Why digital nomads choose US LLCs (and when you shouldn’t)

The digital nomad lifestyle has grown substantially over the last few years. With reliable internet, cloud-based tools, and a global marketplace, it’s now entirely possible to run a serious business from Bali, Berlin, or Buenos Aires. But as income scales and business complexity increases, many nomads face questions like: Where should I register my business? How can I get paid easily? How do I stay legally compliant across borders?

Enter the US LLC, a legal structure that’s increasingly popular among global entrepreneurs for its simplicity, flexibility, and credibility.

In this guide, we’ll explore why so many nomads are choosing a US LLC for their businesses, what the formation process looks like, and when other structures (like a C Corporation) might be a better fit.

What is a US LLC and why does it work for digital nomads?

A US LLC (Limited Liability Company) is a legal entity that separates your personal assets from your business activities. So if anyone sues your business, your personal assets are safe.

Unlike corporations, LLCs offer more flexibility in taxation and governance.

Why a US LLC is great for non-US-residents:

• You don’t need to be a US citizen or resident to form one.
• You can own the LLC 100% as a foreign individual.
• There are no requirements for a US-based manager or staff.

A US LLC is especially attractive for nomadic entrepreneurs because of its pass-through taxation (unless elected otherwise) and its compatibility with global payment systems like Stripe, PayPal, Mercury, and Wise. Your business can bank in the United States, no matter where you live or travel.

Top benefits of using a US LLC as a non-US digital nomad

1. Access to global-friendly tools: Platforms like Stripe, PayPal, and Deel are optimized for US-registered entities. A US LLC unlocks full access.
2. Easy USD invoicing: Many nomads serve US clients. Invoicing in USD without conversion losses builds trust and stability.
3. Professional branding: A US business address and EIN make your operation look more legitimate to clients, platforms, and banks.
4. Simplicity & speed: You can form an LLC in just a few days. Ongoing compliance is minimal compared to corporations.
5. Asset protection: Personal liability is limited, which adds a layer of legal protection.
6. Potential tax efficiency: Depending on your situation, income earned outside the US may not be taxed there (though tax laws in your country still apply).
   

Note: If you’re shipping products to US customers, other structures like a C Corp might be more tax-efficient. We’ll explore this below.

Who should consider a US LLC?

A US LLC isn’t for everyone, but it works great for foreigners who are:

• Freelancers: Writers, designers, developers, marketers billing international clients
• Remote consultants/coaches: Running a global client base through Zoom
• Online service providers: Selling retainers, design packages, audits, etc.
• Influencers/creators: Monetizing content in the US via platforms that require US accounts

Not always ideal for:

• Startups seeking venture capital — C Corps (Delaware) are often preferred.
• E-commerce brands selling physical goods to US customers — this can trigger “US trade or business” status and tax implications, where a C Corp might be more tax-efficient.

Case study: Marina, a Brazilian UX designer currently living in Spain, uses a Wyoming LLC to invoice her US-based clients, collect payments via Stripe, and manage all operations from her laptop.

The setup process: How foreign DNs can register a US LLC

Setting up a US LLC is straightforward. Here’s the general flow:

1. Choose a State: Wyoming and Delaware are popular for privacy and cost-effectiveness.
2. Appoint a Registered Agent: You need a US-based address for legal notices.
3. File Articles of Organization: This forms your LLC.
4. Create an Operating Agreement (recommended): Outlines ownership and roles.
5. Get an EIN (Employer Identification Number): Required for banking and tax filing.
6. Open a US Business Bank Account: Relay and Mercury are nomad-friendly with remote account opening.

Our firm handles all of this in one simple package for non-residents.

Or, if you need more information before jumping in:

Book a 1:1 LLC Formation Session to get expert guidance.

Tax considerations: What digital nomads need to know

Taxes are often what scare international DNs away from US structures. But with the right knowledge, they can be manageable and even beneficial.

• Disregarded Entity: A single-member LLC owned by a non-resident is considered a “disregarded entity” for US tax purposes. This means the LLC itself doesn’t pay taxes in the US but the owner may have to. If the LLC generates income that is effectively connected to a US trade or business (ETOB), then the owner must report this income by filing a personal US tax return. The owner may also have to report any income in their home country. Check out our detailed guide to US taxation of foreign-owned LLCs.
• Form 5472: Required annually for foreign-owned single-member LLCs to report certain types of transactions, even if no income is earned.
• State vs. federal tax: If income isn’t sourced from the US, LLCs won’t owe US federal tax. State tax depends on the state of formation.
• Your local tax residency: You may still owe taxes in your country of residence. Consult with your local tax advisor.

Important note: Tax considerations and obligations for US citizens and green card holders are different! If you are a US American, an LLC can still be a great option. In many cases, an S Corp (not available to non-US people) can also be beneficial. Talk to our tax advisors to get tailored advice.

Quick FAQs

Do I pay US taxes as a non-American digital nomad with a US LLC?

Generally no, if income is foreign-sourced. But you must file Form 5472.

Do I need to file US tax returns?

Yes, you must file certain forms even if no tax is due.

Can I open a US business bank account remotely?

You can’t open a business bank account remotely in the big brick and mortar banks. However, virtual banks are a reliable alternative. Most nomads use Relay, Mercury, or Wise. There are restrictions on citizens and residents of certain countries, though.

Compliance: Staying legit while you travel

• Annual Reports: Required in most states. Fees vary by state.
• Registered Agent Renewal: Must be renewed annually.
• Form 5472: File yearly to stay compliant.
• Separate Finances: Always keep business and personal expenses apart.

Our firm offers ongoing compliance support so you can focus on business building, not paperwork.

Potential downsides or alternatives

• Not optimal for scaling SaaS or VC-backed startups
• Not ideal for US-heavy e-commerce businesses

Alternative: Forming a C Corp if you’re scaling in the US, looking for funding, or for certain ecommerce businesses. Learn more in our comparison of LLC vs C Corp for International entrepreneurs.

A US LLC for digital nomads

A US LLC isn’t a tax loophole. It’s a legitimate, flexible, and powerful tool to run your remote business smoothly, access global banking, and build credibility with clients. For digital nomads focused on services, consulting, or remote work, it’s often the most efficient structure to use.