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Which state should host your LLC and why?
Pick the state where the business actually operates. If you will run the company from India, with no US office and no US staff, pick a state whose rules you can live with for years: Wyoming and Delaware are the two that non-US founders settle on most. An LLC is created under state law, not federal law, so the state you file in becomes your company's legal home [1].
Quick Answer: Choose your formation state on three tests: where you actually do business, how much the annual state fee costs, and whether your bank or payment processor recognises the entity. Delaware and Wyoming are the popular defaults for non-US founders. Filing in a state where you do not operate adds foreign qualification costs later.
That last point trips people up. Form in Wyoming, then open an office or hire a person in Texas, and Texas wants you registered there too. That is called foreign qualification: you register the same LLC in a second state and pay a second set of fees and annual reports. It is legal and normal. It is also avoidable if you think first.
Here is the rough shape of the three realistic options. Government fees and third-party fees are kept separate on purpose, because they behave differently: the state fee is fixed, the agent fee recurs every year.
| State | Government filing fee | Annual state obligation | Registered agent needed | Notes for non-US founders |
|---|---|---|---|---|
| Wyoming | Check the current official fee | Annual report plus licence tax, due in the anniversary month | Yes, physical Wyoming address | Low fee, strong privacy, no state corporate income tax |
| Delaware | Check the current official fee | Annual franchise tax, due 1 June | Yes, physical Delaware address | Familiar to investors and banks, higher recurring cost |
| Your home state (if you live in the US) | Check the current official fee | Varies | Yes | Cheapest if you actually operate there |
Say your plan is a software agency selling to US clients from Bengaluru, paid through Stripe. You have no US office, no US employees, no US warehouse. Wyoming or Delaware both work. Your bank sees a US entity, your clients see a US company, and you file one annual report instead of two.
Delaware carries a reputation for predictability in its courts, and venture investors are used to seeing Delaware entities on a cap table. That reputation is real. It is also mostly irrelevant to a solo consultant. Do not pay Delaware's higher annual franchise tax just because a forum post told you Delaware is "the startup state".
If you want the deeper state-by-state breakdown, our guide to US LLC formation for non-residents walks through what each state asks for at filing.
What does a registered agent do and who can serve?
A registered agent is the person or company that accepts legal papers and official state mail for your LLC at a physical street address in the formation state. Every state requires one. For a non-US founder, it is almost always a paid commercial service, because you do not have a US street address in that state and a P.O. box does not qualify.
The job is narrow. The agent receives service of process (the formal notice that someone is suing your company) and state correspondence, and forwards it to you. The agent must be reachable during normal business hours at that address. That is the whole legal function.
What the agent does not do: run your business, sign contracts, or give you a general business address for all purposes. Some agents bundle mail scanning and a business address into the package. Read what you are buying. A registered agent address is public record, and that is exactly where service of process gets delivered.
Options, honestly ranked for a non-US founder:
- Commercial registered agent service. The normal choice. Recurring provider fee, mail forwarding, compliance reminders. Pick one with a real street address in your formation state and a working scan-and-email process.
- A lawyer in that state. Works, costs more, and ties you to one firm.
- Yourself. Only if you have a genuine physical address in that state and can be there during business hours. From Mumbai, you cannot.
Imagine your LLC is formed in Wyoming with a cheap agent that forwards mail once a month by post. A customer dispute turns into a lawsuit, the notice arrives at the agent, and it sits in a mail bag for three weeks. You find out after the response deadline. Pay for scanning. It is the cheapest insurance in the whole setup.
Heads-up: if your agent resigns or you stop paying, the state can mark your LLC as not in good standing, and some banks freeze activity on entities that are not in good standing. Keep the agent renewal on a calendar.
How should a single-member LLC be taxed?
By default, a single-member LLC is a disregarded entity for US federal tax. The IRS does not treat it as a separate taxpayer: the owner reports the business on their own return [1]. You can change that by filing Form 8832 and electing to be taxed as a corporation [1].
For a non-US owner, the default has consequences that surprise people. Disregarded does not mean invisible. A foreign-owned single-member LLC files Form 5472 with a pro forma Form 1120 every year, and missing that carries a penalty of $25,000 per form. You also need to think about US-source income, effectively connected income, treaty positions, and whether any payments to you face 30% withholding. That is a conversation with a qualified tax professional, not a blog post.
S-Corp election is off the table for most readers. An S-Corp's shareholders must be US citizens or resident individuals, so a nonresident owner does not qualify. Do not let a template service sell you an S-Corp election you cannot legally make.
Corporate election is a real choice, not a default. Elect corporate treatment and you get a separate taxpayer: the company files Form 1120, pays corporate tax on its income, and you pay tax again when profits are distributed. That double taxation is the price of investor-ready structure and stock-based compensation. For a solo consultant, it rarely pays. For a founder planning a priced equity round, it sometimes does.
Suppose you run a one-person SaaS from Pune, all customers pay by card, and you take the money as owner draws. Disregarded status plus the annual Form 5472 and pro forma 1120 is the simplest compliant path. No corporate return, no double tax, one federal filing package.
Suppose instead you are raising from a US fund that wants preferred shares. An LLC cannot issue preferred stock. You would convert to a C-Corp, and doing that later has tax and legal consequences. Decide the end state before you file, not after.
If Form 5472 and the pro forma 1120 sound like a foreign language, our federal tax support for Form 5472 and Form 1120 covers what gets filed and when.
What is the difference between an LLC and a C-Corp for a founder?
An LLC gives you pass-through tax treatment and light formalities. A C-Corp is a separate taxpayer that issues stock, and it is the standard vehicle for startups raising equity. Non-US founders can form either one.
| Factor | LLC | C-Corp |
|---|---|---|
| Taxation | Pass-through by default; corporate election optional | Separate entity; corporate tax, then shareholder tax on dividends |
| Ownership | Membership interests | Shares of stock |
| Investors | Workable for friends and family, awkward for priced rounds | Standard for venture capital |
| Formalities | Minimal: operating agreement, annual report | Bylaws, board, shareholder records, stock ledger |
| Best fit | Solo consultants, agencies, e-commerce, holding assets | Startups planning to raise venture capital or grant options |
Pick the C-Corp if you intend to raise venture money or give employees equity. Pick the LLC if you are selling services or products and keeping ownership simple. Converting an LLC to a C-Corp later is possible, and it is a taxable event with legal work attached. Founders who know they want VC money should start as a Delaware C-Corp and skip the conversion.
What documents does the state require to file?
The core filing is the articles of organization (called a certificate of formation in some states). It is short: LLC name, registered agent name and address, and a signature. Most states also want a registered agent consent and the filing fee.
The name must be distinguishable from existing entities and usually must contain "LLC", "L.L.C." or "Limited Liability Company". Check the state's business entity search before you file. A rejected filing costs you time, not just the fee.
Your principal office address can be foreign. Your registered agent address cannot. That split confuses people: the state accepts your Indian address as the principal office and still requires a Wyoming street address for the agent.
A passport copy or proof of address is usually requested by the registered agent or the bank, not by the state filing itself. Some states ask for a member or manager list. Processing runs from same-day to several weeks depending on the state and whether you pay for expedited handling, which is an optional government fee.
The operating agreement is the internal rulebook for ownership and decisions. Most states do not file it. Banks and payment processors ask for it anyway, so write one even when the state does not demand it.
How do you get an EIN after formation?
The EIN (Employer Identification Number) is the IRS tax ID for your LLC. It is free. Apply on Form SS-4 after the LLC exists, because the application asks for the formation date and state.
Without an SSN or ITIN, the online EIN application will not accept you. Non-US founders file by fax or mail using the IRS international line for businesses with no legal residence in the US. Keep the fax confirmation. It is your proof if the IRS has no record later.
Do not pay a formation provider for an EIN unless you genuinely cannot handle a fax. The form is one page. The waiting is the hard part, not the paperwork.
Say your LLC was approved on a Monday and you want a Mercury account by Friday. You cannot open it with the formation certificate alone. Most banks want the EIN, so the EIN is the real gate. Start the SS-4 the day your articles are approved.
If the fax route feels risky, getting an EIN as a non-US resident is exactly the process we handle.
Which bank account options fit an LLC?
Non-US founders open US business accounts through online banks and fintechs, or through traditional banks if they can show up in person. Requirements differ by provider, and approval is always the provider's decision, never a guarantee.
Expect to hand over: formation documents, EIN confirmation, your passport, proof of address, and a description of the business. Some providers want a US phone number or a US business address. Some want to see a website or contracts.
- Mercury and similar online business banks. Popular with startups. Mercury publishes its own eligibility rules for non-US founders; check them on Mercury's site before you apply, as of 2026.
- Wise Business. Useful for receiving USD and converting to INR, and often easier to open than a full bank account.
- Traditional US banks. Usually need a US address and an in-person visit. Workable if you travel to the US.
Stripe is a payment processor, not a bank, and it has its own requirements for non-US founders. It is not the same decision as your bank account. Our Stripe setup guides for non-US founders cover that separately.
Suppose you are an Indian founder selling to US customers. You form a Wyoming LLC, get the EIN, open Wise Business to receive dollars, and apply to Mercury for a full operating account. If Mercury declines, Wise still works and you have not lost the company. Apply to two providers, not one.
What ongoing filings keep the LLC active?
Every year you owe the state an annual report or franchise tax, and you owe the IRS your federal filings. Miss the state deadline and you get late fees, then administrative dissolution. Miss Form 5472 and the penalty is $25,000.
Your recurring obligations:
- State annual report or franchise tax, due on a fixed date or your anniversary month.
- Registered agent renewal, a provider fee, usually annual.
- Federal Form 5472 with pro forma Form 1120 for a foreign-owned single-member LLC.
- Form 1120 if you elected corporate treatment.
- State tax returns if the state imposes them on your activity.
Keep government fees and provider fees in separate columns when you budget. The state fee goes to the government and is not negotiable. The agent fee goes to a private company and is negotiable by shopping around. Blending them into one "annual cost" number hides which one you can actually reduce.
Common Mistakes
Choosing a state for the filing fee and ignoring the annual cost. A cheap filing fee with an expensive annual franchise tax is a bad deal over five years.
Being your own registered agent without a US street address in that state. The filing gets rejected, or worse, accepted and then flagged when service of process cannot be delivered.
Skipping Form 5472 because the LLC is disregarded. Disregarded is a tax classification, not an exemption from filing. This is the single most expensive mistake on this list.
Electing S-Corp status as a nonresident owner. You do not qualify. Fixing an invalid election costs more than never making it.
Assuming the formation provider's EIN service is mandatory. It is not. The IRS charges nothing for an EIN.
Mixing personal and business money. Run everything through the business account. Commingling is how people lose the liability protection they paid for.
Name mismatch across documents. The name on the articles, the EIN letter, and the bank application must match exactly, including punctuation. A mismatch triggers manual review and delays.
Frequently Asked Questions
Can a non-US resident form a US LLC without visiting the US? Yes. Every state allows it remotely. You need a registered agent in the formation state and can file online or by mail.
Do I need a US address to form an LLC? You need a physical street address in the formation state for the registered agent. A commercial agent's address satisfies that. Your principal office address can be in India.
What is the cheapest state to form an LLC for a nonresident? Compare total annual cost, not the filing fee. Wyoming and Delaware are common choices, and the ongoing state obligation usually matters more than the one-time fee. Check the current official fee for each state.
Can a single-member LLC owned by a nonresident elect S-Corp status? No. S-Corp shareholders must be US citizens or resident individuals, so a nonresident owner is not eligible.
Do I need an EIN to open a bank account for my LLC? Yes. Most banks require the EIN, and you get it free from the IRS by fax or mail if you have no SSN or ITIN.
What happens if I do not file the annual report? The state imposes late fees, then dissolves the LLC administratively. Reinstatement costs more than filing on time.
Where NexFyla fits
NexFyla helps non-US founders form US companies and set up EIN and US business banking support. If you want help with US LLC formation, EIN and business setup, NexFyla can assist. Start by deciding your state and tax classification. Everything else follows from those two choices.
*Last updated: February 2026.*
Related reading
- Form an LLC in the US: The Decisions That Come First
- Forming a US LLC From India: Filing, Tax, and Banking
- Making a US LLC from India: The Filing Walkthrough
Ready to act on this? US company formation takes the filing, registered agent and paperwork off your desk.