How to Start a Business as a Non-U.S. Resident

Ownership Doesn't Depend on Where You Live

State business formation law governs who can own a business entity formed in that state, and no state's statute conditions ownership on citizenship or U.S. residency. A non-U.S. resident can be the sole owner of an LLC or corporation, a co-owner alongside U.S.-based partners, or a sole proprietor operating under their own name, the same as any other owner. The one requirement every state does apply regardless of where the owners live is a registered agent with a physical street address in the state, since that's where the state and any process server sends legal notices.

Choosing a Structure as a Non-U.S. Resident

Most of the same structure considerations apply to a non-U.S. resident as to a U.S.-based owner: a sole proprietorship needs no state filing but offers no liability protection, while an LLC or corporation separates personal assets from business debts in most instances for a state filing fee. See how to choose a business structure for the full comparison. If you choose an LLC, see can a non-U.S. resident form an LLC for the LLC-specific formation and tax details.

Filing the Formation Paperwork From Abroad

The formation filing itself, Articles of Organization for an LLC or Articles of Incorporation for a corporation, is the same document any applicant files, and most state portals and formation services accept filings and payment from outside the United States. A non-U.S. resident can typically list a foreign home address as the business's principal address; only the registered agent's address must be in-state.

Getting an EIN Without a Social Security Number

Most businesses, and every business with more than one owner or any employees, need a federal Employer Identification Number. The IRS's free online EIN application is limited to applicants who have a Social Security number or Individual Taxpayer Identification Number. Without either, you can still get an EIN by filing Form SS-4 and applying by phone, fax, or mail, noting "foreign" on the line asking for an SSN or ITIN. This takes longer than the instant online process, so apply as soon as your state approves your formation filing if you need the EIN to open a bank account.

Extra IRS Reporting for a Foreign-Owned Business

A single-member LLC that is at least 25% foreign-owned and treated as a disregarded entity has an information-reporting duty a wholly U.S.-owned business doesn't: filing Form 5472 along with a pro forma Form 1120 every year the business exists, even in a year with no U.S. activity. The IRS states the penalty for failing to file is $25,000, with an additional $25,000 for every 30 days the failure continues after an IRS notice. This applies specifically to the disregarded-entity LLC structure; confirm with a tax professional whether it applies to your specific structure and ownership.

Personal Tax Filing as a Non-U.S. Resident Owner

An EIN identifies the business to the IRS; it doesn't identify you personally for a personal tax return. A nonresident alien owner who needs to file a personal U.S. return and doesn't have a Social Security number applies separately for an Individual Taxpayer Identification Number using Form W-7. Whether, and how, your business income is taxed depends on whether it's "effectively connected" with a U.S. trade or business and on any tax treaty between the U.S. and your home country, so talk to a tax professional who handles cross-border filings before assuming your tax exposure.

Opening a U.S. Bank Account From Abroad

Banks generally require an EIN before opening a business account, and many also require the account holder to verify identity in person at a U.S. branch, which can be harder to arrange from abroad. Bank policies for foreign owners vary significantly, so research a specific bank's requirements before counting on same-day account opening.

A Registered Agent Service Is the Practical Starting Point

Since a non-U.S. resident rarely has a qualifying in-state address, a paid registered agent service is usually the realistic way to satisfy an LLC's or corporation's registered agent requirement. LLC Register's $99-a-year registered agent service includes LLC formation in year one and annual report filing, with state fees passed through at cost.

Budget Extra Time for the EIN

Because the online EIN application isn't available without an SSN or ITIN, budget extra time, often a few weeks, for a phone, fax, or mail application. Start this as soon as your state approves your formation, not after, if you're working toward a deadline like opening a bank account or signing a lease.

Form 5472 Applies Even to an Inactive Business

The foreign-owned disregarded entity reporting requirement applies every year the business exists, including a year with no sales or U.S. activity. Many new foreign owners miss this because they assume an inactive business has nothing to report, but the IRS's filing requirement, and its $25,000 penalty, apply regardless of activity level.

Owning a Business Doesn't Grant Work Authorization

Forming and owning a U.S. business does not, by itself, give you the right to work in the United States or any immigration status. If you plan to live or work in the U.S. in connection with the business, that depends on immigration law, a separate question from business formation.

This Is Not Legal or Tax Advice

Cross-border tax and immigration questions depend heavily on your specific facts and your home country's treaty position with the U.S. Talk to a tax professional and, if relevant, an immigration attorney before you assume how your situation will be treated.