How do I form a U.S. LLC?
First, you will want to know if there is a tax treaty with the U.S. and your home country. You will want to know if your new LLC is engaged in a U.S. business or has a permanent establishment. You will also want support with figuring out which state is best for your LLC and business before formation. Once you are clear on the federal and sales tax consequences you are ready to form your LLC. You will want a registered agent that works with foreign clients and has the resources to keep you on track with U.S. taxation. You will want to make sure you have a complete LLC formation, which includes the correct LLC management structure, operating agreement, minutes and resolutions, membership certificates, virtual address, EIN, and that the taxation structure is correct.
How do I set up a U.S. bank account?
In order to establish a U.S. bank account, you will need a U.S. entity first. You may find online money transfer services that will move money from the U.S. to your foreign country, but that is not a fully functioning bank account. In order to establish a U.S. bank account, you will need to travel to the U.S. and appear at the bank in person. The entity documents will be required along with a lease agreement matching the address on file with the LLC. The banks will want a utility bill with the same name and address and ID on the signers. Even with travel, many banks want to conduct a local office inspection. NCP does have a fully-functioning online banking option included with their U.S. LLC packages, does not require travel.
Do I need a U.S. address for my LLC?
A U.S. virtual address is recommended for mailing purposes especially for e-commerce sellers who will receive more mail due to sales tax registrations in states where they create sales tax nexus. A U.S. virtual address service will help when you obtain an EIN, to ensure you receive the IRS letter that is required for a U.S. bank account. You will want a service that not only offers options to scan, and/or forward mail but really understands what time-sensitive documents you are receiving and how they should be handled. A U.S. address also comes into play when providing your business information to open your new Amazon account. Many times, it is required when you import your goods into the U.S. (importer of record shipping document) or working with a U.S. supplier.
Do I need to pay U.S. sales tax?
Yes, if you have sales tax nexus. Most common is if you are selling a product subject to sales tax and you cross an economic nexus threshold in any of the 44 states with economic nexus thresholds. There are 26 states where 200 transactions will create sales tax nexus and begin your requirement to collect and remit sales tax. If you are selling on a marketplace facilitator such as Amazon, eBay, Walmart… there are 41 marketplace nexus states where the marketplace facilitator will collect and remit sales tax. This leaves a few states your entity may be responsible for collecting and remitting sales tax. Even if you ship your products outside the U.S., your company may cross the economic thresholds and need to collect and remit. Once you determine in which states you have sales tax nexus your company will need to register for sales tax permits.
How do I obtain an EIN for my U.S. LLC or foreign entity?
You will obtain an EIN from the IRS.gov. There are several elements that you must know before you fill out an SS4 application and fax it to the IRS for your U.S. LLC. If you obtain an EIN for a foreign entity you may call the IRS and answer questions over the phone, then fax your SS4 application at the end of the call. Caution: you must fill out the SS4 form properly especially section 9 a where you tell the IRS the type of entity and which tax return you will be filling. Get this incorrect and you are on a long road of dealing with the IRS to get this corrected after filing tax returns. Obtaining an EIN gets more complex when the US LLC is owned by a foreign entity. Expert support is recommended.
Do I pay U.S. taxes with an LLC?
If there is a tax treaty with the U.S. and your home country and there is only effectively connective income, but not a permanent establishment you will not pay U.S. taxes. It is recommended to file a protective U.S. tax return along with the IRS form 8833 for the treaty-based return position disclosure. A single-member LLC would file form 5472 and if owned by a foreign entity it would file the protect return and 8833.