A quick and honest disclosure before we start. StartGlobal, the company I run, helps founders set up businesses in the US. So I have a clear bias here. I am going to do my best to give you the straight, educational version anyway, including the parts that argue against doing this at all, because a chapter that is just an ad for my own company is worthless to you. Read this to understand the landscape. Then verify anything that touches tax or compliance with a real professional, because those rules move fast and they are the parts that bite.
Why incorporate in the US at all
If you live outside the United States, the single most common reason to form a US company is payments. Stripe and PayPal are far easier to get, and far less likely to suddenly freeze on you, when you have a US entity, a US tax ID, and a US bank account. Many founders simply cannot get a usable Stripe account through their home country, or they get one on worse terms. A US setup fixes that, and for a lot of internet businesses that is the whole reason.
The other reasons are real but secondary. USD banking through modern fintechs without flying anywhere. Credibility with US and global customers, who trust a US company more than they will admit. Investor readiness, because US angels and venture funds expect to fund US companies. And a clean separation between your personal assets and the business.
Now the honest other side. A US company is recurring work and recurring cost. There are annual filings, and as you will see, missing one of them carries a punishing penalty even when you owe no tax at all. Banking has gotten harder, not easier. And forming in the US does not make you tax-free, you still owe tax in your home country on your profits. If you only sell locally, have no global customers who need Stripe, and are not raising US money, a US entity is mostly paperwork with little upside. Do not do it because it sounds impressive. Do it because you need the payments, the banking, or the investors.
LLC or C-Corp
This is the first real decision, and it is simpler than people make it.
An LLC is flexible and simple. By default it is a pass-through, meaning the company itself does not pay income tax, the profit just flows to the owner. For a bootstrapped solo founder, an agency, or a SaaS you are not raising venture money for, an LLC is usually the right answer.
A C-Corp is a separate taxpayer that pays its own corporate tax, and it is the standard structure for raising money. It issues stock, which is what lets you give out option grants, sign SAFEs, and run a priced funding round.
Why do venture investors insist on a Delaware C-Corp specifically? Because their own fund structures generally cannot invest cleanly in a pass-through LLC, it creates a tax mess for the people who invested in the fund. They need stock, a clean cap table, an option pool, and the predictability of Delaware corporate law, which has a specialized business court and a century of settled precedent. SAFEs, priced rounds, and the startup tax benefits all assume a C-Corp. You can convert an LLC into a C-Corp later, but it costs legal fees and time, so if you already know you are going to raise US venture money, just start as a Delaware C-Corp.
The short version. Bootstrapping, freelancing, or running a small SaaS: LLC. Planning to raise from US investors: Delaware C-Corp.
Where to register
For an LLC, the two states worth considering are Delaware and Wyoming.
Wyoming is cheap and private. The minimum annual fee is around sixty dollars, members are not publicly disclosed, and a registered agent runs maybe fifty to a hundred and twenty five dollars a year. All in, you can maintain a Wyoming LLC for roughly a hundred and sixty dollars a year. For a bootstrapped founder who wants low cost and privacy, it is hard to beat.
Delaware costs more. The LLC franchise tax is a flat three hundred dollars a year, and with an agent you are looking at roughly four hundred and fifty dollars a year. You pay for the brand and the legal familiarity. If you are forming a C-Corp to raise money, Delaware is not really optional, it is what investors expect.
The rule of thumb. Bootstrapped LLC, lean toward Wyoming for the cost and privacy, or Delaware if you want the more recognized name. Raising venture money, Delaware C-Corp, full stop.
The actual steps
Once you have picked your state and structure, the path is mechanical.
First, a registered agent. Every state requires one. They are the official address that receives legal and state mail on your behalf, and they cost around fifty to two hundred dollars a year.
Second, file the formation document with the Secretary of State. It is a Certificate of Formation for an LLC, or a Certificate of Incorporation for a corporation. This is often done in a day or a few days.
Third, get an EIN, the company’s tax ID, and this is the step non-residents worry about most. You do not need a Social Security Number or an ITIN to get one. You file IRS Form SS-4, and on line 7b, where it asks for the responsible party’s SSN or ITIN, you simply write “Foreign.” Because you do not have an SSN, you cannot use the online tool, so you fax or mail the form, or you call the IRS international EIN line at +1 267 941 1099. Fax usually comes back in roughly one to two weeks, mail takes longer, and IRS processing times genuinely fluctuate, so do not promise yourself a date.
Fourth, your internal documents. An operating agreement for an LLC, or bylaws plus stock issuance and the 83(b) election for a corporation. These are not always filed with the state, but you need them for banking and for a clean record of who owns what.
Banking and payments
Here is where reality has shifted, so pay attention. The fintechs that made non-resident banking easy have tightened up.
Mercury is still the default US business account for foreign founders and you can open it remotely. But in 2025 it tightened its reviews, started rejecting addresses that are just a registered agent with no real operating presence, and often turns away brand-new entities with no revenue. Relay is similar and has also gotten stricter. Brex is built for venture-funded startups, not bootstrapped solo founders, and its underwriting effectively wants real funding or significant cash behind you, so most early cross-border founders will not qualify. Wise Business works for many non-residents as a multi-currency account to receive and hold money, but understand that it is not a bank and not FDIC insured, so it does not fully replace a US bank account.
The practical takeaway. These are onboarding policies that change quarter to quarter. Do not assume any single one will accept you, and do not be surprised if you get asked for more documents than you expected.
On payments, Stripe Atlas deserves a mention because it bundles a lot of this together. For a flat five hundred dollars it forms a Delaware C-Corp or LLC, gets your EIN including handling the non-resident process, issues founder stock, files your 83(b), includes the first year of registered agent, and throws in thousands of dollars of Stripe credits and partner discounts. It is formation plus Stripe onboarding in one box, though it is not a bank. Once you have the entity, EIN, and US bank account, getting Stripe and PayPal themselves becomes straightforward in a way it usually is not from many home countries.
The taxes nobody warns you about
This is the part founders skip and then regret, so slow down here. None of what follows is tax advice, it is a map of what to ask a professional about.
On federal income tax, a foreign-owned US LLC owner is generally not subject to US federal income tax if the business is not engaged in a trade or business inside the US and has no effectively connected income. In plain terms, a digital or SaaS business with no US office, no US employees, and all the work done abroad is often not federally taxed on that income. But this is genuinely fact-specific, and the determination is exactly the kind of thing you pay a US CPA to confirm rather than guessing.
On state tax, you generally owe none if you do not operate in the state, though you still pay the franchise or annual fees mentioned earlier.
Now the one that gets people. Even with zero tax due, a foreign-owned single-member LLC must file Form 5472 along with a pro forma Form 1120 every single year. The penalty for missing it is twenty five thousand dollars. Twenty five thousand, for a form, on a company that might owe no tax. It cannot be e-filed, it goes to the IRS by mail or fax, and it is due in April. This is the single most important sentence in this chapter. If you form a US company, put this filing on a calendar and do not miss it.
There is also sales tax, which is separate from income tax. After a Supreme Court case called Wayfair, states can require you to collect sales tax once you cross an economic threshold in that state, commonly around a hundred thousand dollars of sales or two hundred transactions, though it varies. If you sell taxable goods or certain digital products to US customers, this can eventually apply to you.
And one piece of recent, moving news. There is a federal beneficial ownership reporting requirement, called BOI, run by FinCEN. As of this writing in 2026, an interim rule from March 2025 removed that reporting requirement for US-formed companies and US persons, so a typical US LLC or C-Corp owned by a non-resident does not currently file a BOI report. I am flagging this loudly because it reversed the original rule, it has been politically and legally contested, and it could change again. Check fincen.gov directly before you rely on it. The same caution applies to every number in this chapter. Verify it when you read it, because the rules and the prices both drift.
The landscape of services
You can do all of this yourself, or you can pay someone to handle the paperwork. Here is the honest comparison, including my own company.
Stripe Atlas, around five hundred dollars, is the cleanest option if you want Stripe and a standard startup setup with good perks. Clerky, around eight hundred dollars, produces lawyer-grade documents and is favored by founders on the US venture track. Firstbase, around four hundred dollars, and Doola, around three hundred dollars, both do formation plus EIN and offer compliance and bookkeeping add-ons aimed at non-residents. Inc Authority has a free formation tier where you only pay state fees, with heavy upsells on top. And StartGlobal, my company, forms LLCs in any US state for non-residents, gets your EIN, helps with banking, and handles compliance, with the registered agent around ninety nine dollars a year.
Treat every one of those prices as a starting point, because review sites are usually out of date and none of them include state fees and annual renewals. Pick based on what you actually need. If you want Stripe and a quick standard setup, Atlas is excellent. If you are non-resident and want someone to walk the whole path with you including the banking and the annual filings, that is the gap companies like mine exist to fill.
Setting up in the US is not hard. It is a sequence of mechanical steps and a couple of forms you must not forget. What matters is doing it for the right reason, picking the structure that matches your actual plan, and respecting the annual filings so a piece of paperwork never costs you twenty five thousand dollars. Get those right and you have a clean US company that lets you sell to the entire world.