Yes, a non-U.S. citizen can own an LLC in the United States. No federal law requires LLC owners to be citizens, permanent residents, or even physically present in the country, and foreign nationals from any country can form and operate one. What ownership does bring is a set of tax withholding rules and reporting obligations that carry heavy penalties when missed, so the real question is not whether you’re allowed to own the company but whether you’re ready for what comes with it.
What You Need to Form the LLC
Three pieces of infrastructure make a foreign-owned LLC functional: a federal tax ID, a registered agent, and, for you personally, a taxpayer ID number.
Every LLC needs an Employer Identification Number from the IRS. International applicants without a Social Security Number apply on Form SS-4, and the IRS accepts these by phone at 267-941-1099 during Eastern-time business hours, by fax, or by mail to its Cincinnati office. Phone applicants get the EIN on the call; fax and mail applications can take two to three weeks.1Internal Revenue Service. Instructions for Form SS-4
You also need a registered agent in the state where the LLC is formed. This is a person or company with a physical address in that state who accepts legal documents and government notices for your business. Because most foreign owners aren’t in the country, hiring a commercial registered agent service is the standard route. State filing fees to create the LLC run roughly $70 to $300, and most states charge an annual or biennial fee to keep it in good standing.
For your personal U.S. tax return, you’ll likely need an Individual Taxpayer Identification Number. Foreign owners who earn income connected to a U.S. business have to file a personal return, and the ITIN is your ID for that filing. Apply with Form W-7 alongside the return and identity documents. A valid passport is the simplest supporting document because it satisfies the identification requirement on its own.2Internal Revenue Service. Instructions for Form W-7
The Bank Account Is Usually the Hardest Part
No law prevents a foreign-owned LLC from holding a U.S. bank account, but in practice this is where most foreign entrepreneurs hit real friction.3International Trade Administration. A Checklist for Foreign Companies Opening a Bank Account in the United States Each bank sets its own policies, and federal anti-money-laundering rules require them to verify every beneficial owner. For foreign nationals, that means additional documentation, longer review, and sometimes an in-person visit. Some banks want you to form a U.S. subsidiary before they’ll onboard you at all.
Plan on around three weeks from application to an active account. Have your EIN, formation documents, and passport ready before you approach a bank. If one turns you down, try another; policies vary widely, and banks with international business desks tend to be more accommodating.
How the IRS Taxes a Foreign-Owned LLC
Federal tax treatment depends on how many members the LLC has and whether it elects a different classification. By default, a single-member LLC is a disregarded entity, meaning the IRS taxes the owner directly and ignores the LLC as a separate entity. A multi-member LLC is treated as a partnership. Either can elect corporate taxation by filing Form 8832.4Internal Revenue Service. Limited Liability Company (LLC)
For foreign owners of disregarded entities and partnerships, the pivotal concept is effectively connected income. Income tied to a U.S. trade or business is taxed at the same graduated rates that apply to U.S. citizens and residents.5Internal Revenue Service. Taxation of Nonresident Aliens You report it on Form 1040-NR, the nonresident alien income tax return.6Internal Revenue Service. About Form 1040-NR, U.S. Nonresident Alien Income Tax Return
Multi-member LLCs taxed as partnerships file Form 1065 and issue a Schedule K-1 to each partner showing that partner’s share of income and deductions.7Internal Revenue Service. About Form 1065, U.S. Return of Partnership Income Each foreign partner then reports their share on Form 1040-NR. An LLC that elects corporate treatment files Form 1120-F as a foreign corporation instead.8Internal Revenue Service. About Form 1120-F, U.S. Income Tax Return of a Foreign Corporation That election also brings a 30% branch profits tax on after-tax earnings on top of the regular 21% corporate rate, which a treaty between the U.S. and the owner’s home country may reduce or eliminate.9GovInfo. 26 USC 884 – Branch Profits Tax Without a treaty, the combined rate makes the corporate election a poor default for most foreign-owned LLCs.
Withholding That Gets Taken Before You See the Money
The IRS doesn’t wait for foreign owners to file voluntarily. It collects at the source, and the withholding rules catch first-time foreign LLC owners off guard.
A multi-member LLC taxed as a partnership with effectively connected income allocable to a foreign partner has to withhold on that income before distributing it. The rate is 37% for individual foreign partners and 21% for corporate foreign partners, matching the top individual and corporate brackets.10Internal Revenue Service. Partnership Withholding The withholding acts as a prepayment of the foreign partner’s U.S. tax. The LLC reports it on Form 8804 and issues Form 8805 to each foreign partner, who claims a credit on their personal return. Forms are due by the 15th day of the third month after the partnership’s tax year closes (March 15 for calendar-year LLCs), and the partnership files them even in years with zero withholding.11Internal Revenue Service. Instructions for Forms 8804, 8805, and 8813
If the LLC sells U.S. real estate, the buyer must generally withhold 15% of the total amount realized under FIRPTA, regardless of whether the sale produced a profit.12Internal Revenue Service. FIRPTA Withholding The rate drops to 10% for residential property the buyer takes as a personal residence when the price doesn’t exceed $1,000,000.13Office of the Law Revision Counsel. 26 USC 1445 – Withholding of Tax on Dispositions of United States Real Property Interests You can apply for a reduced withholding certificate if the actual tax owed is less, but the default rule hurts if you’re not ready for it.
Form 5472 and the $25,000 Penalty
This is the single most commonly overlooked obligation for foreign-owned single-member LLCs. Any foreign-owned single-member LLC must file Form 5472 to report transactions between the LLC and its foreign owner or other related parties. Reportable transactions include capital contributions, distributions, loans, and payments for services. The form is due April 15 each year and is filed alongside a simplified Form 1120.
Failure to file, or filing an incomplete form, carries a $25,000 penalty per form.14Office of the Law Revision Counsel. 26 USC 6038A – Information With Respect to Certain Foreign-Owned Corporations If the IRS sends a notice and you still don’t file within 90 days, another $25,000 accrues every 30 days after that, with no cap.15Internal Revenue Service. International Information Reporting Penalties Each related party requires its own Form 5472, so penalties stack. The IRS does not waive them lightly.
FinCEN Beneficial Ownership Reporting After March 2025
The Corporate Transparency Act originally required most U.S. LLCs to report their beneficial owners to the Financial Crimes Enforcement Network. In March 2025, FinCEN issued an interim final rule exempting all U.S.-formed entities from that requirement.16Financial Crimes Enforcement Network. FinCEN Removes Beneficial Ownership Reporting Requirements for US Companies and US Persons If you formed your LLC in a U.S. state, as most foreign entrepreneurs do, you’re currently exempt.
The exemption doesn’t extend to foreign entities that register to do business in a U.S. state. If you own a company formed outside the United States and register it to operate here rather than forming a new LLC domestically, that foreign entity must file a beneficial ownership report with FinCEN within 30 days of its registration becoming effective.17Financial Crimes Enforcement Network. Beneficial Ownership Information Reporting The distinction matters when you’re choosing between forming a new U.S. LLC and registering an existing foreign entity.
Owning the LLC Is Not Permission to Work in the U.S.
Owning a U.S. LLC does not give you the right to live or work in the United States. You can own 100% of a U.S. company and still not be able to legally enter the country to run day-to-day operations without the proper visa. Ownership and immigration status are entirely separate.
Two visa categories come up most often for foreign LLC owners:
- The E-2 treaty investor visa, available to nationals of countries with a qualifying commerce treaty with the U.S., which requires a substantial capital investment and that you come to develop and direct the business, typically with at least 50% ownership or operational control.18U.S. Citizenship and Immigration Services. E-2 Treaty Investors
- The L-1 intracompany transferee visa, which lets a foreign company send a manager, executive, or specialized-knowledge employee to a related U.S. office after at least one continuous year of work for the foreign company in the previous three years.19U.S. Citizenship and Immigration Services. 20U.S. Department of State. Fact Sheet: U.S. Business Visas (B-1) and Allowable Uses The line between permitted business activities and prohibited employment is where many foreign LLC owners get into trouble. If you plan to manage operations, hire employees, or do hands-on work in the country, talk to an immigration attorney before booking the flight.