Set up a US LLC company in the USA for a tax-free life!

Anonymity with a US LLC?

Yes, you are completely anonymous with the US LLC in New Mexico and Wyoming! But the anonymity refers more to the public register entry of US sites that list your company. On the one hand, you cannot view these register pages without a VPN (New Mexico), i.e. you first have to dial in to a US server via VPN before you can view the public register pages of the states.

And secondly, on the public register pages of the federal states you will only find the name, the register number and other data of your company. Your real name and all personal names of the members cannot be found there! This makes it ideal should authorities in your home country make inquiries about your company in connection with your name.

Note: Public anonymity does not mean that the US government does not know who the member of the LLC is! Of course, your name is on the non-public register of the IRS, which is logical considering that the IRS assigns your company an EIN (tax identification number). The names of the members are also listed in the operation agreement, which is also good for proving to authorities or banks, for example, that the company belongs to you.

Furthermore, anonymity does not count for the state of Florida! Here you will be mentioned in the public register with your name and address, which is an advantage if you have to credibly prove the authenticity of your own LLC to your clients.

At the latest, however, the CP575 letter from the IRS, with which your LLC’s EIN tax number is issued, lists all company data as well as your first and last name. You can also use this letter to prove the authenticity of your LLC to authorities and institutions.

Beware of online offers that promise to get your EIN number in 1-2 days! Most of the time, these “agencies” use their own SSN or ITIN to register the EIN. The result is that the EIN is not in your name, but in the name of your LLC, but in the first and last name of the person who applied for the EIN! Furthermore, this procedure is against the IRS rules.

Writing invoices in the name of the LLC

This is relatively simple. As with Canada LLP, you write your invoice in English or German (depending on the customer). You simply adapt the currency to your customer’s country or you invoice exclusively in EUR or USD.

If you have B2B customers within the EU, you can invoice using the reverse charge procedure. Simply use the following text in the invoice text:

“Reverse charge procedure! Reference is made to the tax liability of the recipient of the service in accordance with § 13b UStG. The tax rate is 19 %.”

This text is not a MUST, but it will save you any queries from your client’s accounting department.

Part 1: How do you form a US LLC in Wyoming, New Mexico or Florida?

Let’s start with the fact that a “registered agent” must always be appointed to set up a company in the USA, especially so that no permanent establishment is created. The Registered Agent registers the company under its own company address in the USA in the preferred state, receives all company documents and takes care of sending all documents by email. Of course, this is always a question of price.

In principle, mail can be received and scanned at the agent’s registered address. Physical dispatch by post should only be used in the rarest of cases, e.g. when bank cards are involved. Once you have found such an agent, you can start the company registration process.

But special care is required! Not every agent does everything that is important and necessary for the proper establishment and maintenance of the company.

The business bank account of the LLC must not be missing: Here comes the EIN number!

A company bank account is important in order to be able to carry out all transactions properly. All expenses and income should be processed through this bank account. Compared to the Canada LLP we have a decisive advantage here for those who have and want to use a “real” bank account as a company account. Regardless of this, fintech banks work like Wise and Payoneer with the US LLC, as with the Canada LLP, excellent!

To open a real business account for a US LLC, an EIN is required. This is the “Employer Identification Number” which is a substitute for the SSN (Social Security Number) of the individual. However, since most people are probably not American citizens, there will be no SSN, no matter how hard you try.

This is precisely why it is important that the EIN is included in the application for your new LLC. This is the only way to open a separate business account for the company in the name of the company! Many LLC low-cost providers / agents open the company for you but do not apply for an EIN. This number is crucial for real banking transactions in the USA! The EIN number is the tax number of your LLC and helps you to open bank accounts, as well as to register with your LLC on various platforms such as Digistore24, EloPage or Stripe!

Is the EIN required for a single-member LLC?

No, it will not! Because a single-member LLC (e.g. an LLC with only you as a member!) always has the option of choosing how it wants to be treated or viewed by the IRS. If the company has 2 or more members, you can choose whether you want to be treated as a partnership or a corporation for tax purposes. Multiple members in an LLC make the LLC a partnership for tax purposes, which is also a partnership.

With a single-member LLC, you can choose whether you want to be seen and treated as a corporation or as a “disregarded entity”. As a Disregarded Entity, you are treated as a sole proprietorship by the IRS. This in turn means that you only need the EIN if you have employees or need to file excise tax returns.

From this perspective, you could do without the EIN. However, you should consider the possibility of a real business account at a US bank, which is why we will always recommend applying for an EIN. Furthermore, more and more platforms require you to provide an EIN number, as this also functions as a tax number!

Watch out! FATCA and FBAR law of your foreign LLC bank accounts!

We also need to briefly mention FATCA. This “law” is called the “Foreign Account Tax Compliance Act” (FATCA) and was introduced by the US Congress in 2010. The aim of FATCA is to ensure compliance with the tax obligations of US persons with accounts abroad. Information on bank accounts, investment accounts and other financial accounts is exchanged with the USA.

This means that there is an exchange, for example, between banks worldwide and the IRS in the USA. It should be noted that it is still possible to maintain a foreign business account, e.g. a Belgian IBAN account in euro currency with Wise. However, data about this account may be sent to the US tax authorities!

And this is where FBAR, the “Foreign Bank Account Report”, comes into play. As soon as you have more than USD 10,000 in all your foreign bank accounts (i.e. not within the USA) with all your income, even if only briefly, you have to fill out an FBAR and send it to the Financial Crimes and Enforcement Network of the US Treasury Department.

That’s all it is! Nevertheless, we advise you to keep a close eye on the turnover or account balances in foreign accounts and to transfer funds to your own private account outside the USA as quickly as possible so that no FBAR is necessary. Of course, you can also transfer money from your foreign business account to your domestic business account in the USA.

Note: The FBAR deadline is the same as the tax return deadline. It is just an informational document on which no additional tax is added. If you do not submit the FBAR on time and exceed the USD 10,000 limit, you may be subject to high penalties of USD 10,000. In the case of proven intent, even $100,000 or 50% of the account balance, whichever is higher.

Part 2: Your US LLC is registered!

Your Single-Member LLC is now open. But what happens next? You have already received the “Certificate of Organization” and have been notified of the “Registry Number” of your LLC in Wyoming, New Mexico or Florida.