How to Form an LLC for Non-US Residents

Introduction to LLC Formation

• The video introduces the process of forming an LLC specifically for non-US residents and foreigners, outlining six essential steps.

• It mentions that Northwest Registered Agent can assist with the entire process at an affordable rate, allowing business owners to focus on their operations rather than compliance issues.

Legal Ownership and Terminology

• Non-US citizens are classified as "aliens," which includes both resident aliens (those meeting specific criteria like a green card or substantial presence test) and non-resident aliens.

• Both classifications can legally own an LLC in the US but must file different forms; however, this ownership does not grant work authority within the US.

Benefits of Forming an LLC

• Key benefits include asset protection, where personal assets are generally safeguarded from lawsuits or bankruptcy.

• LLCs require less maintenance compared to corporations, eliminating the need for board meetings or shareholder meetings.

• Establishing an LLC provides access to the US economy and enhances business credibility. Additionally, profits and losses can be passed through to members' tax returns.

Steps to Forming Your LLC

Step 1: Choose a State

• Selecting a state is crucial; if you have employees in a particular state, you must register there. Delaware is recommended for its favorable tax laws, while Wyoming offers lower taxes and more privacy.

Step 2: Choose a Name

• The chosen name must comply with state guidelines, including incorporating "Limited Liability Company" or "LLC." Ensure it’s not confused with government agencies and check availability via the Secretary of State's website.

Step 3: Hire a Registered Agent

• A registered agent handles legal documents on behalf of your business. This person must reside in the state where your LLC is formed. Services typically cost between $1-$150 annually; Northwest offers this service free for one year when forming your LLC through them.

Setting Up Your LLC with Northwest

• Viewers are directed to click a link in the description for step-by-step guidance on setting up their LLC using Northwest's services.

• The video outlines how users can start their formation process online by selecting their company type (LLC), choosing a state (e.g., California), and understanding associated filing fees.

How to Set Up an LLC for Non-Residents

Steps to Register Your LLC

• Begin by entering your business purpose and selecting both physical and mailing addresses. It is recommended to use the free registered agent service for the first year.

• Choose between a member-managed or manager-managed LLC. For most viewers, a member-managed LLC is preferable, meaning you will manage it yourself.

• After inputting your contact information, set up an account with your email and password. This leads to a business identity page offering a free domain name, website hosting, business email, and phone number for one year.

• Optional services include obtaining a Tax ID (EIN), which is necessary for registering your LLC. Northwest can assist with this if needed.

• If you're not a US resident or lack a Social Security number, check the option for EIN assistance. Additional services like mail forwarding and trademark registration are also available.

Filing Requirements

• The total cost of setting up the LLC includes $39 for the basic package plus processing fees totaling around $139. Ensure compliance in all areas when forming your LLC.

• Step four involves filing Articles of Organization with varying state fees (typically $20-$200). Your LLC isn't officially formed until this step is completed.

• Obtain an EIN number; it's essential as it acts like a Social Security number for businesses. Non-citizens without an SSN must file IRS Form SS-4 via phone or mail.

Opening a Bank Account

• To open a US bank account, you'll need your EIN number along with identification documents such as passports and articles of organization.

• Traditional banks require in-person visits to submit documentation, which can be challenging for non-residents. Online banking platforms like Mercury are recommended as they cater specifically to startups.

Addressing Mailing Needs

• A physical US mailing address helps in opening bank accounts and securing loans but isn’t mandatory. Using home addresses may compromise privacy; hiring registered agent services is advisable instead.

Federal Tax Obligations

• Non-citizen single-member LLC owners must file IRS Form 1040 while non-resident aliens need Forms 1040NR alongside 5472 and 1120 to report profits/losses accurately.

• For foreign-owned multi-member LLCs treated as partnerships, Form 1065 must be filed including Schedule K1; members report their share of profits on personal tax returns using Form 1040NR.

Resources and Support for Entrepreneurs

Conclusion and Call to Action

• The video encourages viewers to check the description for additional resources that can aid in business growth.

• Viewers are invited to like the video and subscribe for more content aimed at helping business owners and entrepreneurs.

• The channel focuses on providing tutorials designed to assist in business development.

• A message of support is conveyed, expressing encouragement for viewers' entrepreneurial journeys.