A U.S. LLC can be used to run many different types of businesses, from professional services and freelancing to ecommerce, software, digital products, investments or certain brick-and-mortar businesses. It can also make it easier to manage contracts, collections, payments and business operations.
The LLC is a flexible business structure, but that does not mean every activity has the same requirements. Some businesses need specific licenses or state or local permits, and certain activities may be subject to additional restrictions.
If you are thinking about forming an LLC, what matters is not just knowing what it is, but understanding what you can do with it and whether it fits the business model you want to build.
In this guide you will find the main businesses and activities that can operate through an LLC, what you can manage through it and what to keep in mind if you are an entrepreneur who does not reside in the United States.
In short, you can use an LLC to:
Sell professional services or work as a freelancer.
Run an agency or consultancy.
Operate an ecommerce, dropshipping or Amazon FBA business.
Develop software, SaaS, apps or digital products.
Sell courses, memberships or digital content.
Manage certain investment projects.
Invest in real estate.
Operate certain physical businesses, as long as you meet the applicable requirements.
Bill clients and manage your business's payments and expenses.
Work with suppliers and sign contracts in the company's name.
What businesses can be LLCs in the United States?
An LLC can be used for a wide variety of lawful business activities. The structure is especially common among small businesses, entrepreneurs, freelancers, digital companies and certain investment projects.
However, there is no single list that applies to every state. Some activities are regulated and may require licenses, permits or a specific professional structure.
Professional services and freelancing
Designers, developers, writers, consultants, marketing specialists, photographers and other independent professionals can use an LLC to structure their business activity.
An LLC can be especially useful when you want to separate your professional activity from your personal finances, formalize relationships with clients and suppliers and operate under a business entity.
In regulated professions, such as certain medical, legal or accounting activities, there may be additional requirements depending on the state.
Consultancies and agencies
An LLC can also be used to run marketing, advertising, design, web development, business consulting or other service-based businesses.
In these cases, the company can be used to enter into contracts, invoice clients, manage expenses and work with contractors or suppliers.
Ecommerce and product sales
Online stores can operate through an LLC, whether they sell directly to consumers or through marketplaces.
Some common models are:
Shopify stores.
Amazon FBA.
eBay.
Etsy.
Dropshipping.
Import and export.
Wholesale or retail sales.
An LLC does not automatically eliminate the tax or regulatory obligations associated with sales. These will depend on, among other factors, the state, the type of product and where the sales take place.
Software, SaaS and startups
An LLC can be used to develop and sell software, apps, digital platforms, SaaS tools and other tech products.
For startups seeking outside funding, however, it may be necessary to consider other structures, especially if the project intends to raise investment by issuing shares.
Courses and digital products
An LLC can also be used to sell:
Online courses.
Memberships.
Ebooks.
Templates.
Digital products.
Subscription services.
Educational content.
Affiliate marketing and other digital businesses
Businesses based on affiliate marketing, content creation, digital advertising and other online models can also be structured through an LLC.
In these cases, in addition to the entity, you should review the requirements of the platforms you will work with and the tax obligations that apply to your activity.
Investments and real estate
An LLC can also be used in certain investment projects, including holding real estate.
In these cases, the structure should be analyzed taking into account the type of asset, the state where it is located, the owners and the tax and legal implications of the transaction.
Physical businesses
It is also possible to use an LLC for certain businesses with a physical presence, such as restaurants, construction, lodging, transportation or local retail.
Forming the LLC does not replace the licenses, permits or authorizations that the state, county or city where the activity takes place may require.
What can I do with an LLC? Common uses
Once you know what type of business you can structure through an LLC, the next question is what you can use this entity for in practice. The specific uses will depend on the type of activity you carry out, where your business operates and the legal and tax obligations that apply. Below, we review the common ways to use an LLC in the United States and what to keep in mind in each case.
Selling services to international clients
Registering an LLC in the United States can bring a large number of benefits to your service business.
The solid reputation of U.S. business structures increases the trust of clients and suppliers, unlike companies established in jurisdictions such as Panama, Cyprus or Bulgaria.
In addition, the structure of a limited liability company removes the need to add VAT to your invoices, which can give you a competitive advantage over local companies. You also won't have to worry about U.S. sales tax, since it only applies to the sale of physical products within the country.
You will also be able to easily open bank accounts in the USA or with online banks, create investment accounts and have complete financial freedom to get paid, pay and invest in the currency of your choice.
Important: Forming an LLC in the United States does not automatically eliminate the taxes or obligations that may exist in the country where you live or actually carry out your activity.
An LLC for e-commerce and dropshipping
Choosing an LLC for your e-commerce and dropshipping business can be a wise decision.
Besides building trust with clients and suppliers, this business structure greatly simplifies integrating your e-commerce store with payment processors. You can easily integrate with Stripe, Paypal, or other providers such as GoCardless.com.
Once the money is in your payment processor, you can regularly transfer it to your business bank account (which your LLC lets you open) and you're done. Managing collections and payments is no longer a problem for your e-commerce business.
Note for e-commerce businesses selling in the USA: If you establish business ties in the United States, your business may be considered "ETBUS", and you may have to pay taxes in the USA.
An LLC for trading
An LLC can have several advantages for your trading business. With an LLC, you can register with the vast majority of brokers (Ameritrade, InteractiveBrokers, RobinHood, Etoro, etc.).
Also, through the operating agreement, the LLC can set specific rules on the use of funds, which can be handy if your company has several members.
In addition, the limited liability of its members protects their personal assets if your trading business becomes insolvent. This is useful if you trade with high leverage.
On top of that, there are certain states where the LLC is anonymous. So there will be no public record linking the LLC to you personally.
An LLC for real estate investing
Real estate ownership carries inherent risks that can lead to injuries and lawsuits against owners. Unhappy tenants, construction issues, cash flow problems... the risks for owners in this industry are significant.
For this reason, many owners choose to mitigate those risks by holding their properties under the personal liability protection provided by LLCs and corporations.
In addition, in many states, if a creditor obtains a judgment against an LLC member, it can only obtain a "charging order", that is, the right to receive a share of the profits allocated to that member, which limits creditors' access to funds.
Finally, certain states allow you to form a "Series LLC", which is, simply put, a different LLC for each property, thereby separating the assets of each one into different legal structures.
An LLC for Amazon FBA
When verifying FBA accounts, an essential requirement is having an account in the same country where the company is registered and a credit card, both of which are accessible with a U.S. LLC.
With a U.S. LLC, you can also apply to the Amazon Lending program and apply for loans from $1000 to $750.000 USD.
In addition, all the other advantages we mentioned earlier apply: trust from clients and suppliers, the ability to receive Amazon payments directly into your bank account and in dollars, tax advantages, limited liability, etc.
An LLC for digital businesses
An LLC can be used to structure a wide variety of digital businesses and work with clients from different countries who are looking for an affordable cost to start a company. It is a common choice for e-commerce and dropshipping, SaaS companies and apps, marketing and development agencies, IT and design freelancers, consultants, content creators and info-product businesses.
For example, you can use an LLC to:
Sell products online, through your own store, dropshipping, Amazon FBA or other marketplaces.
Develop software, apps or SaaS services and charge clients for subscriptions or licenses.
Run a marketing, design or web development agency, hiring contractors and working with international clients.
Offer professional services as a freelancer, for example programming, design, copywriting, SEO, marketing or consulting.
Sell courses, ebooks, templates, memberships and other digital products.
Monetize content and audiences, through advertising, sponsorships, memberships, affiliate programs or other models.
Run businesses based on affiliate marketing, as long as the requirements of each program or platform are met.
The LLC can be used to invoice clients, sign contracts, manage the business's income and expenses and work with suppliers and contractors. It can also make it easier to access certain payment tools and financial services for U.S. companies, although each platform sets its own requirements.
An LLC to get a U.S. bank account
Finally, owning an LLC in the United States opens the door to a significant opportunity: the ability to open a bank account in the country, with all the advantages that come with it.
Having a U.S. bank account makes international transactions faster and cheaper, without incurring costly exchange fees.
In fact, some U.S. banks even offer fee-free accounts as long as you maintain a minimum balance above USD 5.000.
Therefore, an LLC stands out as an ideal solution, since it provides a layer of separation between your personal identity and the business related to these areas, offering a path to a solid and reliable banking relationship.
Does an LLC pay taxes on these activities?
As I mentioned, having an LLC does not automatically mean being tax-exempt. The tax treatment depends on factors such as the entity's tax classification, the type of activity, where the business operates, who its owners are and the rules of each jurisdiction.
At the federal level, an LLC can receive different tax treatments. For example, a single-member LLC is usually treated differently from a multi-member LLC, and under certain circumstances the company can elect to be taxed under another classification.
In addition, there may be state, local or tax obligations in the country where the owner resides.
That is why it is not correct to assume that an LLC automatically means “zero taxes”.
What about sales tax?
Sales tax does not depend solely on whether or not you have an LLC. The obligations can vary depending on the state, the type of product or service and whether certain ties or nexus with the state exist.
What about taxes in my country?
If you are a tax resident of another country, forming a U.S. LLC does not automatically eliminate your tax obligations there.
Before forming an LLC for tax reasons, it is a good idea to review your specific situation with a professional who specializes in international taxation.
What businesses cannot be LLCs?
Most lawful business activities can be structured through an LLC, but some require meeting additional requirements:
Regulated professions: may require a PLLC or another specific professional structure.
Licensed activities: restaurants, construction, transportation and lodging, among others, need the corresponding permits.
Restricted activities: sectors such as cannabis, gambling or certain adult content businesses may be subject to state or federal restrictions and to limitations from banks and payment processors.
Illegal activities: an LLC does not allow you to carry out activities prohibited by federal or state law.
Before forming an LLC, check whether your activity requires a professional license or specific permits, or is subject to restrictions in the state where you want to operate.
As a summary and to help you make the best decision, here is a quick reference table:
Type of business | Can it use an LLC? | What should you check? |
|---|---|---|
Freelancing | Yes | Contracts, taxes and professional activity |
Consulting | Yes | Licenses if the profession is regulated |
Digital agency | Yes | Contracts and tax obligations |
Ecommerce | Yes | Sales tax, nexus and marketplace obligations |
Dropshipping | Yes | Taxation and commercial obligations |
Amazon FBA | Yes | Amazon requirements and tax obligations |
Software / SaaS | Yes | Contracts, intellectual property and taxes |
Online courses | Yes | Taxation and applicable regulations |
Affiliate marketing | Yes | Requirements of each program |
Real estate | Yes | State and tax rules |
Trading | It depends | Broker, activity and tax treatment |
Restaurant | Yes | Local licenses and permits |
Construction | Yes | Professional and local licenses |
Transportation | Yes | Permits and applicable regulations |
Without a doubt, an LLC can be a good option if you want to structure your business activity in the United States, but the decision should start from how your business works, where you operate and what obligations you will have, not just from the general advantages of this entity type.
If you are already clear on the activity you want to carry out and are evaluating forming your company in the United States, the next step is to do it with the right structure and properly meet the formation and operating requirements.
Want to form your LLC in the United States? At Start Companies we can guide you through the process and help you with forming the LLC, getting the EIN and opening your business bank account.
Written by
Ignacio Navarro
Ignacio Navarro is a Certified Public Accountant, founder of Start Companies and a specialist in U.S. companies for entrepreneurs, freelancers and digital businesses in Latin America. With training in international taxation and studies at UCEMA, he advises non-resident clients on forming and maintaining LLCs, opening bank accounts, invoicing, accounting and taxes. His experience combines tax strategy, compliance and practical vision for operating in the U.S. in a simple, organized and professional way.
