Two ways to own it
You can own the LLC as a private person, or your existing company in your own country can own it. For the state both are fine: an LLC can have individuals or companies as members. The difference is in tax, paperwork and what you plan to do with the profit.
Owning it personally
- Simplest set-up: you are the member, you sign everything, and the bank checks only you.
- The LLC's profit is usually taxed in your home country as your personal income, depending on how your country treats a US LLC.
- Good for freelancers and small online businesses where the US company is the business.
Owning it through your company
- The LLC becomes part of your group, like a US branch or subsidiary of your existing business.
- Profit is taxed at your company, often under company tax rules that can be more favourable, and you take it out of your company the way you already do.
- It keeps the US business inside the company that already has the clients, contracts and accounts.
- More paperwork: banks ask for your company's registration extract, its shareholders and its ultimate beneficial owners.
The US filings in each case
A single-member LLC owned by a foreign company is still disregarded for US income tax and still files Form 5472 with a pro forma 1120 every year. If the LLC has US-taxable income, a foreign corporate owner is taxed as a foreign corporation with a US branch, which brings extra rules. The EIN application always names one natural person as responsible party, such as a director of your company.
What your home country thinks
This is where the real decision lies. Some countries treat a US LLC as transparent, others as a foreign company. Many have rules for foreign subsidiaries of resident companies, such as controlled foreign company rules or exemptions for participations. The same LLC can be cheap through one route and expensive through the other, so ask an adviser at home before you form it.
Changing it later
Moving the LLC from yourself to your company, or the other way round, is possible but is a transfer of ownership: the operating agreement changes, the bank must re-check the owners, and in your home country it can be a taxable sale. It is easier to choose well at the start.
Frequently asked
Can my foreign company be the only member of a US LLC?
Yes. Any company can be a member of an LLC, wherever it is registered.
Who signs the EIN application if my company owns the LLC?
A natural person who controls the company, such as a director. The IRS always wants a person as responsible party.
Is one route always cheaper?
No. It depends on your country's rules for foreign companies and on what you do with the profit. Get advice at home before forming.
This guide is general information, not legal or tax advice. Rules and fees change; check your own situation with a professional.