LLC?
The timeframe varies depending on the state and type of service used:
Delaware: 2 to 3 months (without expedited service).
New Mexico: Usually quick, 1 to 2 weeks.
Wyoming: About 1 to 2 weeks.
Florida: 1 to 2 weeks.
At VulpeInc, we offer an expedited service that can significantly speed up the process.
