Whether you are a resident or non-resident, forming a limited liability company (LLC) is one of the favorite options for entrepreneurs seeking to establish a business in the United States. While this specific business structure offers several benefits, it also has its fair share of challenges for non-resident entrepreneurs.
Read on for a full guide on how to open an LLC as a non-resident in the United States.
Forming a US Business as a Non Resident
Since its birth, America was established based on the principles of individual liberty and freedom of commerce. US law does not refrain foreign nationals or non-residents from owning businesses on American soil.
It is possible not to reside in the United States but still form a new company from scratch or purchase an existing US business. When compared to other business structures, a limited liability company (LLC) offers significant advantages to foreign-owned companies in terms of tax status and flexibility.
Guide on How to Open an LLC in USA for Non Resident – The Basics
Finding a Registered Agent
The first step for non-residents seeking to establish a US business is to find a registered agent. The role of a registered agent is to serve as a point of contact between the company and the state, receiving official legal documents on behalf of the business.
A registered agent can be an individual or organization located in the state where the non-resident wants to form a business, including a proper physical address. Neither a P.O. box nor any similar tool is accepted to replace a registered agent.
Filing Articles of Organization
The next step is to fill out the required paperwork to form the business entity. Each state has specific rules for LLC formation. For example, non-residents seeking to form an LLC in Florida must file Articles of Organization with the Department of State.
Once the forms are properly filled out, submitted, and processed, the LLC is officially created.
Obtaining an Employer Identification Number (EIN)
Also referred to as the “Tax Identification Number,” the Employer Identification Number (EIN) is a numerical ID issued by the Internal Revenue Service (IRS) to identify US businesses for tax purposes.
The easiest way to explain the EIN is to compare it to the social security number. Essentially, all the activities required to conduct an LLC will require an EIN, such as:
- Filing taxes
- Hiring US employees
- Opening a business bank account
- Obtaining business financing
Opening a Bank Account
One of the primary steps to preserve your limited liability as a member of an LLC is to never commingle personal funds with business funds. To avoid any future liabilities and ensure proper organization, it is fundamental to open a US bank account in the name of the business.
Please note that this step is often the most challenging for non-US residents. The best approach to shield the whole operation and ensure a successful outcome is to rely on the guidance of a well-versed business attorney.