Creating a company in the United States, in particular registering an LLC (Limited Liability Company), is accessible to anyone living anywhere in the world. The United States does not limit the nationality or place of residence to be able to own and charge your clients from an American company and with a bank account in dollars in an American bank.
In Kabir International Group we specialize in the registration of companies in the United States for individuals or companies based abroad. With our service you will receive comprehensive advice and support so that, hand in hand with a local partner, you can meet all the necessary requirements and processes. If you still do not know what an LLC is, I encourage you to read our publication on the subject, Definitive LLC Guide.
In this publication we are going to review the 9 advantages that having a company in the United States can offer you. But before we go into detail, I want to share with you a brief introduction.
Protects Personal Assets. The nature of LLC is to be a limited liability entity, and thanks to that, the owners' assets are not put at risk in case of problems arising from the operation of the business.
Tax Flexibility. The owner of the new business can choose how the business will be taxed, whether as a Sole Proprietorship, Partnership or Corporation.
No double taxation. By default, an LLC is not subject to corporate taxes, but only the results are taxed via the personal tax return of each owner. That is why it is considered a transparent entity.
No accounting reports. Although a record of the flow of business must always be kept, the IRS (the American tax agency) does not require an LLC to file formal accounting.
Selling on marketplaces such as Amazon or Ebay. As a US company, an LLC allows selling on Amazon, Ebay or similar, from any country even if the owner's country is not supported by these platforms.
Use payment gateways such as Stripe. Since an LLC is a US company, it is possible to use the Stripe payment gateway regardless of the owners' country of residence.
Open a bank account in the USA. Without the need to travel, opening an account in a US bank is possible with an LLC, as well as obtaining a Debit Card to be used in any country, not only in the United States.
Safeguards privacy. Depending on the state in which the LLC is registered, there may not be public records of who its owners are. Your LLC may be anonymous.
Free profit sharing. The profits of an LLC can be distributed to its members in proportions different from the percentage of ownership that each one has.
The 9 advantages of owning an LLC in the United States:
1. Start a business simply and quickly
2. Protect the personal assets of each member
3. Optimize tax payment
4. Possibility of applying for a Visa to work in the United States
5. Open a business bank account in the United States without traveling
6. Access marketplaces and use restricted payment gateways
7. No bureaucratic requirements
8. Protect your privacy with anonymous LLCs
9. EV SSL Protection for Websites
1. Start a business in a simple and fast way.
The first advantage to highlight is the ease that the U.S. government has for the registration of a new company. In comparison to other countries that require a lot of bureaucratic processes, which make the procedures more expensive and take much longer.
For the registration of an LLC there is only one requirement for the owners:
To be older than 18 years old.
Fulfilling this only condition, any person can open an LLC in the USA, wherever he/she is from, because the process is done completely online. And with our service, you don't have to worry about the process.
Unlike many other countries, it is not necessary to have a local partner or even more than one partner. In the USA you can register a company from a single owner, regardless of nationality and country of residence. And in the case of more than one owner, they do not have to be from the same country, they can have different nationalities.
Within these advantages that allow a simple and fast opening of your company, it is necessary to emphasize that there is no minimum capital contribution.
For example, in Spain you need 3,000 euros to start a company (without considering the cost of creation), or pay a monthly fee in the case of being self-employed.
And to conclude this first point, it is also not necessary to have an American visa or to live in the United States. Therefore, you are not required to have an address in the country or any roots.
In summary, to register your company in the USA:
You can be of any nationality.
You do not have to live or travel in the United States
You do not have to contribute a minimum amount of capital
You do not need additional partners
The process is 100% virtual
2. Protect the personal assets of each member
Being cautious of any problems that may arise in a business is very important. No one would like to lose their possessions and be personally liable for business matters.
That is why the LLC, having legal personality, serves, like other types of companies, as a way to safeguard the assets of each of the members that constitute it.
Thus, depending on the industry to which the company is oriented, limited liability may be one of the most relevant characteristics. Obviously, this liability protection is maintained as long as there is no crime involved. In this situation, the law can hold the owners liable.
For example, in case of bankruptcy or inability to pay debts, the company will have to respond with the company's assets, not with what its owners own.
For the limited liability to apply to your new company:
The LLC's money should not be managed in personal bank accounts, but in one of the company's own.
No personal expenses of its members should be attributed to the company, only expenses related to its activity.
3. Optimize tax payments
For me this is one of the most important advantages, as long as several requirements are met. But it is possible to own a company in the USA and pay 0% (zero) taxes in a legal way.
In summary, there are 2 factors that affect to identify if the LLC would pay taxes as any other LLC in the United States, or on the contrary, it can save large amounts in taxes. In case the LLC does not have:
Physical establishments of the business in the U.S.
Dependent agents in the country
By complying with these two factors, it is possible to avoid having to pay any taxes in the United States, and even in the country of residence of the owners, depending on their tax regime. But for this to happen it is important to analyze the nature of the business. Because not all foreign-owned LLCs are tax-exempt.
What constitutes US presence or economic substance (nexus)?
Physical presence in the US:
According to US regulations, it is considered to have a physical establishment, if the business has a commercial premises, an office or a place of work adequate for the development of the business. In case the business does not comply with this point, it is not considered an LLC with presence in the USA. All this does not prevent the business from selling services or products.
Examples of companies that do not meet this requirement:
Marketing agency with its employees abroad but selling its services in the US,
Specialist consultants selling their consulting services in the U.S. but executing the consulting from abroad,
Content creators (influencers) who work with U.S. brands but generate content abroad,
Companies dedicated to dropshipping for example with amazon.
Dependent agents in the US:
The regulations define that a business has dependent agents in the US when it is considered an ETBUS company, which stands for "engaged in trade or business in the US". Which can be translated as "engaged in business in the United States".
Se considera ETBUS sólo si se cumplen dos requisitos:
It has at least one "dependent agent" in the United States. Dependent agents are employees or companies that work almost exclusively for the LLC.
The dependent agent does something substantial to promote the business in the U.S. (Purely administrative work is not included in this rule).
Therefore, if your LLC is not considered ETBUS and does not have a physical presence in the US, you will be able to take advantage of the rule of not having to pay taxes as long as you are not a tax resident in the country.
But I'm sure you're wondering: Is it possible? Is it legal? Why can I save taxes?
And the answer is that it is possible and legal. All this is possible due to the very nature of LLCs, since they are entities that can be:
Disregarded entity: If the company is owned by a single person, it is not considered a separate entity from that person for tax purposes.
Pass-through entity: Income generated by an LLC must be reported on each owner's individual tax return, without being subject to corporate tax.
Thus, the income of an LLC will always be treated as if it were generated by its owners and not by a corporation:
If an LLC has only one owner it is considered a pass-through and disregarded entity.
If an LLC has two or more owners it is only considered a pass-through entity.
Now that we know that the LLC will not be taxed as a corporation, you are probably wondering who pays the taxes on the profits. But since the taxation must be done on a personal level and not as a business, the owners will have to declare those profits. But reporting does not mean paying (taxing). Profits earned through an LLC must always be reported to the Internal Revenue Service (IRS).
The good news is that since you are a non-U.S. tax resident alien (i.e., you do not live in the U.S. for more than 183 days per calendar year), you will not be subject to personal income tax. You will not be subject to personal income tax.
4. Possibility to apply for a Visa to live and work in the U.S.
Another great advantage of creating an LLC as a foreigner is the possibility of applying for an E-2 Investor Visa, which allows you to live and work in the United States. The E2 visa is a great option for investors and entrepreneurs. With an E2 visa, you can live in the United States, start a business in the United States and work for your business, and it also allows the first level family to have a legal status in the United States, including working and/or studying.
5 years validity
Renewable indefinitely as long as the business is in force
Minimum investment $100,000. (No minimum investment is stipulated by rule, but below $100,000 the likelihood of approval decreases).
To obtain an E2 visa, you must invest a substantial amount of capital in a U.S. business and you must manage and develop that business. To obtain the visa you can either create a new business or invest in an existing business to obtain an E2 visa. In our other publication you can see a complete guide about the E2 visa.
Summary:
The E2 visa is a nonimmigrant visa for investors.
An E2 visa can be obtained if a substantial investment is made in a U.S. business or start-up company. For example, the acquisition of a franchise.
The E2 visa can be renewed over and over again as long as the business continues to operate and meets the E2 requirements.
5. Open a business bank account in the United States without traveling.
Another advantage of opening an LLC that especially motivates those who want to make transactions in dollars is to open a business bank account in the United States without having to travel.
The integration with the American market is much easier when the same currency is used, being able to grant local payment facilities to both clients and suppliers, minimizing transaction costs and allowing business that could not be done in any other way to materialize.
It is common to find suppliers and customers who only want to receive payments or pay to U.S. accounts.
And not only that, because if the project is scaled up and has a good track record known to the bank, it may even be possible to access credit, and given the characteristics of the United States, this will most likely be cheaper than in other parts of the world. Usually annual interest rates in the U.S. are between 0.5% and 4%.
In addition, it allows separate handling of the company's money, facilitating its management and accounting, while allowing the company to comply with the requirements for maintaining limited liability.
The requirements to open a commercial bank account in the United States are mainly:
Have a business in the U.S.
Be at least 18 years old
Have a valid passport
Tax ID/EIN (company's tax identification number)
To open a bank account you can choose between two types of banks, traditional banks or neobanks*. The latter allow you to open an account remotely without having to travel to the United States.
List of recommended traditional banks:
List of recommended Neobanks:
*Neobanks represent a novel option in today's financial services. They are purely digital entities that were born to operate in a technological ecosystem that does not require physical branches.
6. Accessing marketplaces and using payment gateways restricted in some countries.
The world's largest online sales platforms of American origin, as well as payment platforms, are limited to having users who are U.S. residents only. An example of these companies are: Amazon, Ebay, Stripe,....
However, U.S. companies have access to virtually any platform. That is, by being the owner of an LLC, you can have an Amazon account and you can receive card payments through stripe.
Thus, despite not living in the United States, many people form an LLC motivated by the access it gives them to certain pages, which they can use to do business that otherwise could not be done.
One of the clearest examples is the Fulfillment By Amazon (FBA) program, which allows users to send merchandise to Amazon's warehouses so that the company can ship it to the end customer. In this way, they can sell products in the USA without having a warehouse or logistics company.
For many individuals and companies, this business model is a great opportunity to sell products, because it is the largest and best known online marketplace in the world.
And something similar happens with payment gateways like Stripe, which only accepts some countries (only two Spanish-speaking countries, Spain and Mexico).
If you are a content creator, you can monetize your audience.
Every day there are more content creators around the world, but not everyone has access to the same income. For example, a content creator in the U.S. may receive recurring payments for the volume of their audience in their publications. On the other hand, a content creator in Colombia (and many other countries), cannot access this type of charges, because he/she has no fiscal link with the US.
But that has a solution by owning a company in the US, an LLC. By registering, there is already an entity that declares taxes and in this way, content creators can access to charge what was impossible before.
7. No bureaucratic requirements
Unlike other types of companies, LLCs are not required to make accounting reports, saving a great deal of time and accounting services. You only need to file a balance sheet.
Also, unlike other types of companies such as Inc. companies, LLCs do not require the definition of Articles of Incorporation, providing greater flexibility in terms of the management of the entity itself.
The only document that serves to regulate the partners in an LLC is called Operating Agreement and is optional in most states, however we highly recommend it to avoid conflict situations in the future.
Likewise, meetings of directors or shareholders are not necessary either, because there are no such figures, and, therefore, minutes of meetings should not be prepared either. Saving time and costs.
And a very important point when there is more than one owner in an LLC, is that the percentage of ownership should not be linked to the percentage that is applied at the time of distributing the profits.
That is, there can be two partners each with 50% ownership of the LLC. But owner one receives 70% of the profits and owner two receives the remaining 30%.
8. Protect your privacy with anonymous LLCs
There are many states that do not publicly disclose the personal data of the members of the LLCs registered there. It is very important to note that at the time of processing the TAX ID/EIN, you must indicate to the government who the owner is, so it is anonymous to the public, but not to the government.
Some of the states that allow anonymous LLCs to be registered are: Delaware, Wyoming, New Mexico, New York, New York, Ohio and Michigan. Florida is not part of this list.
This represents an important benefit for certain individuals who do not want to see the confidentiality of the business they conduct threatened.
Pero, ¿Cuál es la principal razón para formar una LLC anónima?
Publicly hiding the relationship you have with different businesses, very useful if you want to avoid the intrusion of third parties, for example. Thus, anonymity is not about avoiding tax declarations or hiding assets, but simply that such information is not public knowledge.
9. EV SSL protection for websites
Creating an LLC is also beneficial for strengthening the security of a website through the EV SSL certificate, or Extended Validation SSL certificate. Especially if your business is based on online sales, where reputation and security are fundamental values to close sales.
The SSL certificate shows in the browser a padlock next to the url, which indicates that the website encrypts the information sent to it, such as passwords and credit card numbers.for this type of certificate is not required to have an LLC, or even a company. The EV SSL certificate, on the other hand, is exclusive to companies legally registered in the USA.
This certificate, unlike the typical SSL, shows a green bar instead of a simple padlock, which lets users know that the site they are on is a real business, resulting in greater trust and willingness to buy.
This is because, by requesting such a certificate, the existence of the company is validated through official records.
At Kabir International Group we are experts in this type of processes and in the registration of companies in the United States. We will be happy to answer your questions and help you to have your own company in the United States.