How to Form a US LLC as a Non-Resident (2026 Complete Guide)

The US LLC has become the default entity for cross-border solo founders. The reasons are straightforward: pass-through taxation, limited liability, global payment processor compatibility, and the ability to open a US bank account. For a solo founder operating from Lisbon, Bali, or Bangkok, a US LLC provides access to infrastructure that many other entity types in other jurisdictions cannot match.

Formation has become remarkably accessible. A founder in any country can form a US LLC remotely, without visiting the US, often within a few business days. The process involves selecting a state, filing articles of organization, obtaining an EIN, and opening a bank account. Services like Stripe Atlas, Firstbase, and Doola have compressed this into a guided workflow.

But formation is the beginning of a structural position, not the entirety of it. The entity that results from formation is real. The structure around it — the tax position it creates, the compliance obligations it triggers, the documentation required to support the arrangement across jurisdictions — may not exist at all. The gap between what formation accomplishes and what the founder's cross-border situation actually requires is where structural risk begins to accumulate.

This article walks through each step of US LLC formation for non-residents, what each step actually establishes, and the structural characteristics that formation does not address.

Why a US LLC: the structural case

The US LLC occupies a particular position in the landscape of entity types available to cross-border founders. Its characteristics make it structurally distinct from alternatives.

Pass-through taxation. A single-member LLC is a disregarded entity for US federal tax purposes. The entity itself does not pay income tax. Instead, income passes through to the owner and is taxed at the owner's personal tax rate — wherever the owner is tax resident. For non-resident aliens with no US-source income, this structure can result in zero US federal income tax on the LLC's income. The structural implication: the LLC's tax treatment depends entirely on the owner's personal tax residency, not on where the LLC is formed.

Limited liability. The LLC creates a legal boundary between the owner's personal assets and the entity's obligations. This boundary exists as a matter of state law and is maintained through documentation and operational separation. The strength of this boundary depends not on the formation filing but on how the entity is operated after formation.

Banking and payment processor access. US-based payment processors — Stripe, PayPal, and others — generally require a US entity. A US LLC with an EIN can open accounts with Mercury, Relay, Wise Business, and other neobanks that serve non-resident founders. This banking access is often the primary practical reason for forming the LLC.

Comparison with alternatives:

| Entity Type | Tax Treatment | Liability Protection | US Banking Access | Formation Complexity | |---|---|---|---|---| | US LLC (single-member) | Pass-through to owner | Yes | Full access | Low | | US C-Corp | Corporate tax + dividend tax | Yes | Full access | Moderate | | Home country entity | Varies by jurisdiction | Varies | Limited for US services | Varies | | Estonian OU | Corporate tax on distribution | Yes | EU banking, limited US | Low-moderate |

The C-Corp creates a separate tax entity that pays its own income tax. For solo founders not seeking venture capital, this generally results in double taxation — once at the corporate level and once when profits are distributed. The LLC avoids this through pass-through treatment.

A home country entity may be the simplest option for founders who operate primarily in their home jurisdiction. But for founders who need US banking access, US payment processor compatibility, or who serve primarily US-based clients, the US LLC provides infrastructure access that a foreign entity often cannot match.

The structural observation: the US LLC is not inherently superior. It is structurally suited to a specific set of circumstances — cross-border operations that require US financial infrastructure. The question is whether those circumstances match the founder's actual situation.

Step by step: state selection

US LLCs are formed at the state level. Each state has its own filing requirements, fees, privacy rules, and legal framework. For non-resident founders, three states dominate: Delaware, Wyoming, and New Mexico. The choice between them involves trade-offs that are worth mapping before filing.

State comparison

| Factor | Delaware | Wyoming | New Mexico | |---|---|---|---| | Formation fee | $90 | $100 | $50 | | Annual fee / franchise tax | $300/year | $60/year | $0 | | Privacy (member names public?) | No | No | No | | State income tax on LLC | None for non-residents | None | None for non-residents | | Court system | Chancery Court (specialized) | Standard | Standard | | Registered agent required | Yes | Yes | Yes | | Typical use case | Venture-backed, investor-expected | Solo founders, cost-conscious | Lowest cost formation |

Delaware is the most commonly cited state for formation. Its Chancery Court system specializes in business disputes, and its body of corporate law is the most developed in the US. For C-Corps seeking venture capital, Delaware is the standard. For single-member LLCs operated by non-residents, Delaware's primary advantage is familiarity — formation services default to it, and banks recognize it without question. The disadvantage is cost: the $300 annual franchise tax is the highest among the three options.

Wyoming has positioned itself as a competitor to Delaware for LLCs specifically. No state income tax, low annual fees, and strong asset protection statutes. For solo founders who do not anticipate investor scrutiny or complex corporate governance needs, Wyoming offers lower ongoing costs than Delaware with functionally equivalent protection.

New Mexico is the lowest-cost option. No annual report or franchise tax for LLCs. Formation costs are minimal. The trade-off is that New Mexico is less recognized by banks and formation services — some neobanks process New Mexico LLCs more slowly or with additional documentation requirements. The structural adequacy of the entity is identical; the practical friction during banking and account setup may differ.

The structural observation: for a single-member LLC operated by a non-resident, the state of formation has minimal impact on the entity's legal protection or tax treatment. The differences are primarily in cost, privacy, and the practical ease of subsequent steps like banking. None of these states impose income tax on LLC income earned by non-residents from sources outside the state.

Registered agent: what it is and why it is required

Every US LLC is required to have a registered agent in the state of formation. The registered agent is a person or entity with a physical address in that state who is authorized to receive legal documents and official correspondence on behalf of the LLC.

This is not optional. If the LLC does not maintain a registered agent, the state can administratively dissolve the entity. For non-resident founders who have no physical presence in the US, a commercial registered agent service is the standard solution.

What a registered agent does:

• Receives service of process (lawsuits, legal notices) on behalf of the LLC
• Receives official correspondence from the state (annual report notices, tax notices)
• Forwards documents to the LLC's mailing address

What a registered agent does not do:

• File taxes or annual reports
• Maintain compliance on behalf of the LLC
• Provide legal or tax advice
• Monitor the LLC's standing with the state

Commercial registered agent services generally cost between $50 and $300 per year. Services like Northwest Registered Agent, Incfile, and ZenBusiness offer standalone registered agent service. Formation services like Stripe Atlas, Firstbase, and Doola include a registered agent in their package, sometimes for the first year only — with renewal fees afterward.

The structural characteristic to note: if the registered agent lapses, the LLC can lose good standing with the state. This can cascade into banking issues, payment processor issues, and the inability to file required documents. The registered agent is a recurring obligation, not a one-time setup step.

EIN application: the process for non-residents

An EIN (Employer Identification Number) is the entity's tax identification number, issued by the IRS. It is required for opening a bank account, filing tax returns, and onboarding with payment processors. For US residents, EIN application is an online process that takes minutes. For non-residents, the process is different.

The non-resident EIN process:

Non-residents without a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) cannot use the IRS online application. The available methods are:

1. Fax: Complete Form SS-4, fax it to the IRS at the designated international number. Response time is generally 4-6 weeks, though it can be longer.

2. Phone: Call the IRS Business & Specialty Tax Line. The applicant (or an authorized third party) provides the information from Form SS-4 over the phone and receives the EIN immediately during the call. This is the fastest method but requires calling during IRS business hours (Eastern Time) and navigating the phone system.

3. Third-party services: Formation services and registered agents often handle EIN application as part of their package. The timeline depends on the provider's process — some use the phone method and deliver the EIN within days; others use fax and take weeks.

Common issues:

• Responsible party identification. Form SS-4 requires a "responsible party" — the individual who controls, manages, or directs the entity. For a single-member LLC, this is the owner. The IRS requires a foreign address for the responsible party if they are not in the US.

• ITIN confusion. An ITIN is not required to obtain an EIN for an LLC. The EIN is for the entity; the ITIN is for the individual. Some formation services conflate these, creating unnecessary delays.

• Fax failures. The IRS fax system is unreliable. Faxes are sometimes lost, and there is no confirmation of receipt. Following up requires calling the IRS, which involves significant hold times.

• Name matching. The name on the SS-4 has to match the entity name exactly as it appears on the state filing. Discrepancies — even minor ones like punctuation differences — can result in rejection.

The structural observation: the EIN is the gateway to US financial infrastructure. Without it, the LLC cannot open a bank account, accept payments through US processors, or file taxes. For non-residents, the EIN application process is the most common bottleneck in the formation sequence.

Banking as a non-resident: opening the account

With a formed LLC and an EIN, the next step is opening a business bank account. For non-resident founders, the available options are primarily neobanks that have built processes for remote account opening without a US physical presence.

Primary options for non-resident founders:

| Factor | Mercury | Relay | Wise Business | |---|---|---|---| | Entity requirement | US LLC or Corp | US LLC or Corp | Varies (multi-entity) | | In-person required | No | No | No | | Currencies | USD | USD | Multi-currency (50+) | | FDIC insured | Yes (via partner banks) | Yes (via partner banks) | Not FDIC; safeguarded funds | | International transfers | Via wire transfer | Via wire transfer | Native multi-currency | | Integrations | Extensive (QuickBooks, etc.) | Good (QuickBooks, Xero) | Limited | | Interest on deposits | Yes (Treasury) | No | Yes (some currencies) | | Typical approval time | 1-5 business days | 1-5 business days | 1-3 business days |

Mercury is the most commonly used neobank among non-resident LLC founders. The application process is online, requiring the Articles of Organization, EIN confirmation letter, a government-issued ID, and information about the business. Mercury has been tightening its review process — some non-resident applications now face additional documentation requests or longer review periods, particularly for newly formed entities with no revenue history.

Relay serves a similar market segment but is less commonly used by non-resident founders. The account opening process is comparable to Mercury's. Relay's distinguishing features are profit-first banking categories and team account management, which are more relevant for businesses with employees or contractors.

Wise Business operates differently. Wise is not a bank — it is an electronic money institution. Funds are safeguarded but not FDIC-insured. The advantage for cross-border founders is native multi-currency support: receiving payments in USD, EUR, GBP, and other currencies without conversion fees on receipt. Wise also provides local bank details in multiple countries, which can simplify receiving international payments.

What triggers banking review for non-residents:

• Entity formed recently with no operating history
• Beneficial owner located in certain jurisdictions
• Transaction patterns inconsistent with declared business purpose
• High volume of international transfers relative to domestic activity
• Inconsistencies between the application and publicly available information

The structural observation: bank account approval for non-residents is not guaranteed. The approval process involves KYC (Know Your Customer) and AML (Anti-Money Laundering) checks that evaluate the entity, the beneficial owner, and the declared business purpose. Rejection or additional review is common for newly formed entities with non-resident owners. Having clear documentation of what the business does, who the clients are, and how revenue is generated improves the process — but does not eliminate the possibility of review.

For a deeper structural analysis of non-resident banking patterns, see Non-Resident Banking: Structural Fragility You Can't See from the Dashboard.

What formation services cover vs what they do not

Formation services have compressed the LLC creation process into a streamlined product. Each service bundles slightly different components.

| Feature | Stripe Atlas | Firstbase | Doola | DIY | |---|---|---|---|---| | Entity type | C-Corp (default) | LLC or C-Corp | LLC or C-Corp | Any | | State | Delaware | Delaware or Wyoming | Wyoming or Delaware | Any | | Articles of Organization/Incorporation | Included | Included | Included | You file | | EIN | Included | Included | Included | You apply | | Registered agent | Included (1 year) | Included | Included | You arrange | | Operating agreement | Template | Template | Template | You draft | | Bank account | Mercury/SVB | Partner banks | Partner banks | You apply | | 83(b) election (C-Corp) | Template | N/A | N/A | N/A | | Bookkeeping | No | No | Add-on | No | | Tax filing | No | No | Add-on | No | | Compliance calendar | No | No | Partial | No | | Cost | $500 | $399-599 | $297-597 | $50-200 |

Stripe Atlas defaults to a Delaware C-Corp, not an LLC. This is worth noting — for solo founders who do not intend to raise venture capital, the C-Corp structure introduces corporate income tax that the LLC avoids. Atlas has expanded to support LLCs, but the default path and most of the documentation assume C-Corp formation.

Firstbase offers more flexibility in entity type and state. The product is positioned toward non-US founders specifically, with documentation and support oriented toward the non-resident formation process.

Doola has built its product around ongoing compliance in addition to formation. Bookkeeping and tax filing add-ons are available, which is structurally relevant for founders who lack access to US-based accountants.

For a detailed analysis of what these services provision versus what they leave unaddressed, see Stripe Atlas vs Firstbase vs DIY: What They Structure and What They Don't.

The structural observation across all services: formation services create an entity. They do not create a structure. The entity has a name, a state of registration, a tax ID, and a registered agent. What the entity means — how it interacts with the founder's tax residency, what reporting obligations it triggers, what documentation is required to maintain the arrangement — is not part of any formation service's scope.

The 80% formation does not cover

Formation addresses approximately 20% of a cross-border solo founder's structural position. The remaining 80% involves dimensions that exist independently of how the entity was created.

Tax residency interaction. The LLC's income passes through to the owner. Where the owner is tax resident determines where that income is taxed. A founder who is tax resident in Germany with a Wyoming LLC owes German tax on the LLC's income. The LLC formation process does not assess, document, or address this relationship. See Digital Nomad Tax Residency Guide 2026 for a detailed examination of how tax residency works across jurisdictions.

FBAR and FATCA reporting. US persons (citizens, permanent residents) who own or control foreign financial accounts with aggregate balances exceeding $10,000 at any point during the year are required to file an FBAR (FinCEN Form 114). Non-US persons who own a US LLC may have FATCA reporting obligations depending on their country's intergovernmental agreement with the US. These obligations attach to the person, not the entity, and are not addressed by formation services.

Permanent establishment risk. A non-resident founder who operates a US LLC while living and working in another country may create a permanent establishment in their country of residence for the LLC. This can trigger corporate tax obligations for the LLC in that country — on top of the personal income tax the founder already owes. The PE analysis depends on the founder's specific activities, the treaty between the US and the country of residence, and the domestic law of the country of residence. Formation services do not assess PE risk.

Transfer pricing. Founders who operate multiple entities — a US LLC and a home country entity, for example — need documentation that supports the pricing of intercompany transactions. Without transfer pricing documentation, tax authorities in either jurisdiction can reclassify income, potentially resulting in double taxation. Formation services create individual entities; they do not document the relationship between entities.

Compliance calendar. After formation, the LLC has recurring obligations: annual report filings (in most states), franchise tax payments (in Delaware), registered agent renewals, and potentially BOI (Beneficial Ownership Information) reporting. Missing these deadlines can result in penalties, loss of good standing, and cascading effects on banking and payment processing. Formation services may remind founders of these obligations but do not manage them.

Operating agreement adequacy. Formation services provide a template operating agreement. For a single-member LLC, this template is often a generic document that does not reflect how the business actually operates. The operating agreement defines the governance structure, distribution policies, and operational procedures of the LLC. If the template does not match actual operations — and it usually does not after the business has been running for a year — the document provides a weaker foundation for the entity's separate legal identity.

What this means for your structure

Forming a US LLC as a non-resident is mechanically straightforward. The steps are well-documented, the services are mature, and the timeline is measured in days or weeks. The entity that results is a legitimate legal construct with real utility — banking access, payment processor compatibility, liability protection.

The structural gap is not in the formation process. It is in the distance between what formation creates and what the founder's cross-border situation requires. Formation creates an entity. The founder's structural position encompasses that entity plus their personal tax residency, plus the jurisdictions they operate in, plus the reporting obligations triggered by the combination of these factors, plus the documentation that connects all of it.

No formation service bridges this gap. Not because of a product failure, but because the gap exists at a different level — at the intersection of entity structure, personal circumstance, and multi-jurisdictional obligations. These are characteristics of the founder's situation, not of the entity.

The observation is not that LLC formation is insufficient. It is that formation is the first step in a structural position that extends well beyond it — and that the moment after formation is the moment when the structural questions begin.

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Visual: LLC Formation Process and Structural Gap

Key Takeaways

• The US LLC provides pass-through taxation, liability protection, and US banking access — making it the default entity for cross-border solo founders, though it is structurally suited to specific circumstances rather than universally optimal.
• State selection (Delaware, Wyoming, New Mexico) has minimal impact on legal protection or tax treatment for single-member LLCs operated by non-residents — the differences are primarily in cost, privacy, and practical friction during banking setup.
• EIN application for non-residents without an SSN or ITIN requires fax or phone to the IRS, creating the most common bottleneck in the formation sequence — the online application is not available to non-residents.
• Formation services (Stripe Atlas, Firstbase, Doola) create a legal entity — they do not create a structure; the tax position, compliance obligations, PE risk, and documentation that constitute the founder's structural position are not addressed by any formation service.
• The 80% of structural position that formation does not cover — tax residency interaction, FBAR/FATCA, permanent establishment risk, transfer pricing, and compliance calendar — exists independently of how the entity was created and begins accumulating from the moment the entity is formed.

References

• IRS: Apply for an Employer Identification Number (EIN) Online — IRS EIN application process and Form SS-4 instructions
• Wyoming Secretary of State: LLC Formation — Wyoming LLC formation requirements and filing process
• IRS: Classification of Taxpayers for U.S. Tax Purposes — IRS guidance on entity classification and pass-through treatment
• FinCEN: Beneficial Ownership Information Reporting — BOI reporting requirements under the Corporate Transparency Act

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