For international entrepreneurs and digital nomads running online businesses, filing a US LLC can be a game-changer.
The US market offers unparalleled credibility, access to global banking, and simplified entry into the world’s largest economy. However, not all states are created equal for international online businesses. Choosing the right one can impact taxes, privacy, and compliance costs.
This article explores the top three US states for filing an LLC specifically tailored to international online businesses, the pros and cons of each, and why forming an LLC is crucial for digital nomads and global entrepreneurs.
Why Form an LLC for an International Online Business?
An LLC in the US is highly advantageous for international entrepreneurs for the following reasons:
- Global Credibility: A US-based LLC instills trust with customers, suppliers, and financial institutions worldwide.
- Simplified Banking: Provides access to US banking and payment processing services, which are often essential for international transactions.
- Tax Advantages: Depending on the state and business operations, non-resident LLC owners may avoid paying US income tax on foreign-earned income.
- Limited Liability: Protects personal assets from business liabilities or legal issues.
- Ease of Management: Simple structure and fewer compliance requirements compared to corporations.
For digital nomads and global entrepreneurs, a US LLC bridges the gap between operating internationally and accessing the benefits of a US business entity.
Wyoming is a landlocked state in the Mountain West subregion of the Western United States. It borders Montana to the north and northwest, South Dakota and Nebraska to the east, Idaho to the west, Utah to the southwest, and Colorado to the south
Top 3 US States for International Online Businesses
1. Wyoming
Why Wyoming?
Wyoming is an excellent choice for international online businesses due to its affordability, privacy protections, and minimal regulatory requirements.
Pros:
- No State Income Tax: Non-residents avoid paying state income taxes, saving costs.
- Privacy Protection: Does not require disclosure of LLC owners (members) in public records.
- Low Annual Costs: Minimal annual report fees ($60) and low filing costs.
- Global Accessibility: No physical presence is required; you can manage your LLC entirely online.
- Flexible Banking: Many US banks and fintech companies accept Wyoming LLCs for international banking.
Cons:
- Limited Banking and Credit Services: Some international entrepreneurs may face hurdles with smaller local banks.
- Perception of Prestige: Wyoming is less recognized globally compared to Delaware.
Delaware, a small Mid-Atlantic U.S. state, sits on a peninsula marked by dune-backed beaches bordering the Atlantic Ocean, Delaware River and Delaware Bay. In Dover, the capital, First State Heritage Park encompasses 18th-century Colonial landmarks like the Georgian-style Old State House. The city of Wilmington is known for the Riverfront, a waterside district of parks, boutiques and restaurants
2. Delaware
Why Delaware?
Delaware is a global leader for business entities, making it a popular choice for international entrepreneurs looking to establish credibility.
Pros:
- Global Recognition: Widely respected for its business-friendly legal system, enhancing your company’s image.
- Business-Friendly Courts: A specialized Court of Chancery handles business disputes efficiently.
- No Corporate Taxes on Foreign Operations: International LLCs operating outside the US can avoid Delaware’s state corporate income tax.
- No Sales Tax: No state-level sales tax on your products or services.
Cons:
- Higher Costs: Annual franchise tax of $300 and potentially higher filing fees.
- Extra Steps for Non-Residents: International owners may need assistance obtaining an EIN (Employer Identification Number) and setting up a US bank account.
- Foreign Qualification Costs: Operating outside Delaware may require registering in another state, increasing costs.
Carson City, officially the Consolidated Municipality of Carson City, is an independent city and the capital of the U.S. state of Nevada. As of the 2020 census, the population was 58,639, making it the 6th most populous city in the state
3. Nevada
Why Nevada?
Nevada combines tax advantages with strong privacy laws, making it an attractive option for international online businesses seeking asset protection.
Pros:
- No State Taxes: No state income, corporate, or franchise taxes, making it cost-effective.
- Privacy: Does not require public disclosure of LLC members, ensuring anonymity.
- Asset Protection: Strong laws shield members’ personal assets from business liabilities.
- Proximity to Financial Hubs: Located near Silicon Valley, Nevada benefits from its proximity to major tech and business ecosystems.
Cons:
- Higher Maintenance Costs: Initial filing fees and annual costs are higher than Wyoming.
- Complex Compliance: Requires adherence to stricter compliance laws, which might be cumbersome for non-residents.
- Residency Requirements: You’ll need a registered agent and a physical address in Nevada.
Which State Is Best for International Entrepreneurs?
- Wyoming: The most affordable and straightforward option for digital nomads and international entrepreneurs who prioritize low costs and privacy.
- Delaware: Best for those seeking global recognition and a robust legal framework, particularly if they plan to scale their business.
- Nevada: Ideal for entrepreneurs needing strong asset protection and privacy while benefiting from a tax-friendly environment.
Special Considerations for International Owners
- Obtaining an EIN: An EIN is required for US banking and tax purposes. Non-residents can obtain one through the IRS, though the process may take longer.
- US Bank Accounts: A US LLC can open bank accounts, but owners may need to visit the US or use services like Mercury or Wise for international-friendly solutions.
- Professional Assistance: Hiring a registered agent and consulting with a business attorney familiar with international clients is highly recommended.
Conclusion
For international online businesses and digital nomads, forming a US LLC opens doors to global credibility, efficient banking, and strategic tax advantages. Wyoming offers simplicity and affordability, Delaware provides prestige and scalability, and Nevada delivers privacy and asset protection.
Choose the state that aligns with your business priorities, budget, and long-term goals. With the right foundation, your international online business can thrive in the global marketplace, leveraging the benefits of a US LLC.
Resources
Charles Bivona Jr., aka Coach JP Money, is a business strategist, financial coach, and founder of CoachJPmoney.com. A lifelong entrepreneur, he launched his first real estate deal at 17 and went debt-free by 1998. Since then, he has built national media brands, advised small businesses, and helped clients grow online using smart strategy, digital tools, and creative grit.
An expat living in Baja, Mexico, Charles also writes and produces music as Johnny Punish and lives off-grid at Hacienda Eco-Domes, a sustainable retreat he built with his wife. Through providing small business services, coaching, writing, and podcasting, he’s on a mission to help others win their future—on their terms.
Read his full bio at PunishStudios.com >>>
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