What are the basics when foreign founders, who neither are dual citizens nor have a green card, start up an LLC in the United States, but operate it from their native country?
Requirements vary according to the native country. For example:
- Canadian: In addition to the US LLC, a Canadian citizen may also need to form a US C Corp to own the LLC, which would be owned through the local LLC.
- Spanish: Spanish law would generally treat the US LLC as a corporation.
- Belgian: Setting up a US LLC, but checking the box for corporate taxation, will generally result in the founder being listed as a shareholder and income as dividends.
It is recommended to consult a tax advisor and attorney in both the US and in the foreign jurisdiction to be certain that the foreign founder of a US start up is following the correct protocol.
Obtaining an FEIN:
Foreign founders of US startups will need to obtain an FEIN for their LLC, but they are not required to have an SSN or ITIN. When completing form SS-4, be sure to write foreigner in line 7b (requesting SSN or ITIN). Contact Virtual Paralegal Services for assistance.
This aspect of starting up a foreign owned US LLC is more complicated and generally must be done after the founder has obtained an FEIN. There are several options:
- Choose a mega bank that has branches or affiliates in the founder’s country. This will enable him to set up his account in his own country and build a US banking relationship from home base.
- If the country is an official signatory of The Hague Convention, as is the US, and his chosen bank accepts it, he can get an apostille attached to his paperwork to avoid coming to the US.
- The foreign founder makes a trip to the US and appears in person at the bank with passport, and corporate documents in hand.
For assistance with US LLC startups, contact Virtual Paralegal Services.