When you start a US company as a non-resident, you will quickly encounter two acronyms that sound similar but serve very different purposes: EIN and ITIN. Confusing the two — or applying for the wrong one — is a common mistake that can delay your business setup and create unnecessary complications with the IRS. This guide explains exactly what each number is, who needs it, and how the two interact for UK and European founders.
What Is an EIN?
An EIN, or Employer Identification Number, is a nine-digit tax identification number assigned by the IRS to identify a business entity. It takes the format XX-XXXXXXX and is sometimes referred to as a Federal Tax Identification Number or Federal Employer Identification Number (FEIN).
Despite the word "employer" in the name, you do not need to have employees to require an EIN. Almost any US business entity — LLC, corporation, or partnership — needs one. For non-residents who have formed a US LLC or corporation, an EIN is essential for:
- Opening a US business bank account — Mercury, Relay, Wise Business and all other platforms require it
- Registering with payment processors — Stripe, PayPal, and Square all require an EIN for US entity accounts
- Filing US federal business tax returns — including the Form 5472 / pro-forma Form 1120 that foreign-owned single-member LLCs must file annually
- Hiring US-based contractors or employees
- Applying for business credit
- Meeting compliance requirements under the Corporate Transparency Act BOI filing
An EIN belongs to the business entity, not to you as an individual. If you close your company and form a new one, the new entity will need its own EIN. Our Enrolled Agent Richard Williams handles EIN applications directly as part of our Wyoming LLC formation service — it is the first thing we obtain once your LLC is formed, and it is what unlocks your ability to open a US bank account.
What Is an ITIN?
An ITIN, or Individual Taxpayer Identification Number, is a nine-digit tax processing number issued by the IRS to individuals who need to file or be listed on a US tax return but are not eligible for a Social Security Number. It takes the format 9XX-XX-XXXX — always beginning with the digit 9, which distinguishes it from a Social Security Number at a glance.
Unlike an EIN, an ITIN is assigned to a person, not a business. It is used purely for federal tax administration purposes. It does not authorise you to work in the United States, does not entitle you to Social Security benefits, and cannot be used as identification outside of tax-related contexts.
An ITIN is typically required when a non-resident individual needs to:
- File a US individual income tax return (Form 1040-NR) — for example, if you have US-source income as an individual
- Claim a tax treaty benefit — such as reduced withholding rates under the US-UK tax treaty
- Receive certain types of US income subject to withholding — including rental income, royalties, or dividends from US sources
- Be listed as a responsible party on certain IRS forms where a Social Security Number would normally be required
The Core Difference: Business vs Individual
EIN = your business's tax ID number. It belongs to the company, identifies it to the IRS and to other businesses, and is required for virtually all US business activity. Every US LLC needs one before it can open a bank account or accept US payments.
ITIN = your personal tax ID number as a non-resident individual who has a US tax filing obligation but no Social Security Number. It belongs to you as a person, not to any company. Many non-resident LLC owners never need one at all — it depends on their specific tax situation.
Both can co-exist. A non-resident who owns a US LLC will always have an EIN for the business and may eventually obtain an ITIN for personal US tax filings — but the two numbers are entirely separate and serve entirely different functions.
Do Non-Resident LLC Owners Need an ITIN?
This is one of the most commonly asked questions, and the answer depends on your specific tax situation. Many non-resident owners of single-member LLCs do not need an ITIN initially — and some never need one at all.
A single-member LLC owned by a non-resident alien is treated as a disregarded entity for US tax purposes by default. This means the LLC itself does not file a separate income tax return in the way a corporation would. Instead, the owner files an informational return — Form 5472 attached to a pro-forma Form 1120 — to report transactions between the LLC and its foreign owner. This filing uses the company's EIN rather than the individual owner's personal tax ID. As a result, many foreign-owned single-member LLCs complete their US tax filings without the owner ever needing an ITIN.
An ITIN becomes necessary if:
- You receive US-source income as an individual — such as dividends, rents, or royalties — that requires a personal US tax return
- You need to claim a tax treaty benefit between the US and your home country
- Your LLC elects to be taxed as a corporation and you are receiving distributions subject to US withholding
- You become a partner in a US partnership that has US-source effectively connected income
When in doubt, the right question to ask is whether you have a personal US filing obligation — not whether you have a business filing obligation. Those are separate questions with potentially different answers. For more context on when US tax applies to your LLC income, see our guide on Effectively Connected Income.
How to Apply for an ITIN
Applying for an ITIN is considerably more involved than obtaining an EIN. You must complete IRS Form W-7 (Application for IRS Individual Taxpayer Identification Number) and submit it along with original identity documents or certified copies, a completed US federal tax return that the ITIN will be attached to, and documentation supporting your foreign status and eligibility.
The requirement to submit a tax return with your W-7 is the most important thing to understand. You generally cannot apply for an ITIN speculatively — you need a current US filing obligation that requires one. There are exceptions, such as for treaty benefit claims or certain withholding situations, but these come with their own documentation requirements.
Processing times for ITIN applications submitted by post typically run seven to eleven weeks, and significantly longer during peak filing season. Applications can also be submitted through an IRS Certifying Acceptance Agent (CAA), who can verify your identity documents in person, saving you from having to mail your original passport to the IRS — something most people reasonably want to avoid.
Can an ITIN Replace an EIN for Business Purposes?
No — and this is a mistake some non-residents make. An ITIN cannot be used in place of an EIN for business registration, bank account opening, or payment processor applications. Banks and payment platforms specifically require an EIN because they are verifying a business entity, not an individual. Similarly, an EIN cannot be used in place of an ITIN on a personal tax return. They are not interchangeable in any context.
Summary: Key Differences at a Glance
- Issued to: EIN — business entities; ITIN — individual people
- Format: EIN — XX-XXXXXXX; ITIN — 9XX-XX-XXXX (always starts with 9)
- Purpose: EIN — business tax identification; ITIN — personal tax ID for non-SSN holders
- Application form: EIN — IRS Form SS-4; ITIN — IRS Form W-7 plus a tax return
- Required for banking: EIN — yes, always; ITIN — no
- Required for personal US tax return: EIN — not applicable; ITIN — yes, if you have a personal US filing obligation
- Do most non-resident LLC owners need it? EIN — yes, immediately; ITIN — depends on individual tax circumstances
Practical Advice for UK and European Founders
If you have just formed a US LLC as a UK or European resident, your immediate priority is obtaining an EIN for the business. This is what unlocks your ability to open a US bank account, register with Stripe or PayPal, and start accepting US payments. See our banking documents checklist for everything else you will need ready before applying.
Whether you need an ITIN is a question that depends on your specific tax profile — the nature of your US income, whether you have any withholding obligations, and whether you need to claim treaty benefits. This is a conversation best had with a qualified US international tax professional before your first US tax filing deadline. What you should not do is apply for an ITIN instead of an EIN, or delay getting an EIN while trying to resolve the ITIN question. They are sequential requirements, not alternatives.
Need Help with EIN Applications or US Tax IDs?
We assist UK and European founders with EIN applications as part of our US company formation service. For ITIN questions and broader cross-border tax planning, our licensed Enrolled Agent Richard Williams advises on the right structure for your situation across both US and UK or European tax obligations.
US Banking Documents Checklist
Effectively Connected Income — When US Tax Applies
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