Forming a US LLC as a British founder: a complete guide

UK founders form US LLCs for one of two reasons. Either US customers want to pay a US entity (Stripe, App Store, large American clients), or the founder is positioning the business as a US-domiciled software company for product or distribution reasons. Both are valid. Both are easier than the British accountant on your first call probably told you.

Here's the short version. A UK resident can form a US LLC entirely from the UK in about two weeks. No US visa, no US address, no US bank required at the start. The US tax treatment is simpler than most UK founders expect, and the UK-US tax treaty means you almost never get double-taxed on the same income. This guide walks through state selection, EIN, banking, and the HMRC reporting touchpoints you actually need to know.

Why UK founders form US LLCs

Three reasons. First, payment infrastructure. Stripe, Plaid, the App Store, Shopify Payments, and most US-domiciled payment processors prefer a US entity. UK founders can use Stripe Atlas, but a US LLC outside of Atlas gives you more flexibility and lower ongoing costs.

Second, customer contracts. Enterprise US buyers often have procurement policies that only contract with US entities. Selling B2B SaaS into the US Fortune 1000 is much easier with a Delaware or Wyoming LLC on the supplier side.

Third, simpler tax treatment than a UK Ltd holding a US subsidiary. A single-member US LLC owned by a UK individual is treated as a “disregarded entity” by the IRS. The LLC's income flows through to you. You pay UK tax on it (under your personal Self Assessment), with credit for any US tax paid. In most cases the US tax is zero because you have no “US trade or business” in the IRS's sense.

Choosing your state

Three states are worth considering for UK founders. Wyoming, Delaware, and New Mexico.

Wyoming is the default for most UK founders. Annual fees are $60. No state income tax. Filings are fast. Owner privacy is strong. Wyoming has become the de facto choice for international founders who aren't planning to raise US venture capital.

Delaware is the right pick if you're forming a C-Corp instead of an LLC (because you plan to raise from US VCs), or if you specifically need a Delaware-only feature (the Court of Chancery jurisdiction, or a niche partnership structure). For a normal operating LLC, Delaware costs more ($300 annual franchise tax vs Wyoming's $60) and offers nothing meaningful in return.

New Mexico is the budget option. No annual report fee at all. Strong privacy. The trade-off is a slightly less developed ecosystem of business services and occasional name-availability friction. UK founders trying to minimise ongoing costs sometimes pick New Mexico.

If you're still weighing entity types, the comparison at LLC vs C-Corp covers when a C-Corp is worth the extra paperwork.

Getting an EIN without an SSN

The IRS online EIN application requires a US Social Security number or ITIN. As a UK resident you have neither. The workaround is Form SS-4 by fax or mail.

Fill out the SS-4 with your name, your UK address, and the LLC's details. Leave the SSN field blank or write “Foreign”. Fax it to the IRS office that handles international applicants. The IRS faxes the EIN back in about 4 to 6 business days. Mail takes 4 to 6 weeks, so fax if you can.

Three things to know:

1. Save the CP 575 confirmation letter. Banks will ask for it. If you lose it, the replacement (147C) takes weeks.
2. You can only apply for one EIN per day per responsible party. If you're forming two LLCs, do the second application a day later.
3. Some formation services (we do this for UK founders) submit SS-4 as a third-party designee and get faster turnaround. If you're in a hurry, it's worth it.

Our standalone post on what an EIN is goes into more depth on the form itself.

Banking for UK founders

Mercury is the most common pick for UK-owned US LLCs. They support non-US-resident founders, the application is online, and approval usually takes 2 to 7 business days. You'll need your UK passport, formation documents, the EIN letter, an operating agreement, and you'll go through a Persona identity check.

Wise Business is the second account most UK founders open. Not as a replacement for Mercury (Wise is a money-services business, not a bank) but as a way to hold GBP, EUR, and USD in one place and move money to and from your UK account cheaply. Wise pairs nicely with Mercury for cross-border operations.

Backup options if Mercury declines: Relay (similar profile, slightly different underwriting). We cover all the main options at top banking options for new LLCs.

One thing UK founders sometimes miss: Mercury requires meaningful US business activity to keep the account open long-term. A US LLC that does no actual business through the account for a year may get closed. Run revenue through it, even small amounts.

US tax obligations

This is the area UK founders worry about most. The simple version: for a single-member US LLC owned by a UK resident with no US physical presence, the US tax bill is usually zero. The paperwork is real but minimal.

You'll need to file:

• Form 5472 with a pro-forma Form 1120 attached. This is an information return disclosing transactions between the foreign owner and the US LLC. Mandatory even with zero income.
• Form 1042 / 1042-S if the LLC pays US-source income to foreign persons. Unusual for most UK-owned LLCs in year one.
• State filings. Wyoming requires an annual report. Delaware charges the $300 franchise tax. New Mexico requires nothing.

Crucially, if the LLC has no “US trade or business” (no US office, no US employees, no US-based service delivery, just a website and a payment processor), there's no US federal income tax. All the LLC's income is taxed in the UK under your Self Assessment instead.

The risk to watch: if you have a co-founder in the US, if you hire a US contractor for ongoing work, or if you store inventory in a US warehouse (Amazon FBA), you may trigger US trade or business and need to file a real tax return. Most UK SaaS founders never hit this.

HMRC reporting and UK tax

On the UK side, the LLC's profits are taxable to you as an individual. The way HMRC treats a US LLC depends on whether it's “transparent” or “opaque” under UK tax rules, which is sometimes ambiguous and worth a conversation with a UK accountant.

Most UK accountants will treat a single-member US LLC as transparent (like the IRS does), meaning the profits are taxed in your hands as foreign trading income, with credit for any US tax paid (usually zero). You report it on Self Assessment via the Foreign pages.

Two specific items:

• Foreign tax credit. If you do end up paying any US tax (rare for the simple disregarded-entity case), claim the credit on your UK return to avoid double taxation. The UK-US treaty makes this clean.
• VAT considerations. Selling digital services into the UK as a UK person via a US LLC doesn't make the US LLC magically outside the UK VAT regime. If you would have had VAT obligations as a UK sole trader, you usually still do.

The W-8BEN you'll be asked for

Once the LLC is set up, US payers (Stripe, App Store, customers) will ask for a W-8BEN. It's a one-page form that tells the payer you're a foreign individual and lets you claim the treaty rate. The UK-US treaty reduces several withholding rates to 0% (including most royalties and many service payments), so filing the W-8BEN correctly is worth the ten minutes.

Full breakdown at what is a W-8BEN.

Common mistakes UK founders make

Things we see go wrong:

• Forming in Delaware because it's the famous name, then paying franchise tax for no actual benefit. Wyoming is usually the better default.
• Missing the Form 5472 filing. The default penalty is $25,000 and the IRS does enforce it. Calendar it.
• Not maintaining a US registered agent properly. The agent is the entity's legal contact in the formation state and the LLC can be administratively dissolved without one.
• Assuming a US LLC makes the UK side disappear. Your UK tax obligations on the income are unaffected.
• Using a UK address for the registered agent slot. The agent has to be in the formation state. Buy the service (often included in formation packages) and use it.

Frequently asked questions

Do I need a US visa? No. UK founders can own and operate a US LLC from the UK with no US immigration status. If you want to work in the US for the LLC, that's a separate immigration question (E-2 treaty investor, O-1, L-1, etc.).

Will the IRS tax all my income? No. The IRS only taxes income that's “effectively connected with a US trade or business”. A UK-resident founder with no US office, no US employees, and no US warehouse usually has none.

What if I have a US co-founder? The LLC becomes multi-member, the disregarded-entity treatment goes away, and the LLC files Form 1065 as a partnership. The US co-founder is taxed on their share, you're taxed on yours, and the tax math gets more involved. Worth a conversation with an accountant.

Should I form a US Ltd subsidiary of my UK Ltd instead? Sometimes, especially if your UK Ltd is the entity raising capital or holding IP. For most UK founders just starting out, a direct US LLC is simpler.

How long does the whole process take? 2 to 4 weeks end-to-end. State approval in 1 to 7 days (Wyoming is fastest), EIN by fax in 4 to 6 business days, Mercury account opening in 3 to 7 business days.

Ready to start? If you have a passport and a basic business plan, you're a step away. Form your US LLC with EntityEngine. We handle the state filing, the SS-4 submission, and the EIN. The application takes about 15 minutes from the UK.