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Is a US LLC Worth It for Freelancers Outside the US?

· 3 min read

Plenty of freelancers, consultants and agencies outside the US form a US LLC. Plenty do it without needing to. Whether it is worth it depends on who your clients are, how you get paid and what the yearly cost and paperwork will be. This is a straight look at both sides, so you can decide before you spend anything.

Reasons people form one

  • US clients and platforms expect it. Some marketplaces and payment tools work more smoothly with a US company and a US tax number.
  • A US bank account and payment processing. An LLC can open US-dollar accounts and apply for processors such as Stripe or PayPal, subject to their approval. See Stripe for a non-resident US LLC.
  • Liability protection. The LLC separates the business from your personal assets, if you keep the money separate.
  • A professional image. A US business name and address can help when you sell to larger companies.

Reasons to wait

  • Yearly cost. The registered agent, the state's annual report or tax and the IRS filing repeat every year. See LLC filing fees by state.
  • Paperwork you cannot skip. A single-owner LLC outside the US files Form 5472 with a pro forma Form 1120 every year, even with no income, or risks a $25,000 penalty. Read the guide.
  • Your home country's rules. A foreign company can change how your income is taxed and reported at home.
  • You may not need it. If one client pays you by bank transfer or a global payment service, an LLC may add cost without adding value.

A simple way to decide

  1. Do you need to accept US card payments or open a US bank account? If yes, an LLC helps.
  2. Will you have US customers who ask for a US company? If yes, an LLC helps.
  3. Can you comfortably cover the yearly costs and the yearly filing? If no, wait.
  4. Have you checked how your home country taxes a foreign company? If no, do that first.

If you plan to raise investor money rather than freelance, read LLC vs C-Corp first.

If you go ahead

The steps are in our guide to registering an LLC in the USA online. Plan for a few weeks end to end; see how long it takes. We have country guides too: open a US LLC from any country.

Ready? See LLC formation or compare Jupiter Filing with Doola, Firstbase, Stripe Atlas and Bizee. This is general information, not tax or legal advice.

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