Starting a US Company as a Non-US Resident (2): Forming the Company, Choosing a State and Registered Agent

This is part 2 of the series "Starting a US Company as a Non-US Resident": actually registering the company. This step is the easiest. My company was formed the day after I placed the order. The two things worth thinking through are which state to choose and who to use as your registered agent.

Choosing a state: it doesn't have to be where you operate

You can form an LLC in any state. You don't need to operate there. Common choices for foreigners are Wyoming, Delaware and New Mexico.

I chose Wyoming because:

• Low cost: The annual report is at least $60 a year. A Delaware LLC pays a $300 annual tax
• No state income tax
• Better privacy: The state's public records don't list the members (owners)
• Simple rules: For a small, single-member company with no employees, Wyoming is more than enough

Delaware is better for companies that will raise venture capital and issue shares. Those usually form a C Corp, not an LLC. I just need to publish apps and get paid, so I don't need it.

The cost of "no member names"

The other side of good privacy is that nobody can tell from the official documents that the company is yours.

I hit this problem when I applied for an Apple Developer account. Apple looked at the state formation documents and couldn't see my connection to the company. They asked me for more documents to prove it. In the end, the operating agreement (more on it below) and an employment verification letter solved it.

So if you choose Wyoming, make sure you sign an operating agreement.

Finding a Registered Agent

Every LLC needs a registered agent in the state where it is formed. The agent receives official documents from the government and the courts. Foreigners don't have a local address, so you must use an agent.

I use Northwest Registered Agent. Why I chose it:

• They can file the formation for you, so you don't have to deal with the state website yourself
• You can use the agent's address as the company's registered address and mailing address. Mail is scanned and uploaded, so you can see it in your dashboard. Official IRS letters also arrive here later
• Agent service is free for the first year, then $125 a year

Don't forget the free phone number and domain

When you form a company with Northwest, you also get a few free things. Many people don't notice them:

• A US phone number: Install their app "Corporate Phone" and you can make and take calls and receive texts with this number. Very useful when a service or form needs a US phone number
• A domain: You can pick one from .com, .info or .group. Remember to claim it in the dashboard, or it goes to waste
• An email inbox: Set up email on the domain you claimed

I only claimed the domain. I didn't use their email. Instead I connected the domain to Cloudflare's email service. If you have no other preference, Northwest's email is fine too.

The address trap

You can use the agent's address as your registered address and mailing address, but not as the company's "physical operating address". When you open a bank account, the bank will ask for your physical operating address. Put your own home address there, and you may need to attach proof of address. I cover this again in part 4.

What you fill in when ordering

When you order from Northwest, they will roughly ask for:

• Company name: It must end with "LLC" and can't match an existing company in the state. You can search the state website first to check whether the name is taken
• Management: For a single member, choose "Member-managed"
• Member details: Your name and contact info
• Payment: State fee $103 + service fee $39

A small side note: my company name is lowercase, "all right LLC", and the state certificate registered it in lowercase. Later, the IRS system put everything in uppercase: "ALL RIGHT LLC". It's the same company. When you fill in forms, just follow how the other side's system writes it. Don't worry about it.

What you get after formation

After the state approves it, Northwest puts these documents in your dashboard:

• Articles of Organization: The official formation document stamped by the state
• Certificate of Organization: Proof that the company has been formed
• Initial Resolutions: Because Northwest filed for you, they are the Organizer. This document hands control of the company over to you

Keep these safe. You'll need them to open a bank account, apply for a D-U-N-S number, and apply for an Apple Developer account.

Sign an Operating Agreement

Wyoming doesn't require you to file an operating agreement, so many people skip it. I still recommend signing one. It states:

• Who owns the company: a single member, owning 100%
• How much the member contributed: I listed the formation fees and domain fees I paid for the company as contributions
• How the company is managed and how the fiscal year works

You don't submit this document to the state. Just sign it and keep it on file. Northwest provides a template.

It turned out more useful than I expected. Apple used it to confirm that I am the company's only member. Banks and accountants may also ask for it. It's also the most basic proof that the company and you are separate.

Next step

After the company is formed, the next thing is the EIN, the company's tax ID. Foreigners don't have an SSN and can't apply online. In the next post, I explain how I got it done by fax.

This series

1. Overview: why, how long, and how much
2. Forming the company: state, registered agent, operating agreement (this post)
3. Getting an EIN: how foreigners fill in Form SS-4
4. Opening a bank account: Mercury, fully online
5. Annual filings: the easiest to miss, the heaviest penalties