How to set up a US LLC as a non-resident (2026): steps, tax & cost

Overview

For a location-independent founder, freelancer or e-commerce seller who lives outside the United States, a US LLC is one of the cheapest and most credible business vehicles in the world. It gives you a recognised US company, access to Stripe, PayPal, Amazon and US banking rails, and a clean legal wrapper — without needing a visa, a US partner or a foot on American soil. Most non-residents form in Delaware or Wyoming.

The catch is that 'US LLC' and 'tax-free' are not the same sentence. A single-member LLC owned by one foreign person is a disregarded entity: the LLC pays no US income tax and its profit flows straight to you. Whether that profit is taxed depends on where YOU are tax-resident and whether the business touches the US — not on the fact that the company is American. Get that wrong and you either overpay in the US or, more often, forget you owe tax at home.

Who it's for

A US LLC fits people who earn from clients or platforms rather than from US soil, and who want a stable, banked, English-language company. It suits far less well anyone who needs US immigration status (an LLC gives you none), or who plans to run a genuine US operation with staff, an office or inventory in a warehouse — that usually creates US taxable presence and a bigger filing burden.

• Freelancers, consultants and agencies serving non-US or global clients from abroad
• SaaS, digital-product and info-product founders who need Stripe or PayPal
• E-commerce and dropshipping sellers using non-US suppliers and fulfilment
• Nomads and expats who want a neutral, well-regarded company outside their home country
• Not for you if: you need a US work visa or green card (an LLC provides neither), or you'll have US employees, a US office or US warehoused stock — that likely creates US-taxable income

Types of company

Non-residents almost always choose an LLC, not a C-corporation. An LLC is flexible, cheap and — with a single foreign owner — taxed as a pass-through, so profit isn't taxed twice. A C-corp pays 21% federal corporate tax on worldwide profit and suits founders raising US venture capital, not solo operators. The practical choice is which state, and Delaware vs Wyoming is the usual fork.

Corporate tax & key taxes

A single-member LLC owned by one non-resident is not itself a taxpaying entity. The question is whether YOU, the owner, have US-source income that is 'effectively connected' to a US trade or business (ECI). If you have no US office, no US employees or dependent agent, and no US inventory, you generally have no ECI and owe no US federal income tax — even on large profit. If you do have ECI, you file Form 1040-NR and pay US tax at graduated rates (10%–37%). Verify your own facts with a cross-border tax adviser; ECI is fact-specific.

How to set it up, step by step

1. Pick a state — Wyoming or Delaware for most non-residents (see the comparison below).
2. Appoint a registered agent in that state; this is mandatory and provides your legal service address (~$50–$150/yr).
3. File the Articles of Organization / Certificate of Formation with the state and pay the filing fee (Wyoming $100, Delaware $110).
4. Get an EIN (tax ID) from the IRS — as a non-resident with no SSN you file Form SS-4 by fax or mail; allow a few days to several weeks.
5. Draft an operating agreement (even a single-member LLC should have one for banking and clarity).
6. Open a business bank or fintech account (Mercury, Wise, Relay and similar accept many non-resident LLCs; traditional banks are harder without US presence).
7. Set up your annual compliance: state annual report/franchise tax, plus the federal Form 5472 + pro-forma Form 1120 filing every year.

Costs & timeline

Both states keep member and manager names off the public registry — only the company name and registered agent are visible. Wyoming is cheaper long-term (about $60/yr vs Delaware's flat $300 franchise tax) and is the pragmatic pick for a small solo LLC. Delaware carries more prestige and the most developed business-court system, which matters if you'll raise money or expect complex contracts. Formation-service packages that bundle the filing, registered agent and EIN application typically run a few hundred dollars; verify current figures before you commit.

Substance, banking & the reality

The single most misunderstood point: a US LLC does not make you tax-free. You are taxed where you are tax-resident, and a company managed from your kitchen table in Spain, Germany or Colombia can be treated as tax-resident THERE under place-of-effective-management and controlled-foreign-company (CFC) rules — meaning your home country taxes its profit regardless of the American paperwork. Banking is also real work: fintechs onboard many non-resident LLCs, but they require a genuine business, proof of your identity and address, and can offboard risky profiles.

Common mistakes

• Believing 'US LLC = zero tax' and forgetting the tax you owe in your country of residence.
• Skipping Form 5472 + pro-forma 1120 — the $25,000 penalty applies even to a dormant, profit-free LLC.
• Trying to file the EIN application like a US person; non-residents with no SSN must use Form SS-4 by fax/mail.
• Assuming a US mailing address or agent creates US taxable presence — it usually doesn't, but running real operations from the US can.
• Ignoring CFC and place-of-effective-management rules at home, where the actual tax bill lives.
• Letting the state annual report or franchise tax lapse, which can dissolve the LLC and forfeit its good standing.
• Choosing Delaware on reputation alone when a cheaper Wyoming LLC would serve a solo founder better.