In this article, you will discover how to open an LLC in the USA from Spain, including the requirements, benefits, step-by-step process, and answers to frequently asked questions about taxes, prices, and more.
Let’s get started.
Requirements to Open an LLC in the USA from Spain
The only requirement you need is to be over 18 years old and have a valid passport from your country.
People often think there are more requirements for this, but that’s not the case. That’s why we’ll show you this list of requirements that are not necessary, but many think they are:
- You do not need to live in the USA to open your LLC.
- You do not need to travel to the USA.
- You do not need a US address.
- You do not need a US phone number.
- You do not need any US tax identification like SSN or ITIN.
- You won’t be asked for a Visa or a passport.
- You can open your LLC as the sole member.
Which State Is Best to Create Your Company?
It’s hard to give you a single answer considering the number of states that exist.
But when it comes to non-resident entrepreneurs, there are 5 more states considered for opening an LLC.
In this case, we will analyze the characteristics of each state in the following table, and it’s up to you to decide which one best suits your needs:
|Processing Time||1-3 business days||4-5 business days||5-6 business days||1-3 business days||5-6 business days|
|Can it be anonymous?||Yes||Yes||No||Yes||No|
|Personal Income Tax||Rate ranges from 0% to 5.9%.||None for non-residents||None||None||None|
|Annual Report Fee||$0||From $300||Between $138.75 and $150||From $62||$0. Annual Public Information and Non-Tax Reports must also be filed.|
|Cost to Open an LLC with Rex Legal||$395||$650||$385||$395||$585|
Steps to Open an LLC in the United States from Spain
1. Choose the State
If you took the time to analyze the table above, you can decide on one of those 5 states. However, you could also create an LLC in any other state in the USA.
Consider your needs, financial capacity, and the different benefits of each state when making your decision.
2. Choose a Name
There are some legal requirements when creating your name:
- It must include the phrase “Limited Liability Company” in its full or abbreviated form: LLC, L.L.C, Ltd, Limited, Company, Co).
- It cannot include restricted or limited words like: University/Universidad, Bank/Banco, or Attorney/Licenciado.
- It cannot include words that might confuse your company with federal or government agencies like: FBI, State Department/Departamento de Estado, Treasury/Tesorería.
- Finally, it must be distinct from the names of any other companies in the state where you register it.
If you meet these requirements, your name will be valid.
3. Define Who Will Be the Members
It’s important to determine who will be the owners of the LLC.
Whether you are the sole owner or have multiple partners, you need to provide the details of each member, including:
- Country of residence
- Date of birth
If you are the sole member, you still need to provide this information.
4. Create Your Operating Agreement
The Operating Agreement is a document that defines the internal rules of the company.
It must be signed by each member, and although it is not mandatory to have one, we strongly recommend it.
The reason is that this document provides many benefits to the operation of the company, and more than just creating an LLC, we want it to function well, right?
An Operating Agreement prevents misunderstandings, establishes rules and procedures to optimize the operation of the company.
That’s why it’s so important to have one, even if you are the sole member.
Benefits of Creating an LLC in the USA from Spain
Whether you are a freelancer, an entrepreneur selling digital products or services, or the owner of a large digital business, an LLC is your best option due to the following benefits:
1. Limited Liability
An LLC protects your personal assets from your business. So, if your company faces legal issues such as a lawsuit, it will only affect your company and not your personal assets, such as homes, vehicles, or valuable items.
2. Flexible Structure and Low Taxes
LLC structures have always been attractive due to their flexibility. For example:
Customizable Management Structure: If you’re going solo, you can be the sole member of your LLC and manage it on your own. However, if you wish, you can include one or more partners, decide each one’s role, as well as their percentage of ownership and benefits.
To define all of this, you need an Operating Agreement.
No Double Taxation: Limited Liability Companies do not have to pay corporate taxes. Profits are distributed among the members of the company, and each of them must pay their personal taxes as individuals, not as a business. The best part is that if you live in Spain, being outside the country might even exempt you from personal taxes.
If your company sells only digital products or services, it might be exempt from taxes. However, if you ship products from Spain to the USA, you may have to pay sales taxes on those products.
3. Easy to Open
You can open your LLC in a few simple steps, and the process doesn’t take much time.
You don’t need to travel to the United States or even live there; the process can be done entirely remotely. You just need to be over 18 years old and have a valid passport from your country.
- If you need to close your LLC, the process is cost-effective and quite simple.
- There are no bureaucratic requirements like filing minutes or annual meetings that are usually necessary in C Corps.
- In most states, you can maintain your LLC anonymously.
- You can open a business bank account.
- It’s easier to apply for and obtain an E-2 visa.
Considerations When Opening Your LLC from Spain
If you plan to start your LLC in the USA from Spain, it’s important to consider the following factors.
Accounting and Taxation
- When opening your LLC in the USA, you must also open a commercial bank account.
- You must comply with the tax laws of both countries. We recommend having a tax advisor who can help and guide you through each process and requirement.
Management and Compliance of the LLC in the USA
- Stay informed about annual renewal requirements and record updates in the state where you registered your LLC.
- You need to have records of your business’s operational and financial transactions (such as contracts, tax filings, accounting, and more).
- To maintain the structure and validity of your company, it’s important to hold annual meetings among the LLC members.
Frequently Asked Questions
Can I use the LLC to obtain a U.S. visa?
If your company grows significantly and becomes a substantial business, after a few years, you may be able to apply for an E2 visa to move to the United States.
How do Limited Liability Companies (LLCs) get taxed?
An LLC doesn’t pay taxes as a company because it’s considered a Pass-Through Entity.
This means that an LLC doesn’t retain its earnings; they automatically become the property of the member or members when annual financial reports are issued.
So, the annual profits are passed directly to the member or members, and taxes on those profits are paid at the individual level.
Need Help Opening Your LLC in the United States from Spain?
At Rex Legal, we can assist you with the opening of your LLC, provide guidance on each process and requirement, and help you with ongoing obligations such as annual reports, tax filings, and more.
What are you waiting for to start your dream as an entrepreneur? Contact us now.