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.
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.
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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.
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.
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 the founder of Coach JP Money. He is a seasoned expert in financial coaching and wealth-building. A multifaceted visionary, Charles is also a writer, global citizen, eco-activist, musician, artist, entertainer, entrepreneur, investor, life coach, and syndicated columnist.
Charles’ journey began with a solid education in accounting, finance, and business at the University of Nevada, Las Vegas, and California State University, Fullerton. At just 17, he made his first real estate investment with no money down, igniting a lifelong passion for financial independence. By 1998, he had achieved debt-free status and has been building wealth ever since.
As an entrepreneur, Charles owned and operated five national newspapers in the U.S. before transitioning to digital media. He founded and managed influential online platforms, including HireVeterans.com (2004–2020) and VT Foreign Policy (2004–2023).
A proud expat since the late 1990s, Charles resides in Baja, Mexico, with his wife whom he married in 1985. Together, they have three adult children and seven grandchildren. Their eco-conscious home, built with sustainable super-adobe techniques, is now a luxury retreat known as Hacienda Eco-Domes.
Under his music alias Johnny Punish, a name coined during his days fronting the underground punk band Twisted Nixon, he continues to inspire through his art and advocacy through his newest musical adventure; Punish Studios.
Today, as “Coach JP Money” Charles dedicates his life to helping others achieve financial mastery and personal success, sharing decades of experience and wisdom through his coaching, writing, and creative endeavors.
Read the full bio at PunishStudios.com >>>
