How to renew your Foreign-Owned Single-Member US LLC (Step-by-step guide)
If you’re a digital nomad aiming to set up an efficient tax structure, you may have already established a foreign-owned single-member US LLC to enhance your financial strategy. Keep in mind that to renew your LLC it involves annual responsibilities that are simple to manage once you learned them.
This article provides a brief overview of the benefits of forming a US LLC. For a more in-depth look at how an LLC can optimize your tax situation, refer to our detailed guide on LLC tax advantages. We’ll also outline the key steps you need to take each year to ensure your LLC remains in good standing.
What is a US LLC?
A US LLC is a business structure that combines the benefits of a partnership and a corporation. It provides owners with personal liability protection, flexible tax options, and easy management. LLCs can be formed by individuals or multiple people, who are referred to as members.
Ideally, with a residence in a country with territorial taxation (such as Paraguay), income directly from your US LLC is tax-free as long as there is no permanent establishment or fixed employees in the US. Therefore, if you offer online coaching to US Americans or sell online courses, your income remains tax-free. (Learn more in this article on Flag Theory.)
LLC stands for Limited Liability Company. An LLC is a fully liability-limited legal form that does not exist in this form in Europe, a hybrid of a partnership and a corporation. It can have a single owner (referred to as a member), who can also be the manager. The LLC is not an offshore company, but is used by millions of Americans in the same form.
How to form a foreign owned single member LLC?
Forming a US LLC is relatively easy and straight-forward. Here is the list of steps to take when forming your LLC:
- Choose an agent: A person or company representing your LLC in the formation state. As a non-resident, you must appoint a domestic agent to represent your LLC.
- Choose a name: Select a unique name for your LLC that has not been used by another LLC in your state.
- Register your LLC: Complete the necessary forms and file them with the relevant Secretary of State in your state. Make sure to pay all necessary fees.
- Create an operating agreement: A document describing the internal business operations of your LLC. It is not mandatory but advisable to avoid disputes among members.
- Apply for a tax ID number: A tax ID number (also known as an Employer Identification Number or EIN) is necessary to register your LLC for tax purposes. Once you have your EIN number, you may apply for a US bank account.
- Obtain necessary licenses and permits: Depending on your business and location, you may need certain licenses and permits to operate legally.
For tax benefits of a foreign-owned single-member LLC continue here.
My personal experience with forming / renewing an LLC
I founded my LLC in Florida in 2020. My partner Paul had already been running his since 2013 and had years of experience with the annual documents required. Luckily I learned from him that the work involved in a single-member foreign-owned LLC is easily manageable on your own.
Unsurprisingly, there are many providers who want to take the work off your hands, some in the US and some abroad. However, hiring a US-based firm for the annual filings of a foreign-owned single-member LLC can be risky, as these firms are specialized in serving US citizens.
We‘ve heard from many foreigners who have been filed incorrectly by such companies and lost their tax benefits. Alternatively, there are foreign companies that know better how to file documents for foreigners. If you pay them a fee of $1,000 or more per year, they will do the work for you, but you will not gain any knowledge about opening and managing your LLC yourself. Additionally, you will end up paying more than the amount of $200 that I pay annually (fees may vary depending on the state.)
The work takes only a few minutes if you know which documents to file. Further, you should also get an online fax account (such as HelloFax) since the US IRS does not yet work electronically 😉 If you sign up with this link, you will get free additional pages!
My registered agent is included in the price of 200$ per year. In an office in St. Petersburg, Florida, my mail is scanned and sent to me electronically. Pretty convenient!
How to Renew Your LLC
If you formed your LLC in the state of Florida, you can follow these step-by-step guidelines to renew it. These steps are similar in other states but may vary slightly.
Steps to Renew Your Florida LLC
- File the Annual Report with the State of Florida
- Make sure you filed by the end of April, but it’s best to do it between the end of January and March to avoid last-minute stress.
- The filing fee is approximately $150 for a Florida LLC. (As stated earlier, Florida offers the best value for foreigners forming an LLC in the U.S.)
- Pay the Registered Agent Fee
- The yearly payment to renew it is approximately $50.
- Submit Required IRS Forms by April 15
- Form 5472: File it along with a pro forma Form 1120.
- Be very careful not to blindly follow the same guidelines as stated online for many US residents. It’s important to renew the forms as non-residents (foreign-owned single-member LLC.)
- File the FBAR Report (if applicable)
- This report is only necessary if your LLC holds more than $10,000 in foreign bank accounts at any point during the year.
- Personal accounts do not need to be reported, only LLC accounts outside the U.S.
- BOI Report Filing
- This report only needs to be filed once unless there are changes to your LLC’s information.
- As of early 2025, the BOI report requirement is under legal review and currently on hold.
- Stay updated by checking the official website: https://www.fincen.gov/boi
Concluding thoughts
If you‘re interested in starting or renewing your foreign-owned single-member LLC, schedule a call with Paul. He will tell you exactly how he did it so you can do it yourself for years to come.
His reviews from satisfied clients speak for themselves; he’s an encyclopedia on residencies in South America and LLC matters.
If you want to know more about life as a perpetual traveler, feel free to contact me below!
Legal disclaimer:
This content is for informational purposes only and does not constitute professional, legal, or medical advice. The author is not a legal, financial, or medical professional.
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