What an LLC is and how it works for a non-resident

What an LLC is

An LLC (Limited Liability Company) is a type of company registered by the states of the United States, not by the federal government. It has one or more owners — members — and its defining trait is that it separates the company's assets from the members' personal assets, on the terms set by the law of the state that registers it.

You do not need to be a US citizen or resident to form one: the states accept foreign members. That is why it is the structure that keeps coming up when someone living abroad wants to invoice US clients or work with US suppliers.

How it works

The company comes into existence when the state accepts its Articles of Organization. From that moment it needs to keep a Registered Agent in the state — an address that receives official notices — and, to operate, an EIN: the federal tax identification number issued by the IRS, which banks, payment processors and platforms ask for to identify the company.

How it runs internally is set by the Operating Agreement, a private document between the members that is not filed with the state. The recurring obligations depend on the state — many ask for an annual report with its fee — and on whichever federal information returns apply.

How the IRS classifies it at the federal level

At the federal level, the default classification the IRS publishes is that of a pass-through entity: a single-member LLC is treated as a disregarded entity — its results are attributed to the member — and a multi-member one as a partnership, unless the company elects to be taxed as a corporation. That is a general classification fact, not a reading of anyone's case.

A single-member LLC with a foreign owner also files Form 5472 every year, attached to a pro forma Form 1120: an information return about the transactions between the company and its member. It reports; it does not by itself settle any tax.

What an LLC is not

Forming an LLC grants no immigration status: it is not a visa, not a work permit, and it gives no right to live in the United States.

It does not move your tax residence either. Where you pay tax is set by the rules of your country of residence, and registering a company in a US state changes none of them.

• It is not a visa or a path to immigration residency.
• It is not a new tax residence: yours is defined by your country, under its rules.
• It is not a bank account: an account is opened — or not — by a bank, with its own verification process and its own criteria.