How to open your LLC in the United States
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U.S. LLCs can be one of the best legal entities for entrepreneurs who are not residents of the United States. Indeed, American LLCs give you access to all the advantages of a first-world jurisdiction, such as banking, payment processing and a good reputation, while keeping a relatively low tax rate and easily manageable compliance requirements.
If you're looking for information on how to open an LLC in the United States, our complete guide will give you everything you need to know to decide whether an LLC is a good option for you, how you can open one quickly and in compliance with the rules, and everything else you need to pay attention to when managing it.
What is an LLC?
A limited liability company, or LLC, is a U.S. business structure created under each state's law, in which the company is legally separate from its owner or owners.
An LLC therefore protects its individual members from legal liabilities and offers tax transparency, meaning that taxes are not paid by the company but by its owners as individuals. If none of the LLC's members are U.S. nationals, then taxes do not have to be paid in the USA.
Why start an LLC in the United States?
Starting an LLC in the United States offers concrete advantages that set it apart from other business structures. Before going into the step-by-step process, it's worth understanding why so many entrepreneurs choose this structure.
Protection of your personal assets: When you form an LLC, your business becomes a legal entity separate from you as an individual. This means that if the company takes on debt or faces a lawsuit, your personal assets (home, vehicle, savings accounts) are protected. This is what is known as the "corporate veil".
Tax flexibility: An LLC is a "pass-through entity", which means the company itself does not pay corporate taxes. Profits pass directly to the members, who report them on their personal taxes. This avoids the double taxation that affects traditional corporations. For nonresident owners with no effective business activity in the U.S. (known as non-ETBUS), the tax burden in the United States can be minimal or zero.
Credibility and market access: Operating under an LLC registered in the U.S. lets you open business bank accounts in dollars, process payments with platforms like Stripe or PayPal, work with American clients who require a formal entity and access business financing.
Clear agreements between partners. If you start a business with one or more partners, the LLC formation process requires you to document who is responsible for what, how profits are split and what happens if someone decides to leave. Putting this in writing from the start prevents future conflicts.
Legal protection of the name. By registering your LLC in a state, you legally secure your company's name in that jurisdiction. No one else will be able to register an LLC with the same name in that state.
Who can open an LLC in the United States?
LLCs in the United States can be opened by anyone in the world, regardless of nationality, who is over 18 years old and has a valid passport.
How to open an LLC in the United States in 7 steps
Now that you know what an LLC is and that you meet the requirements to open your business in the United States, let's look at the stages you need to follow to have an operational LLC.
1. Decide which state you will register your LLC in
Choosing the state of registration is one of the most important decisions when starting an LLC, since each state has its own fees, annual report requirements and levels of privacy.
How do you choose the right state? If your LLC will have a physical presence in a specific state (an office, employees, recurring clients or a storefront), the most practical approach is usually to register directly in that state. Operating on an ongoing basis in a state other than the one where you registered may require you to complete a "foreign qualification", which involves additional fees, paperwork in both states and double compliance obligations. It's a cost and complexity you can avoid by choosing well from the start.
If you don't have a physical presence in any state, as is the case with many digital businesses run from outside the U.S. (freelancers, agencies, e-commerce, SaaS), you can choose the state that best fits your needs in terms of cost, privacy and administrative simplicity. The most popular states for this profile are Wyoming, Delaware, New Mexico, Florida and Texas.
Besides physical presence, when deciding which state you want to form your LLC in, there are three criteria that matter most:
The amount of the one-time filing fee required to form the LLC.
The cost of the annual report.
Only some states guarantee anonymity, meaning the names of LLC owners are not made public (only the tax authorities know them).
Here we compare the main U.S. states for opening your LLC.
State | Formation cost | Annual report cost | Processing time | Anonymity |
|---|---|---|---|---|
$125 | $138.75 | 5 business days | No | |
$90 | $300 | 9 to 12 weeks | Yes | |
$300 | $0 | 7 business days | No | |
$50 | $0 | 3 business days | Yes | |
$100 | $60 | Same day | Yes |
Which state is best for your case?
If you're looking for the lowest possible formation and maintenance cost, New Mexico is the cheapest option: formation costs just $50 and there is no mandatory annual report.
If you prioritize privacy and anonymity as an owner, consider Wyoming or Delaware, where members' names do not appear in public records.
If your business has or will have a physical presence or clients in a specific state, register directly there to avoid foreign qualification and its additional costs.
2. Choose your LLC's name
Choosing your LLC's name is more than a marketing decision. There are legal requirements you must meet for the state to accept the registration.
Legal name requirements:
The name must be unique and distinguishable from any other company registered in the same state. You can check availability by searching your state's Secretary of State business entity database.
The vast majority of states require the name to include the designator "LLC" or "Limited Liability Company" (or their equivalent abbreviations).
There are restricted words you can't use in the name without special authorization. Terms like "Bank", "Insurance", "University" or "Government" usually require additional documentation or that a licensed professional (lawyer, doctor, etc.) be part of the LLC.
The name must not infringe existing trademarks. You can check this for free in the TESS system (Trademark Electronic Search System) of the U.S. Patent and Trademark Office (USPTO) at uspto.gov.
If you already have a name in mind and want to check its availability in the state you chose, you can do so with this LLC name checker.
What if you want to operate under a name different from the registered one?
It's common for the LLC's legal name to be different from the name you use with the public. For example, you could register "García Digital Solutions LLC" but run your online store as "Tienda Creativa". In that case, you need to register a trade name or DBA (doing business as). Not all states require it, but it's good practice. The cost is usually $10 to $100 depending on the state or county.
Once you confirm the name is available and doesn't infringe any trademark, it's a good time to register your company's web domain (.com, .co, etc.). Although it's not required to form the LLC, doing it early prevents someone else from claiming the web address you need. Most domains cost between $10 and $20 a year.
3. Choose the registered agent
Whatever state you decide to register your LLC in, every LLC must appoint a registered agent. A registered agent is someone who receives official or legal documents on behalf of the LLC. Once received, the registered agent forwards these documents to the LLC.
Anyone over 18 can be the registered agent of an American LLC, and you can appoint yourself or an employee. The agent must have a physical address within the LLC's state of registration; a P.O. Box is not valid. They must also be available at that address during regular business hours to receive official or legal documents.
Most LLC formation services include the registered agent service for the first year. From the second year on, it is renewed for an annual fee that varies by provider.
4. Complete the "Articles of Organization" form
The Articles of Organization (or "Certificate of Formation" in some states) are the legal document that officially forms your LLC with the state. They are the equivalent of a company's articles of incorporation.
This form is filed with the Secretary of State of the state you chose. In most states you can complete and submit the form online.
Information the form usually requires:
The LLC's full name (exactly as it will be registered).
The LLC's registered address (which may or may not be where your business physically operates).
Name and address of the registered agent.
Names of the LLC's members or managers (in states that require it).
The LLC's purpose (most states accept a general purpose such as "engaging in any lawful activity").
Whether the LLC will be managed by its members (member-managed) or by an appointed manager (manager-managed).
Filing cost: The cost ranges from $50 to $500 depending on the state (see the table in Step 1 for the most popular states). This payment is made only once, at the time of formation.
Once the Secretary of State approves the form, you will receive a certificate of formation confirming that your LLC is formally registered. Processing time ranges from a few hours (Wyoming) to several weeks (Delaware).
The U.S. government's Small Business Administration (SBA) maintains a list with links to each state's business formation offices that may be useful to you.
5. Create your operating agreement
The Operating Agreement is the document that defines the LLC's internal operating rules. Although many states don't legally require it, having one is crucial for several reasons: it protects your rights as a member, prevents future disputes, and most banks ask for it to open a business account.
What does an Operating Agreement include?
Each member's ownership percentage and initial capital contribution.
How profits and losses are distributed among the members.
Voting rights and decision-making processes.
The roles and responsibilities of each member or manager.
Rules for transferring ownership (what happens if a member wants to sell their stake).
Procedures for adding new members or for an existing member's exit.
Dissolution clauses: what happens if the decision is made to close the LLC.
If your LLC has only one member (single member), the Operating Agreement is simpler, but it's still recommended because it reinforces the legal separation between you and your company. Many entrepreneurs create it from free or low-cost templates.
If your LLC has several members or complex situations (investors, shared intellectual property, members in different countries), the most prudent thing is to hire a lawyer to draft it. The cost can range from $400 to $5,000 depending on the complexity and the state.
Many states don't require it, but it's highly recommended to have one anyway, to make sure all members agree on their rights and responsibilities.
Download the Operating Agreement template
6. Get an EIN
The EIN (Employer Identification Number) is your LLC's federal tax identification number. Think of it as the equivalent of a company's NIF in Spain, the RFC in Mexico or the RUT in Colombia. It is issued by the IRS (Internal Revenue Service) and is needed for practically everything: paying taxes, opening a business bank account, hiring employees and working with payment platforms.
How do you apply for it?
The EIN is obtained through IRS Form SS-4, and it is completely free.
If you have a Social Security Number (SSN): You can apply online directly on the IRS website and receive it in minutes.
If you are a nonresident (without an SSN): You can't use the online form. The alternatives are to apply by phone by calling the IRS international line at (267) 941-1099 (Monday to Friday, 6:00 AM to 11:00 PM Eastern time), or to send the completed SS-4 form by fax. By phone, the process is usually resolved in a single call. By fax, it takes approximately 4 to 6 weeks.
Any service that charges you to "process" the EIN is charging you to fill out a form you can complete yourself for free. If you'd still rather delegate this step, LLC formation services include it in their packages.
Is an EIN mandatory?
If your LLC has more than one member, you're going to hire employees or you need to open a business bank account, yes, it's mandatory. Even if your LLC is single-member and none of these cases apply, getting one is highly recommended because most banks and platforms require it.
Although having an EIN isn't always mandatory (for example, with single-member LLCs), you will need one if you have or plan to have employees, if your LLC has more than 1 member, or if you want to open a bank account for your LLC, among other things.
7. Keep your LLC active
Registering your LLC is the beginning, not the end. To keep your LLC active and in compliance, there are recurring obligations you need to keep in mind:
Annual Report. Most states require LLCs to file an annual report (or biennial, depending on the state) that updates your company's information: address, members, registered agent.
Registered agent renewal. Your registered agent must remain active for as long as the LLC exists. If you use a professional registered agent service, you will have to renew it annually.
Filing with the IRS. Even if your LLC doesn't have to pay taxes in the U.S. (as is often the case with foreign-owned LLCs that are not ETBUS), you must file informational returns with the IRS.
Publication requirements (in some states). States like New York and Arizona require new LLCs to publish a notice of formation in one or two local newspapers in the county where the LLC is located.
What to do after forming my LLC
As we said earlier, registering your LLC is only the beginning. Once you have completed all the previous steps, there are a few points we recommend you take into account.
Get the necessary business licenses and permits
Depending on the type of business you run and the state where your LLC is registered, you may need to obtain additional licenses or permits to operate legally.
The requirements vary a lot depending on your activity and location. Some common examples:
General business licenses: Some states, counties or cities require a general license to operate any type of business.
Industry permits: Businesses related to food, health, construction, real estate, transportation or financial services usually require specific permits.
Professional licenses: If the LLC offers legal, medical, accounting or engineering services, the professionals involved need to be licensed in the corresponding state.
If your LLC operates exclusively online and from outside the U.S. (with no physical presence or employees on U.S. soil), you are unlikely to need state or local licenses. But if at some point you hire staff in the U.S. or open a physical location, this step becomes relevant.
The SBA maintains a list of business licensing offices by state that you can consult for free.
Open a bank account dedicated to your LLC
Opening a bank account used exclusively for your LLC is essential. It's not just a recommendation, it's a legal necessity: mixing your personal finances with the business's weakens the limited liability protection the LLC offers (what is known as "piercing the corporate veil").
To open the account, you will generally need to provide the LLC's certificate of formation, the EIN, the Operating Agreement and an ID document.
If you are not a U.S. resident and can't visit a bank branch in person, the neobanks and digital banks that accept foreign-owned LLCs 100% remotely include Mercury, Relay, Wise Business and AirWallex, among others. Traditional banks like Bank of America or Chase generally require you to be physically present to open the account.
Get a business credit card
In addition to the bank account, it's a good idea to get a credit card in the LLC's name to pay all business expenses. This not only simplifies bookkeeping, but also helps build a credit history for your company in the U.S., which can be useful if you need financing in the future.
Set up your payment processor
If your LLC sells products or services (especially online), you will need a payment processor. Platforms like Stripe, PayPal Business or Square let you accept credit card payments, transfers and other methods. Most of these services require your LLC to have an EIN and an active U.S. bank account.
Register your LLC with the department of labor (if you are going to hire)
If you plan to hire employees in the U.S. (even just one, even part-time or seasonal), you will need to register with the relevant state's Department of Labor. This lets you report wages, pay payroll taxes and comply with unemployment insurance and workers' compensation laws. You can find each state's department of labor at dol.gov.
Plan your LLC's taxes
LLCs are taxed on a pass-through basis, meaning that the members are responsible for personally paying taxes on the LLC's income. As a nonresident, the taxes your LLC pays can be affected by its classification as ETBUS (Engaged In Trade in The US).
Plan your LLC's taxes in detail, since they can vary depending on activities such as trading, dropshipping, FBA, sales of physical products in the USA, etc.
That said, how an LLC is taxed varies significantly depending on each owner's situation. Some key points to keep in mind:
Pass-through taxation: By default, the LLC's profits pass through to the members, who report them on their personal taxes. The LLC itself does not pay federal corporate taxes.
Nonresident-owned LLCs: If you have no effective business activity within the U.S. (you are not ETBUS), you may not have to pay federal taxes on the LLC's income. However, you must file informational returns with the IRS (Form 5472 + pro forma Form 1120).
Tax classification election: With IRS Form 8832 you can request that your LLC be treated as a corporation for tax purposes. With Form 2553, you can request S-Corporation status, which can reduce self-employment taxes in certain cases. These are advanced decisions that are best evaluated with an accountant or tax advisor.
Each activity (trading, dropshipping, FBA, selling services, SaaS) has different tax nuances. Consult a professional to design the optimal tax strategy for your case.
Start your LLC today
Starting an LLC in the United States is more accessible than it seems, even if you don't live in the country. The process comes down to a few key decisions (choosing the state, naming your company, filing a form and getting your EIN), and in most cases you can have everything ready in a matter of days.
If you'd rather delegate the whole process and make sure every step is done right from the start, at Start Companies we help you form your LLC 100% remotely, with registered agent, EIN and bank account included.
Do I need to live in the United States to start an LLC?
No. Anyone in the world can start an LLC in the United States, regardless of their nationality or place of residence. You don't need a visa, a green card or a Social Security Number. The only requirements are being over 18 and having a valid passport. The entire process can be done 100% remotely. What you will need is a registered agent with a physical address in the state where you register the LLC.
Do I need a lawyer to form an LLC?
It's not mandatory. Thousands of entrepreneurs form their LLCs on their own or through specialized online services without hiring a lawyer. However, if your LLC has multiple partners, involves complex intellectual property or will receive outside investment, having legal advice can save you future problems, especially when drafting the Operating Agreement.
Can I start an LLC as the sole owner?
Yes. LLCs with a single owner are called "Single Member LLCs" and are very common, especially among freelancers, consultants and digital entrepreneurs. They work the same way as a multi-member LLC, but with a simpler structure. There is no minimum or maximum number of members for an LLC.
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.
