Yes. In the United States, there are no laws mandating that anyone forming a Limited Liability Company (LLC) will have to be a citizen of the United States. It simply means that citizens of other countries can form and own a US-based LLC.
The nationality of an LLC’s business owner has little or no impact on who else can have ownership in the LLC. Also note that there are no restrictions on foreign entities and businesses forming, owning, and running an LLC in the US.
However, when there is a foreign owner or partner in an LLC, that individual is expected to obtain a US Taxpayer Identification Number (“ITIN”). This will have to be obtained if the LLC expects to engage in a US trade or business (i.e., if it will make money).
Laws in the country expect foreigners to pay taxes on any earnings accrued in the United States. Irrespective of immigration status, foreigners are allowed to form a company as long as they have registered for a Taxpayer Identification Number. The process to register is not tasking, but can be lengthy.
Steps to Form an LLC in the US as a Foreigner
Just as was noted above, a US LLC can be owned entirely by foreign persons. If as a foreigner you are looking to form and own a US-based LLC, here are steps to follow;
Choose a State
While looking to form an LLC in the United States as a foreigner, it is imperative you first choose a suitable state for the formation of the LLC. The choice you make here will be dependent on certain business factors. If, for instance, the business will have a physical presence or office in that specific state, then it is recommended that you form the LLC in that particular state.
This will help to avoid the need to register the LLC as a foreign LLC and the appointment of registered agents in different states.
Howbeit, if the business will not need a physical presence or office in the state, then it is recommended you form the LLC within states with no state taxes, at least to give your business the breathing room to deal only with US federal taxes. Some of the best states in the United States to consider include Wyoming, Delaware, and Nevada.
Select a Name for LLC
Note that every state in the United States institutes its own set of rules when it comes to the selection of names for LLCs. However, most often, the following guidelines will have to be adhered to when choosing a business name for LLC;
- The name will have to include the phrase “Limited Liability Company” or any of the abbreviations such as LLC or L.L.C
- There are certain legally restricted terms, words, and abbreviations you cannot include in your business entity name. These rules vary from state to state, but generally words and terms that indicate an entity type different from LLC, such as “Corporation” and “Corp.,” “Incorporated” and “Inc.,” and “Limited Partnership” is not allowed.
- Your LLC name cannot include words to indicate that your company is a governmental organization, such as “City,” “Township,” or “Federal.” You cannot include words that indicate your company is a bank, hospital, or insurance agency, like “Bank” or “Insurer” or “Trust,” unless you are in that industry.
- You are expected to check if the URL of the name you choose is available. You should check if the name of the business is available as a web domain. Even if you have no plans to have a website at the moment but it can be required in the future. Owing to that, it is important to buy the URL in case it is available to make sure that no one can acquire it later.
Hire a Registered Agent Service
As a foreigner looking to form an LLC in the United States, you will be expected to hire a registered agent. A good number of states in the country expect you to nominate a registered agent for the formation of an LLC.
Have it in mind that this registered agent will have to be a resident of that specified state in which the business will be carried on. This agent will be tasked with sending and receiving legal documents on your behalf. These legal documents may include legal summons, official documents, document fillings, etc.
File the LLC within the Selected State
To officially apply to form an LLC, you will have to complete and submit certain documents to the state. One of the important documents of this process is the Articles of Organization which is also known as Certificate of Organization or Certificate of Formation. The formation documents are expected to include the structure of the business.
While this is not mandatory in every state in the United States, it is really recommended you form an operating agreement for your US-based LLC. Note that this operating agreement is more or less a legal document that contains vivid details of the operating procedure and ownership of the LLC.
Obtain an Employee Identification Number (EIN)
In the United States, you will be expected to obtain an Employer Identification Number (EIN), especially since it is meant for tax purposes. The EIN will be considered as the Tax ID for the LLC. Note that you do not need an Individual Tax Identification Number (ITIN) or US Social Security Number (SSN) or a mailing address in the United States to obtain an EIN.
Howbeit, note that those identification numbers are needed for the IRS’s online process of application to obtain an Employer Identification Number. Also, note that there are other options for non-resident business owners who intend to apply via mail or fax.
Get a Physical Mailing Address in the United States
In almost every state in the United States, LLCs are expected to have a physical address in their state of formation, especially since it ensures that they can open a bank account in that specified state. Have it in mind that obtaining a physical office in the state where the business is expected to be formed is a sure way to get a physical mailing address.
Even if the business does not need to open a physical office, it will still need a mailing address in the state of the LLC. Numerous business services in the United States can help you set up a mailing address in the United States.
Obtain a Bank Account in the United States
Have in mind that opening a Bank account in the United States remains one of the most tasking parts of the formation of an LLC in the United States. Also, note that a bank visit is required as stipulated by the money laundering laws of the United States and since banks also need to know their clients.
This will warrant the foreigner traveling to the United States and this will involve obtaining the right visas. Note that opening a Business Bank account can be done once the formation of an LLC is done and Employee Identification Number is received.