One of the great assets of Nevada is that it’s a business-friendly state open to foreigners.
Non-US citizens can register a limited liability company (LLC) in Nevada without needing a green card. After registering, they can easily operate their Nevada LLC and enjoy all the state’s benefits, like low tax rates and manageable compliance requirements.
Ultimately, LLCs are relatively straightforward to organize. Still, if you need help finding out whether this entity is right for you, we can lend a hand. This blog will explore the benefits of registering an LLC as a non-US citizen and how foreigners can open an LLC in Nevada.
Five Benefits of A Non-US Resident LLC
There are five commercial and practical advantages to organizing a non-US resident LLC.
When non-US citizens register LLCs, they gain personal liability protection. LLCs separate a foreigner’s personal assets from their venture. And by doing so, the owner’s home, car, and savings are protected should the company be sued.
Without personal liability protection, a business owner can be held accountable for offenses like fraud and negligence.
Eliminates Double Taxation
Another excellent benefit of forming an LLC is that it prevents companies from being double-taxed by the IRS.
Typically, corporations are taxed both at the entity and individual levels. But because LLCs are pass-through entities, their profits go straight to their owners, who pay their individual taxes.
Ownership & Management Flexibility
Ownership of an LLC is not limited to one non-US resident. An LLC can have several owners called “members,” ranging from individuals to IRAs. And when it comes to managing their operations, they have several options to explore.
Members can manage it or create a management structure with a board of directors or corporate executives. Additionally, they can hire a non-member manager to handle their day-to-day operations.
LLC formation for non-US residents is more challenging than forming sole proprietorships. But they’re still not as complex as most people think.
Foreigners only need to file a few documents. And should they find the process too challenging, they can always seek the help of a business formation specialist.
How to Open A Non-Resident LLC in the USA
Now that we’ve discussed some of the benefits of LLC formation in Nevada, let’s discuss the five requirements of forming one.
Determine Non-resident Alien Status
The first step non-US residents need to do when forming an LLC is to determine if they have a non-resident alien status.
This step is especially important since non-US resident LLCs can avoid paying income taxes. But this provision only applies if a business owner resides in countries that are not required to pay their federal income taxes in the US.
If members of an LLC want to avoid filing tax requirements to the IRS, they need to ensure each one has a non-resident alien status.
The IRS considers foreigners non-resident aliens if they are not the following;
A US citizen
A permanent US resident with a green card
File & Pay For Formation Documents
Once you’ve confirmed your non-resident alien status, you can start filing and paying for formation documents.
LLC formation in Nevada requires you to file and pay these forms with the Secretary of the State. The documents typically include your LLC’s Articles of Incorporation, List of Managers, and List of Officers.
Your formation documents will serve as the formal record of your Nevada LLC’s existence. Once the Secretary of State approves your application, you can apply for your business license.
Look For A Resident Agent
Nevada doesn’t necessarily require you to have a local address when organizing an LLC. But, you will need a resident agent to handle important legal and tax documents like the Service of Process or Notice of Litigation.
These documents initiate lawsuits and other important state mail like annual reports or statements. Additionally, having a registered agent is a prerequisite to your next requirement.
Apply For LLC Employer Identification Number
Every business entity in the country must have an official tax identification number or a tax ID.
Residents typically have their Social Security number (SSN). But non-US residents registering an LLC will need to apply for an Individual Taxpayer Identification Number (ITIN) or an Employer Identification Number (EIN) to the IRS.
We suggest completing an IRS Form W-7 and submitting it via email or mail.
Open A US Bank Account
Once you have a tax ID, you can open a US bank account.
The requirements for opening a business account vary from one bank to another. But they typically ask for your incorporation documents, your EIN, and two pieces of photo identification, like your passport or ID.
A local bank account will help you pay bills and invoices. Additionally, they can aid in managing merchant accounts and creating payment processors.
Register Your Non-US Resident LLC Today
Ultimately, the process of LLC formation for non-US residents in Nevada is pretty straightforward. But if you need more help working through each requirement, NCH’s business formation specialists are here to support you.
Our LLC formation services for Nevada provide non-US residents with a comprehensive legal and financial assessment. NCH’s legal representatives and formation specialists are trained to provide foreigners with a smart and safe option for business formation in the US.
To learn more, contact Nevada Corporate Headquarters at 1-800-508-1729.