What Is an LLC? Can Non-US Residents Form One?

What is an LLC?

An LLC (Limited Liability Company) is a US business entity with its own legal identity. Its core feature is separating the company's assets from the owner's personal assets (the owner is called a member): if the company runs up debts or gets sued, owners are generally liable only up to what they put in, not their entire personal wealth.

LLCs are governed by each state's law, so formation fees, annual upkeep fees and report deadlines vary from state to state. That is why choosing the state matters from day one.

Can a non-US resident own an LLC?

Yes. Most states do not require LLC owners to be US citizens or residents, do not require a visa, and do not require you to be in the US. Filings are usually made online, either directly or through a company-formation service provider.

What do you need to form an LLC?

• An LLC name that is not already taken in the state and includes "LLC" or "Limited Liability Company".
• A Registered Agent in the state of formation — required in every state (see our separate article on Registered Agents).
• A contact address and details of the members or managers.
• The state filing fee (it differs from state to state).

What comes after the LLC is formed?

1. Draft an Operating Agreement — banks and payment platforms usually ask for it.
2. Get a federal tax ID (EIN) from the IRS.
3. Open a bank or payment account for the LLC.
4. Track and file the state's annual report on time.
5. Meet your IRS reporting duties (see below).

The tax reporting duty people often miss

A single-member LLC owned by a foreign person is usually treated as a "disregarded entity" for US federal tax. If the company has no US-source taxable income there may be no federal income tax to pay — but you typically still must file an annual information return with the IRS (Form 5472 attached to a pro forma Form 1120). Failing to file can bring very heavy penalties; the figure commonly cited is $25,000 per form.

On top of that, income you take out of the LLC is also subject to the tax and foreign-exchange rules of the country where you live. Work with an accountant or lawyer who understands both systems.

When should and shouldn't you form an LLC?

An LLC makes sense if you sell online to US customers (Amazon, Shopify, Etsy), receive USD payments from international clients, or need a US legal entity to work with US partners or platforms. If you only do business in your home country, a US LLC does not solve that need and may simply add cost and paperwork.

This article is general information, not legal or tax advice. Rules and fees change by state and over time — check the official state/IRS pages and consult a professional before you decide.