How to Open a US LLC as a Non-Resident (Step-by-Step Guide for Foreigners) — Transcript

Full transcript

1. 0:00If you're looking to open your own US
2. 0:02LLC as a non- US resident, you're at the
3. 0:04right place. I'm going to show you the
4. 0:06exact step-by-step process to legally
5. 0:08form a US LLC as a foreigner. And I'm
6. 0:11going to walk you through everything.
7. 0:12Choosing the right state, using the
8. 0:14right registered agent, obtaining your
9. 0:16EIN number as a non-resident, and also
10. 0:18the tax requirements you need to know
11. 0:20about. I will be completely transparent
12. 0:21about the cost, the timeline, and what
13. 0:24documents you're going to receive at the
14. 0:26end of the process. And I'm not a US
15. 0:28citizen, but I set up my own Wyoming LLC
16. 0:30from abroad, and it's fully compliant. I
17. 0:33opened the US bank account with it. I
18. 0:35use it for Amazon FBA, Tik Tok shop, and
19. 0:37even for Google AdSense. So, let's dive
20. 0:40right into the video. All right, so the
21. 0:41first decision you need to make is which
22. 0:43state you're going to form your LLC in.
23. 0:45And technically, you can register in any
24. 0:47state, but if you're a non- US resident,
25. 0:49only three options really make sense.
26. 0:52Wying, Delaware, and New Mexico. And the
27. 0:55factors down here that are most
28. 0:56important are first that the LLC acts as
29. 0:59a pass through entity. So we have to pay
30. 1:010% state income tax. Two strong privacy
31. 1:05protection meaning that your name as the
32. 1:06owner doesn't appear on any of the
33. 1:08public records and low annual fees as we
34. 1:11want to pay as little as possible for
35. 1:13our state filings and annual reports. So
36. 1:16these three states are most friendly for
37. 1:18internationals who just need a clean,
38. 1:20lowmaintenance US business structure.
39. 1:22So, let's go ahead and compare these
40. 1:23three states so you know which one fits
41. 1:26you the best. First, we have Wying. And
42. 1:28the annual fees are $60 per year. They
43. 1:30have very simple compliance. You just
44. 1:32need to file a short annual report
45. 1:34online. They have excellent privacy.
46. 1:36Members and managers are not listed
47. 1:38publicly. So, overall, it has low cost,
48. 1:40low hassle. It's very reliable and
49. 1:42widely recognized. Then we also have
50. 1:44Delaware. They have flat franchise tax
51. 1:46of $300 per year, which is a bit more
52. 1:48than on Wying. There's slightly more
53. 1:50paperwork, but still quite
54. 1:52straightforward. And this is chosen
55. 1:54mostly by startups or companies planning
56. 1:56to raise investment later. So, it has
57. 1:58more of that corporate prestige, but
58. 2:00you're paying for it. Last, we have New
59. 2:02Mexico. And this one is heavily
60. 2:03overlooked. They have no annual reports
61. 2:05and no annual fees at all, which
62. 2:07Delaware and Wying do have. The privacy
63. 2:10is just as strong as in Wying. There's
64. 2:12no public record for owners of the
65. 2:14company. However, it's less recognized
66. 2:16internationally and some banks or
67. 2:18payment processors might not be as
68. 2:20familiar with it. But overall, it's a
69. 2:22pretty good alternative option to
70. 2:23Wyoming. So, bottom line, if you're
71. 2:25running a simple online business or
72. 2:27freelancing, Wying is your best pick. If
73. 2:30you're building a startup that might
74. 2:31seek investors later, you can go with
75. 2:33Delaware. And if you want the absolute
76. 2:34lowest ongoing cost and maximum privacy,
77. 2:37New Mexico is worth considering. Now,
78. 2:39for this tutorial, I'm going with Wying
79. 2:41because it's the easiest, the most
80. 2:43balanced option for non- US residents
81. 2:45and it's the one that I personally use
82. 2:47as well. Then we come to the next step
83. 2:49and that is using a registered agent and
84. 2:51a registered agent is basically your
85. 2:53official representative in the state
86. 2:55where your company is formed. Now the
87. 2:57role of them is that the registered
88. 2:59agent is your official US
89. 3:00representative. They receive all legal
90. 3:02and government mail for your LLC. And
91. 3:05this is required as every US LLC has to
92. 3:08list a physical address in the state.
93. 3:10And as a non- US resident, this part is
94. 3:12completely mandatory because you
95. 3:14obviously do not have a physical
96. 3:16presence or address in the US yourself.
97. 3:18And what they do in short is they keep
98. 3:20your personal info private. They ensure
99. 3:22you never miss official mail and they
100. 3:24make your LLC legally compliant in the
101. 3:27state. Now, there are quite a few
102. 3:28registered agent service out there, and
103. 3:30you're completely free to choose any one
104. 3:32you like. It doesn't have to be the same
105. 3:34one that I use. But that said, I
106. 3:36personally went with Northwest
107. 3:37Registered agent. And honestly, they
108. 3:39have been really good. They've handled
109. 3:41everything professionally. Plus, their
110. 3:43pricing is very reasonable, especially
111. 3:45for non-residents. So, if you want to
112. 3:47follow along with me, I left the link
113. 3:49down in the description. It'll take you
114. 3:50straight to the signup page, and it also
115. 3:52save you over $200 on the filing. And of
116. 3:55course, it also helps support the
117. 3:57channel. Once you're there, you're going
118. 3:58to see $39 business formation service.
119. 4:01So, let's click let's get you started.
120. 4:03This is then going to take you to the
121. 4:04page where you can start the LLC
122. 4:06formation process. Now, the first thing
123. 4:08they're going to ask is ask what type of
124. 4:10business you would like to start. Now,
125. 4:12obviously, for this, you're going to
126. 4:13want to select an LLC. There are also
127. 4:15options for a corporation or nonprofit,
128. 4:18but we're going to keep it simple and
129. 4:19simply stick with the LLC. Then, down
130. 4:21here, they ask where would you like to
131. 4:23form your business? And this is where
132. 4:24you select the state. Obviously for us,
133. 4:26we're going to scroll all the way down
134. 4:28and click on Wyoming. Once you select
135. 4:30Wyoming, you're going to see the pricing
136. 4:32breakdown right here on the right side
137. 4:33of the screen. You'll see the basic
138. 4:35package cost right here of $39, the
139. 4:37processing fees in Wyoming, $104, and
140. 4:40then the total cost of $143. So, that's
141. 4:43a pretty good deal, but please note, we
142. 4:45also need an EIN number, which I'll show
143. 4:47you later, to show the full picture of
144. 4:49the pricing. Now, we simply click
145. 4:51continue right here. Now you need to
146. 4:53enter your company name and this is the
147. 4:54official legal name of your LLC. So make
148. 4:57sure you choose something that's not
149. 4:58already taken. I'm going to choose
150. 5:00Studio Hassel and then add LLC at the
151. 5:04end. And then for the second question,
152. 5:05send a copy of lawsuits and legal
153. 5:07notices to your attorney. This is going
154. 5:09to be left at no. And now we have to
155. 5:11fill in our business purpose. Now here
156. 5:13you can simply fill in what you're going
157. 5:14to do. Maybe you're active on Amazon,
158. 5:16maybe do YouTube just like me. But
159. 5:18honestly, the easiest way is simply
160. 5:20selecting use generic business purpose.
161. 5:22That's what I personally have as well
162. 5:24and works fine. Then they're going to
163. 5:26ask to two addresses. The physical
164. 5:28address you want on record with the
165. 5:29state. And here we want to choose the
166. 5:31registered agent address of Northwest.
167. 5:34It's going to be the same for the
168. 5:35mailing address. So they handle all the
169. 5:37mailing and this will be registered as
170. 5:39the actual address of your LLC. Now from
171. 5:41here we click on continue once again.
172. 5:44And now we need to complete our company
173. 5:46management. And here we have two
174. 5:47options, member managed and manager
175. 5:49managed. Now, we're going to leave it as
176. 5:51member managed, assuming you are going
177. 5:53to be the only member of the LLC. So,
178. 5:55this is then where you want to fill in
179. 5:56your first name and your last name and
180. 5:59also leave the address right here as
181. 6:01your registered agent address. Just like
182. 6:03that. Now, again, they don't put your
183. 6:05name on the public record, which is
184. 6:07really important if you care about
185. 6:08privacy. Next up, you need to fill in
186. 6:10your personal details to communicate
187. 6:12with you. This part stays completely
188. 6:14private. is not going to be on any of
189. 6:16the records. So, you can simply fill in
190. 6:17your own address right here. For me,
191. 6:19that would be in the Netherlands. And
192. 6:20then we are at the business identity
193. 6:22package page. Now, this includes stuff
194. 6:24like a domain name, an email, a phone
195. 6:27number, all stuff you don't really need.
196. 6:29This isn't really free at all. It's
197. 6:31actually a trial. So, I'd recommend not
198. 6:33getting this in the package as you can
199. 6:35get it yourself anyway. And now, this
200. 6:36next part right here is really
201. 6:38important, especially for non- US
202. 6:40residents. You're going to see an option
203. 6:42right here that says tax ID. And this
204. 6:44right here is your EIN or employer
205. 6:46identification number. This basically
206. 6:48acts as your social security number for
207. 6:51your business. And you absolutely need
208. 6:52this to open a US bank account and to
209. 6:55file your taxes. And now here's the
210. 6:57thing. As a non- US resident, you can't
211. 6:59apply for an EIN online like US citizens
212. 7:02can. You have to mail to the IRS, which
213. 7:04takes 8 to 11 weeks. Or you can simply
214. 7:07have Northwest do it and toggle this
215. 7:08button. And this is going to be way
216. 7:10faster and saves a lot of hassle. This
217. 7:12is going to be $200 though since we have
218. 7:14to click do not have a social security
219. 7:16number because we are non-residents. So
220. 7:18it costs a little more but it's
221. 7:20definitely worth it. Now you will see a
222. 7:21few more options like escorp election
223. 7:24with the IRS premium mill service
224. 7:26trademark filing DBA trademark filing.
225. 7:28Now for the escorp election this is
226. 7:30really only applicable for resident with
227. 7:32specific tax structures and all these
228. 7:34other ones are not necessary as well. So
229. 7:36I'm going to skip this too and click
230. 7:38continue. Now we're on the final page
231. 7:40where you can review your order and you
232. 7:42will see a breakdown of the total cost.
233. 7:44Now the total pricing is complete and it
234. 7:46comes down to a onetime fee of $343
235. 7:50including everything. After this, you
236. 7:52just have to pay Northwest $125 per year
237. 7:55as the registered agent cost and $60 a
238. 7:58year for the state filing fee. This
239. 7:59means your annual total costs after the
240. 8:02first year are $185 to keep your LLC
241. 8:05going. Now that you've submitted your
242. 8:06order, let's talk about the timeline.
243. 8:08and Northwest is going to file the LLC
244. 8:10with the state. And usually this takes
245. 8:12about one to two business days. Once
246. 8:14that is done, they'll start the process
247. 8:16of getting the EIN number for you. And
248. 8:18for non- US residents, this can take
249. 8:20anywhere from 1 to 2 weeks because they
250. 8:22have to submit the application by fax to
251. 8:24the IRS. You'll get email updates from
252. 8:27Northwest throughout the process. So
253. 8:28just keep an eye on your inbox. Once
254. 8:30everything is processed, you'll be able
255. 8:32to access all of your documents through
256. 8:34the dashboard in Northwest. And this is
257. 8:36everything that you will receive. your
258. 8:38articles of organization, which is the
259. 8:40official proof that your LLC is legally
260. 8:42formed. Your registered agent address,
261. 8:44which is your official address in
262. 8:46Wyoming from Northwest. Your company
263. 8:47dashboard inside Northwest to manage
264. 8:49your company info, filings, and
265. 8:51documents. Then the EIN number. This is
266. 8:54your business tax ID used for all of
267. 8:56your LLC operations. And then your LLC
268. 8:58branding, so the name, and this is your
269. 9:00official business identity. All right,
270. 9:02so now let's talk about taxes because
271. 9:04this is really important. And for
272. 9:06foreign owners, if you're a non-use
273. 9:08resident with a single member LLC formed
274. 9:11in Wyoming, Delaware, or New Mexico,
275. 9:13your LLC is treated as a disregarded
276. 9:16pass through entity by default. And this
277. 9:18simply means you're not paying any
278. 9:20federal income tax in the US since the
279. 9:22income passes through the company. And
280. 9:24you also pay no state income tax if
281. 9:27formed in one of these three states. You
282. 9:29only pay tax on your own country of
283. 9:30residence based on your local tax rules
284. 9:33and double tax treaties. Here I have an
285. 9:35example. Let's say I make $10,000 in
286. 9:38profit with Amazon FBA through my US
287. 9:40LLC. Then by default, we don't pay any
288. 9:43federal income tax as well as any state
289. 9:45income tax. However, this is going to be
290. 9:48considered personal income in your
291. 9:50country of residence, which is for me
292. 9:52the Netherlands. So for this, I have to
293. 9:54pay personal income tax over this
294. 9:56$10,000 in the Netherlands. Now, let's
295. 9:59go over the required annual filings. And
296. 10:02even though you're not paying any tax in
297. 10:04the US, you still have to file some
298. 10:06forms with the IRS every single year.
299. 10:08And the two main forms of these are form
300. 10:105472 and pro- forma 1112. They are
301. 10:14required every year by the IRS for
302. 10:15foreignowned single member LLC's even if
303. 10:18you made $0 in profit. And form 4572 is
304. 10:22basically an information return that
305. 10:24reports all transactions between you and
306. 10:26your LLC. And proforma 1112 is a cover
307. 10:29sheet that goes with it. Now, these
308. 10:31forms can be completed every year, and
309. 10:34it's really important. And if you don't
310. 10:35file them, the penalty for missing or a
311. 10:38late filing is $25,000 or more. So, you
312. 10:41definitely don't want to miss this
313. 10:42deadline, and you can file these forms
314. 10:44yourself, or you can hire a CPA to do it
315. 10:47for you. Then, finally, you also need to
316. 10:49file annual reports with the states of
317. 10:51Wying or the state where you formed your
318. 10:53LLC. This basically keeps your LLC
319. 10:55legally active with your formation
320. 10:58state. In Wying, this will be $60 per
321. 11:00year. And this confirms that your
322. 11:02registered agent and company address is
323. 11:04still valid. Now, Northwest can handle
324. 11:07this part for you as their registered
325. 11:08agent service. So, you don't really need
326. 11:10to worry too much about this. And this
327. 11:13is also why I recommend using a good
328. 11:14registered agent so much. They provide
329. 11:16an annual report and renewal service
330. 11:18where they will prepare and submit your
331. 11:20state's annual report on your behalf.
332. 11:22And they include state compliance
333. 11:24filings as part of their service. Now,
334. 11:26this is pretty much the tax side of
335. 11:28things. It still can be a little
336. 11:29overwhelming, but it's really not that
337. 11:32difficult. Once you then have all your
338. 11:34business information, you can start
339. 11:36opening a US business bank account. And
340. 11:38luckily, there are a few banks from
341. 11:39where you can open a US bank remotely,
342. 11:42where you can receive, store, and manage
343. 11:43your money in USD. And my three
344. 11:46recommended banks for these are Mercury,
345. 11:48which is what I'm using myself as well,
346. 11:50Relay, or Airwex. These are designed
347. 11:53specifically for online businesses and
348. 11:54startups and they're very friendly to
349. 11:56non US residents. Now, these banks are
350. 11:59widely recognized and connect easily
351. 12:01with platforms like Amazon, Shopify, and
352. 12:03Stripe, and even Google AdSense, which
353. 12:06is what I use as well. To apply for
354. 12:08Mercury, you simply want to go to
355. 12:09mercury.com from where you can click
356. 12:11open account right here. And first, they
357. 12:13will ask for your company name, just
358. 12:15like that. And then here, they're going
359. 12:16to ask information about the business.
360. 12:18For example, the employer identification
361. 12:20number. You will need to fill in the
362. 12:23address of the registered agent which
363. 12:25will be in Wyoming for us as well as the
364. 12:27physical address for our business. Then
365. 12:29also here you need to upload the
366. 12:30articles of organization and upload the
367. 12:33document of your EIN number. Overall a
368. 12:36super easy process and can get you
369. 12:38started for doing business in the US
370. 12:39straight away. All right, so that's
371. 12:41everything you need to know about
372. 12:42opening a US LLC as a non- US resident.
373. 12:45I left all the links you need down in
374. 12:47the description. There's a link to
375. 12:48Northwest, to Mercury Bank, and also
376. 12:50some additional resources for tax
377. 12:52filing. If you have any questions about
378. 12:54the process or you got stuck on any of
379. 12:56the steps, drop a comment down below and
380. 12:58I'll do my best to help you out. If you
381. 13:00found this video helpful, make sure to
382. 13:01give it a thumbs up and subscribe to the
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