There are several reasons to register a US LLC. The USA continues to be one of the largest economies in the world, and companies registered here enjoy a high level of trust from customers worldwide. In addition to this, most services related to LLCs can be acquired at affordable rates. The most common question that people have is the tax implications of owning and operating a US LLC. This article addresses the issues you should consider before you register a US LLC.
Forming a limited liability company in the US
If you’re in the US, then you’ll need to file a certificate of incorporation (also called a Certificate of Formation, or LLC). This document must be filed with the Secretary of State’s office. You’ll need to pay a fee based on your state’s business laws. However, if you’re in another country, you can file the document online and it will be accepted.
While choosing a name for your new LLC, you should make sure it is original and has not already been taken by another LLC. You can’t have more than one Limited Liability Company with the same name. However, you can choose a name from a state’s official business directory. The Secretary of State’s business directory is a useful resource when deciding on a name for your new company.
Once you’ve chosen the name for your company, you can begin the process of filing your articles of organization and establishing your business entity. First, you’ll need to apply for an
Employer Identification Number, or EIN. This number is like the business version of your Social Security number. You’ll need this for filing employment taxes and bank accounts. Additionally, you’ll have to register with the labor and sales and asian tax departments in your state.
Tax implications of owning a U.S. LLC as a non-resident alien
There are some key differences between owning a U.S. LLC and owning a foreign entity. First, if you are a non-resident alien, you are taxed at a lower rate. For example, a non-resident alien who owns stock in a U.S. corporation may be subject to fewer tax laws than a U.S. citizen. Additionally, a non-resident alien will have fewer tax advantages than a U.S. citizen or resident alien. Consequently, you should check the tax implications of owning a U.S. LLC before moving to a foreign jurisdiction.
First, there are certain requirements a non-resident alien has to meet. For example, the LLC should be owned by a person who is not a U.S. citizen or a resident alien. Non-resident aliens who own a foreign-owned LLC should consider getting a non-resident TIN, which is an employer provided tax number.
Forming a foreign-owned U.S. LLC
Before you can start your business, you must establish a physical address in the state you intend to register in. You will use this address for all correspondence, state registration, and tax purposes. Additionally, you must apply for a nine-digit Employer Identification Number (EIN). This number is required when filing taxes in the United States. This EIN is required for any foreign-owned U.S. LLC.
A foreign-owned LLC can be tax-deferred in many states. However, foreign investors are not equal partners in the business, and there may be a lack of financial information shared between them. Foreign investors may also wonder if they can sue each other. However, the key to opening a foreign-owned LLC is choosing a name. After all, a name is your business identity, so you should choose a name that suits your business well.
Filing Form 5472
You must file Form 5472 for US LLCs with foreign ownership, or if you own a US LLC and wish to do business in the United States. This form is required by the IRS and lists transactions between the foreign entity and the reporting company. The Form 5472 can either be printed and filled out by hand or you can use your computer to fill it out and sign. You should print it on 8.5″ x 11″ regular white paper. It contains the basic information about the reporting corporation.
The form is only required for US LLCs with at least 25% non-US shareholders. Non-US LLCs, on the other hand, are not required to file 5472. US LLCs with more than 25% non-US owners are exempt from filing the form. In the past, this form was required for US corporations.
Nevertheless, the IRS has not released its back-office procedures so that foreign countries can search it.