LLC in the USA: What It Is, How It Works, and Why It's Worth It in 2025

An LLC (Limited Liability Company) is a form of business structure that offers owners limited liability protection. By creating an LLC, you establish an independent legal entity in the United States.

Opening an LLC is a simple and accessible process, even for foreigners. Your nationality doesn’t matter! You can complete the entire process remotely, without needing to travel, with just your passport from your country.

This simplified approach allows international entrepreneurs to easily register and manage their LLC in the United States. It’s no longer necessary to face geographical barriers or complex procedures to start your business in the country. Opening an LLC has become much more accessible and convenient for people from around the world.

What Is an LLC Used For?

An LLC (Limited Liability Company) is a good business type option in the United States that protects your personal assets and facilitates business operations. It offers legal separation between your personal finances and those of the company, while also providing access to payment gateways and tax-saving opportunities for foreigners.

Main uses of an LLC:

1. International e-commerce: Sell products or services online to customers in the U.S. and worldwide
2. Professional services: Consulting, design, programming, digital marketing
3. Real estate investments: Buy and manage properties in the U.S.
4. Tech startups: Develop and market software or applications
5. Import/Export: Facilitate international trade operations

Advantages of Creating an LLC

There are several advantages to choosing an LLC as a business structure. Some of the most notable include:

1. Limited Liability Protection

Owners are not personally responsible for the LLC’s debts and obligations. This means your personal assets (home, car, savings) are protected in case of lawsuits or business debts.

2. Management Flexibility

LLCs offer greater flexibility in decision-making and profit distribution compared to other business structures. They don’t require formal boards of directors or complex corporate structures.

3. Tax Benefits

LLCs can enjoy significant tax benefits:

• Avoid double taxation
• Foreigners without physical presence in the U.S. may be exempt from federal taxes
• Flexibility to choose how to be taxed

4. Opening Bank Accounts

LLCs have the ability to open business bank accounts in the U.S., which facilitates:

• Clear separation of business and personal assets
• Access to the U.S. financial system
• Ease of receiving payments from customers

5. Use of Payment Gateways

By having an LLC in the USA, it’s possible to access popular payment gateways such as:

• Stripe
• PayPal Business
• Square
• Authorize.net

This gives the company the ability to accept online payments safely and efficiently.

Differences Between Single-Member and Multi-Member LLCs

Limited Liability Companies (LLCs) in the United States can be classified into two main categories:

Single-Member LLCs

A Single-Member LLC is a company owned by a single individual.

Characteristics:

• Simplicity in management and operation
• Total control over business decisions
• Faster formation process
• Simpler tax filing

Ideal for:

• Individual entrepreneurs
• Freelancers
• Independent consultants
• Small business owners

Multi-Member LLCs

Multi-Member LLCs are those that have multiple owners.

Characteristics:

• Requires detailed operating agreement
• Shared decisions among members
• Greater administrative complexity
• Different taxation options

Ideal for:

• Business partnerships
• Family businesses
• Startups with multiple founders
• Companies with investors

What Is a Disregarded Entity LLC?

A Disregarded Entity LLC is a specific tax term used in the United States to describe a single-member Limited Liability Company (LLC). In this type of structure, the entity (the LLC) is “ignored” or “disregarded” for tax purposes, meaning it’s not considered separate from its owner for tax filing.

Characteristics of a Disregarded Entity LLC:

Tax Transparency

A Disregarded Entity LLC, being treated as an extension of the individual owner for tax purposes, avoids double taxation. This means:

• LLC income is not subject to entity-level taxes
• All income, expenses, gains, and losses are reported on the owner’s personal return
• Maintains complete tax transparency

Administrative Simplification

Classification as a Disregarded Entity eliminates the need to:

• File separate corporate tax returns
• Maintain complex corporate accounting
• Comply with corporate meeting requirements

Advantages and Disadvantages:

Advantages:

• Significant administrative simplification
• Avoids double taxation
• Less paperwork and compliance requirements
• Ideal for individual businesses

Disadvantages:

• Less flexibility in tax structure
• Doesn’t allow multiple owners
• May have limitations for certain types of investments

How to Open an LLC in the United States?

The process to create a company (LLC) involves the following steps:

1. Choose a Name for the LLC

• Verify availability in the corresponding state
• Ensure it includes “LLC” or “Limited Liability Company”
• Avoid prohibited or restricted names

2. Select the State of Formation

Most popular states in 2025:

• Delaware: Best for large companies
• Wyoming: Excellent privacy and protection
• Nevada: Good tax benefits
• Florida: No state income tax
• New Mexico: No annual fees

3. File the Articles of Organization

With the Secretary of State of the chosen state, including:

• LLC name
• Principal address
• Registered agent
• Member information

4. Create an Operating Agreement

Document that establishes:

• Internal rules and regulations
• Rights and responsibilities of members
• Distribution of profits and losses
• Management procedures

5. Obtain an EIN

Federal business identification number from the IRS needed to:

• Open bank accounts
• Hire employees
• File tax returns

How Long Does It Take to Register an LLC?

The process to open an LLC can vary in duration:

Estimated times in 2025:

State formation:

• Standard processing: 5-10 business days
• Expedited processing: 1-3 business days

EIN obtainment:

• With SSN/ITIN: Immediate (online)
• Without SSN (foreigners): 5-7 business days (by fax)

Total estimated time:

• For U.S. residents: 1-2 weeks
• For foreigners: 2-3 weeks

Are There Annual Expenses Associated with Opening an LLC in the USA?

Yes, LLCs typically have annual expenses that vary by state:

Examples of annual costs (2025):

State	Annual Fee	Other Costs
Wyoming	$60	Registered agent
Delaware	$300	Franchise tax
Nevada	$350	Business license
Florida	$138.75	Annual report
New Mexico	$0	Only registered agent

Common additional costs:

• Registered agent: $50-$300/year
• Local business licenses
• Business insurance
• Accounting services

Is It Necessary to File Taxes for an LLC?

Yes, it’s necessary to file tax returns for an LLC, but the specific tax treatment can vary.

For foreign owners:

Without physical presence in the U.S. (No ETBUS):

• May be exempt from federal taxes in the U.S.
• Must file informational forms (5472, 1120)
• Don’t pay taxes if they don’t generate U.S.-source income

With physical presence or ETBUS:

• Subject to federal and state taxes
• Must file complete returns
• Tax rates according to income type

Compliance responsibilities:

1. Federal returns: Even without taxes to pay
2. State reports: According to state of formation
3. Form 5472: For LLCs with foreign owners
4. Penalties for non-compliance: Up to $25,000 for not filing

Conclusion

An LLC in the United States represents an excellent opportunity for international entrepreneurs in 2025. It offers legal protection, access to the U.S. market, tax benefits, and the ability to operate globally with credibility. The formation process is accessible, can be completed entirely online, and the benefits far outweigh the costs involved.

Take the leap toward new global opportunities. At ExpressFormations, we offer expert advice for forming LLCs in the U.S. Contact us now, free of charge, and we’ll provide guidance! Start expanding your business beyond borders.

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This article provides general information and does not constitute legal or tax advice. Regulations may change. Consult with qualified professionals for specific guidance about your situation.