Stephen L. Nelson, CPA, MBA, MS(tax)




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Can someone who isn't a US citizen form a limited liability company?

You can, even if you are not a US citizen or permanent resident, own an interest in a limited liability company located in the United States. Just so there's not confusion, let me also confirm that you can also be the sole owner--the single member--of a limited liability company located in the United States.

The only rub here is that the setup and maintenance of the LLC will be a little more complicated if you're living outside the US. But let me explain.

Tips for LLC setup by non-US citizens and residents

To form a limited liability company in the United States, you will need to work with a paralegal service, an accountant or an attorney to prepare and submit your limited liability company formation documentation. You will also need to get the paralegal service, accountant or attorney to act as your registered agent.

The registered agent requirement is really the only "setup" complication related to you not being a US citizen or permanent resident. So let me talk about the registered agent issue just a little bit more. A registered agent is just a real live human being who resides (or a business with real live human beings which operates) in the state where you set up your LLC.

You need a "real person" to be your registered agent so the state and anyone else has someone they can contact if they have questions about or problems with your limited liability company. Typically online paralegal services, any attorney or law firm, many accountants, and even specialized "registered agent" services will for a modest fee act as your registered agent.

Tips for LLC operation by non-US citizens and residents

If you operate a limited liability company in United States, you will probably own a tax return to United States and to the state in which you form your new limited liability company. That will probably mean that you need to work with a US accountant to file those federal and state income tax returns.

Tip: The accountant who prepares your federal and state tax returns will probably happily take on the role of "registered agent" if you ask.

Let me make one final comment about a non-US citizen or permanent resident operating a limited liability company located in the US. You should know that a US limited liability company will often have a duty to withhold taxes from remittances paid to non-US citizens or non-permanent residents.

For example, if you and a partner set up a California limited liability company to run an online internet venture in the United States, when the California limited liability company disburses money to you and your partner, the state of California will want the LLC to withhold California income taxes from those payments and then pass along those withholding amounts to the state revenue agency. (You can, by the way, form your limited liability company in a state which doesn't collect income taxes--like Nevada, Washington, and so forth.)

Note, too, that the federal government also typically requires withholding in the case where a multiple member limited liability company makes disbursements to members who aren't US citizens or permanent residents.

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Additional LLC-related Tax Resources

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