A growing number of entrepreneurs from the United Kingdom and the European Union are choosing to establish businesses in the United States. Among the available structures, the Limited Liability Company — the LLC — has become by far the most popular choice for non-resident founders. Understanding why reveals a lot about what the structure actually offers and whether it is the right choice for your situation.
Limited Liability Protection
The primary reason founders choose LLCs is the protection against personal liability. If the business incurs debts, faces lawsuits, or experiences financial difficulty, the personal assets of the members are generally protected — only the company's own assets are at risk. This is comparable to the limited liability provided by a UK limited company (Ltd) or equivalent EU corporate structures. For entrepreneurs building new ventures or experimenting with a new market, this protection provides a meaningful and reassuring layer of security.
Operational Simplicity
Unlike corporations, which require formal boards of directors, shareholder meetings, and detailed governance documentation, LLCs can operate with far fewer formal requirements. Members can manage the company directly or appoint managers — whichever suits the business. Formation itself involves choosing a state, filing Articles of Organization with the Secretary of State, appointing a registered agent, and creating an operating agreement. Most founders complete the entire process online without visiting the United States.
Tax Flexibility
By default, LLCs are treated as pass-through entities for US federal tax purposes — the company itself does not pay federal income tax; profits and losses pass through to the members who report them individually. For many non-resident founders providing services remotely from outside the US, this can mean no US federal income tax on business income — because the income is not Effectively Connected Income. Tax treatment is genuinely complex for non-residents, however, and depends on where services are performed, the founder's country of residence, and applicable tax treaties. See our US tax overview for foreign LLC owners for more detail.
No Restrictions on Foreign Ownership
US LLCs can be owned by a single individual, by multiple members, by other companies, or by foreign nationals with no US citizenship or residency. There are no restrictions preventing non-US residents from forming or owning a US LLC. Ownership percentages and profit distributions can be structured flexibly in the operating agreement. This makes the LLC directly accessible for UK and European founders without additional structuring complexity.
Access to US Payment Processing and Banking
This is one of the most practically significant advantages for online businesses. Through a US LLC, UK and European founders access Stripe and PayPal at US domestic rates, with the full product suite. They can open US business bank accounts at Mercury, Relay, or Wise Business — receiving ACH payments without international wire fees or delays. US clients can pay domestic invoices through normal accounts payable workflows. The commercial friction of being a foreign vendor largely disappears.
Credibility with US Customers and Partners
A US-registered entity with a US bank account and a US business address carries a different trust signal with American buyers than a foreign company invoicing from a UK or EU account. For e-commerce businesses, SaaS products, and professional services firms building a US client base, this credibility difference is commercially meaningful.
Popular States for LLC Formation
Wyoming is the most popular choice for online businesses and international entrepreneurs — low annual fees ($60 minimum), no state income tax, strong privacy protections, and simple compliance. It is the right choice for most non-resident founders without immediate VC plans. For a detailed breakdown, see our Wyoming guide.
Delaware is the standard for venture-backed startups and companies preparing to raise institutional capital. Most US VCs require Delaware. See our Wyoming vs Delaware comparison.
New Mexico requires no annual report and no annual fee — the lowest-maintenance formation state, popular among digital nomads and founders who want minimal ongoing administrative obligations.
What Non-Resident Founders Must Know
Despite their advantages, US LLCs come with obligations that must be understood from the outset. Foreign-owned single-member LLCs must file Form 5472 with the IRS annually — a $25,000 penalty applies per form per year for non-filing, regardless of whether any tax is owed. An EIN is required before a bank account can be opened or payment processors registered. FinCEN BOI reporting under the Corporate Transparency Act applies from formation. Getting these right from day one is far less expensive than correcting them later.
Start Your US LLC the Right Way
We help UK and European founders form US LLCs entirely remotely. Our licensed Enrolled Agent Richard Williams handles IRS paperwork directly and advises on cross-border compliance from day one.
Can Non-Residents Own a US Company?
Do Foreign LLC Owners Pay US Tax?
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