Julian Drago
Stanford GSB · Business Scaling Program
Program University of Buenos Aires · Public Accounting
Date published:
March 12, 2025
Last updated:
August 19, 2026
Expanding your business to the United States or starting a new venture there requires careful planning, especially when selecting the right legal structure. A Limited Liability Company (LLC) is a popular option among entrepreneurs from around the world due to its flexibility and liability protection. In addition, this structure can offer advantages in terms of management, owner liability, and tax treatment, depending on the characteristics of the business.
Before forming an LLC, it is important to understand the requirements of the state where it will be registered, the applicable tax obligations, and the responsibilities involved in keeping the company compliant. Making the right choice from the beginning can simplify business management and lay a solid foundation for growth and expansion in the U.S. market.
An LLC is a hybrid business entity combining features of corporations and partnerships. It legally separates the business from its owners, called members, protecting their personal assets from company liabilities. LLCs offer flexible management options and favorable tax treatment, as profits and losses typically pass through to members’ individual tax returns, avoiding double taxation common in traditional corporations.
Foreign entrepreneurs must provide a valid passport as identification. A physical address within the state of formation is mandatory for official correspondence; this can be a virtual office or a registered agent’s address.
The name must be distinguishable from existing entities in the state and comply with state-specific naming rules, which may restrict certain words. Reserving the name early can secure it during the formation process.
While you can form your LLC in any state, popular choices like Delaware, Wyoming, and Nevada offer benefits such as business-friendly laws and privacy protections. If you operate in other states, you may need to register as a foreign LLC there, incurring additional fees and compliance.
A registered agent is required to receive legal documents and official notices. This agent must have a physical address in the formation state and be available during business hours. Many service providers offer registered agent services for a fee.
Though not mandatory in all states, an operating agreement is highly recommended. It defines ownership percentages, management roles, profit distribution, and dispute resolution mechanisms, helping prevent conflicts and clarifying operational rules. For example, a two-member LLC from Spain included a clause specifying profit shares based on capital contribution, which prevented disputes during their first year of operation. However, some states like California require an operating agreement by law, while others do not, so check your state’s rules before deciding. When deciding whether to draft one, consider the complexity of your business and the number of members involved.
A practical case is a Colombian freelancer who used an operating agreement to outline decision-making authority, which streamlined project approvals and avoided delays. A key criterion for deciding to draft an operating agreement is whether your LLC has multiple members or plans to seek investors, as this document provides legal clarity and operational guidance. An exception to this is a single-member LLC operating in a state with minimal legal requirements, where an operating agreement might be less critical but still beneficial for clarity.
Additionally, if your LLC plans to add members or raise capital in the future, having an operating agreement from the start can simplify transitions and protect all parties involved.
Submit the Articles of Organization (also called Certificate of Formation) to the Secretary of State’s office in your chosen state. Filing fees vary by jurisdiction, typically ranging from $50 to $500. This officially creates your LLC.
The EIN is a federal tax ID issued by the IRS, necessary for tax filings, opening bank accounts, and hiring employees. Foreign owners can apply online or by mail; the process is free via the official IRS website (IRS.gov).
Depending on your business type and location, you may need specific licenses or permits. Some states require publishing a formation notice in local newspapers. If operating in multiple states, register accordingly to maintain compliance.
Separating business and personal finances is crucial for liability protection and financial management. U.S. banks typically require your EIN, formation documents, and identification. Some banks allow remote account opening, but many require in-person visits. For example, a Spanish entrepreneur successfully opened a business bank account remotely by partnering with a fintech platform specializing in international clients, which simplified the process and reduced travel costs.
Texas offers no state income tax and allows residents to act as their own registered agent, reducing costs. Requirements include a unique name, Texas physical address, and Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). File the Certificate of Formation online via the Texas Secretary of State portal. Annual Franchise Tax reports are mandatory even if revenue is below thresholds. A practical tip is to use the Texas Comptroller’s online tools to estimate franchise tax liability and avoid surprises.
Florida also has no state income tax and provides a fully digital LLC formation process through Sunbiz.org. Residents can serve as their own registered agent. Annual Reports must be filed between January 1 and May 1 to avoid a $400 penalty. The streamlined process suits service providers, real estate, and local commerce. An exception is for LLCs involved in regulated industries, which may require additional permits or disclosures.
You can establish an LLC in the U.S. without traveling or holding a visa. Below are practical examples for entrepreneurs from Latin America and Spain.
Mexican entrepreneurs benefit from proximity and trade agreements. Requirements include a valid Mexican passport and a U.S. physical address. The process involves name verification, appointing a registered agent, filing formation documents, and obtaining an EIN to open a bank account. A key decision criterion is choosing a state with favorable tax treaties or business incentives relevant to Mexican exporters.
For example, a Mexican exporter chose Delaware for its extensive tax treaty network, which reduced withholding taxes on cross-border payments. An exception is that some states may have higher annual fees, so balancing tax benefits with ongoing costs is important.
Colombian freelancers and agencies use LLCs to invoice in U.S. dollars and protect capital. Preferred states include Wyoming and Delaware. After registration and EIN acquisition, bank accounts can be linked to global payment platforms.
For example, a Colombian digital marketing agency used its Wyoming LLC to access U.S. clients and streamline payments, increasing revenue by 25% within the first year. An exception is that some Colombian entrepreneurs may face challenges with banks requiring additional documentation due to anti-money laundering policies. A practical tip is to prepare all requested documents in advance and consider fintech providers experienced with Colombian clients.
Due to currency fluctuations, Argentine service exporters use LLCs to safeguard income. Only an Argentine passport and U.S. commercial address are needed. Form the LLC, draft an operating agreement, and obtain an EIN to facilitate dollar-based transactions without forced currency conversions. An exception is that some Argentine entrepreneurs may face challenges with certain U.S. banks requiring in-person verification. A practical case is an Argentine consultant who successfully opened a bank account by visiting a U.S. branch during a business trip, overcoming remote verification limitations.
Chilean startups gain prestige and investment appeal by incorporating U.S. LLCs. Requirements include a Chilean passport and registered agent. After filing formation documents and obtaining an EIN, companies can open bank accounts to receive capital from North American investors.
A practical case is a Chilean tech startup that secured seed funding after establishing a Delaware LLC, which investors preferred for legal clarity. A key decision criterion for Chilean entrepreneurs is choosing Delaware for investor-friendly laws versus Wyoming for cost savings. An exception is that Wyoming’s lower fees may be preferable for early-stage startups with limited funding.
Despite dollarization, Ecuadorian entrepreneurs face limitations accessing some payment platforms. Forming an LLC with a valid passport and state address enables access to U.S. financial tools and e-commerce gateways. A key criterion is selecting a state with minimal ongoing compliance to reduce administrative burdens.
For example, an Ecuadorian e-commerce business chose Wyoming to avoid annual report complexities and fees. An exception is that some payment processors may require additional verification steps for Ecuadorian LLCs, so planning for extra documentation is advisable.
Spanish entrepreneurs use LLCs to test the U.S. market and simplify North American sales. Requirements include a Spanish passport, registered agent, and virtual U.S. address. Delaware is a favored state for investor-friendly structures. The process is fully remote, including EIN application and bank account opening. For example, a Spanish e-commerce business expanded sales by 30% after forming a Delaware LLC and opening a U.S. bank account, facilitating faster payment processing.
A practical tip is to partner with fintech providers experienced with Spanish clients to navigate banking requirements smoothly. An exception is that some banks may require additional proof of business activity, so maintaining clear records is important.
Consider an Argentine IT consultant deciding between Delaware and Wyoming. Delaware offers strong legal precedents and investor recognition, ideal for startups seeking venture capital. Wyoming provides lower fees and enhanced privacy, suitable for solo entrepreneurs prioritizing cost-efficiency. This decision depends on business goals, funding plans, and operational scope.
A key decision criterion is whether the business plans to raise external funding, which favors Delaware, or prefers minimal fees and privacy, favoring Wyoming. An exception is if the entrepreneur plans to operate primarily in a specific state, where local registration might be more practical despite higher costs. A practical case is a solo consultant who chose Wyoming to minimize expenses and protect privacy, while a startup founder seeking investors opted for Delaware to leverage its established legal framework.
A common challenge is staying compliant with annual filings and fees, which vary by state. For example, Florida’s $400 late filing penalty can be avoided by setting calendar reminders. Another challenge is opening U.S. bank accounts remotely; partnering with providers experienced in working with international clients can help facilitate this process.
A practical tip is to use specialized fintech platforms that serve foreign entrepreneurs, reducing the need for a physical presence. One exception is that some banks require in-person identity verification, which may require travel or assistance from a trusted representative in the United States. Additionally, foreign owners should be aware of IRS reporting requirements to avoid penalties.
For example, timely filing of Form 5472 and the pro forma Form 1120 with the IRS is essential for foreign-owned LLCs (Single-Member LLCs) to remain compliant and avoid severe penalties.
Forming an INC can provide your business with the legal structure it needs to grow with confidence, attract investors, and strengthen its credibility in the market. If you are considering whether a C-Corp or S-Corp is the right choice for your business model and need to structure your company in the United States, contact Openbiz.
As your third-party business formation partner, we help you file your Articles of Incorporation, appoint your Registered Agent, and obtain your EIN from the IRS, providing you with the solid corporate foundation you need to achieve long-term success.
Yes, non-residents can form an LLC without a visa or U.S. citizenship. They must provide valid identification and a U.S. physical address, often through a registered agent or virtual office. For instance, a Chilean entrepreneur successfully formed an LLC remotely by using a registered agent service and a virtual address, enabling full compliance without traveling to the U.S.
A registered agent receives official legal and tax documents on behalf of the LLC. Non-residents must appoint a third-party agent with a physical address in the formation state. U.S. residents can often serve as their own agent.
Consider factors like filing fees, annual requirements, privacy laws, and where you plan to conduct business. Delaware suits startups seeking investors, Wyoming offers low costs and privacy, and your home state may simplify compliance if you operate locally.
While not required in all states, an Operating Agreement is highly recommended to clarify ownership, management, and profit distribution, reducing future disputes. For example, a Colombian agency used an Operating Agreement to define member roles and profit shares, which helped resolve a disagreement amicably. Some states, like California, legally require it, while others do not, but having one provides legal clarity and operational guidance. If your LLC has multiple members or plans to seek investors, an Operating Agreement is essential to outline decision-making processes and protect all parties involved.
Generally, LLCs with foreign owners not operating in the U.S. do not owe federal income tax but must comply with IRS reporting. State taxes and fees vary. Consulting a tax professional is advisable.
Some banks allow remote account opening with proper documentation, but many require in-person visits. Using specialized service providers or fintech platforms can facilitate this process.
Reviewed by: Melissa Trejos, Compliance Specialist
Review date: August 2026
Last updated: August 2026 (Information valid for the 2026 tax year.)
This content was prepared through documentary research and human review by experts in U.S. taxation. Artificial intelligence assistance was used to optimize the writing, with all content supervised and corrected by the editorial team to ensure accuracy and clarity. This content is for informational purposes only and does not constitute professional advice. Consult an accountant or attorney before making a decision.
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