In this article, you will discover everything about creating an LLC to sell on Amazon.
What are the advantages? Will I have to pay taxes or not? Requirements and steps to create it (regardless of whether you are not a resident of the United States).
What is an LLC in the United States?
A LLC (Limited Liability Company) is a business entity whose primary purpose is to establish a legal separation between the registered company and its owner(s).
So if the company faces a lawsuit, the risk would be for the company, not the individual person(s).
Advantages of an LLC for selling on Amazon
Many people engaged in selling on Amazon are creating their LLCs in the USA from different countries. This is primarily due to its significant advantages, such as:
- You do not pay corporate taxes within the United States.
- You avoid double taxation and minimize the tax burden.
- You can obtain reduced withholding rates on your income from Amazon USA sales.
- You achieve better tax savings and higher profitability.
Can you create an LLC in the USA without the need to live in the country?
Of course, you can.
You don’t need to live in the United States or be born in the country to create your Limited Liability Company.
In fact, there are some misconceptions about this, and we are going to debunk them here:
- You don’t need to travel to the USA.
- They won’t ask you for a Visa or passport.
- You don’t need a physical address or phone number in the USA.
- You don’t need an SSN or ITIN to create your LLC.
So, don’t worry. Below, we will show you the only thing you need to create your LLC for selling on Amazon and how to do it.
Requirements for Opening an Amazon LLC
The only requirement asked of you is to be over 18 years old.
If you are 18 years or older, you can proceed with the step-by-step process to create your LLC.
Steps to Register Your LLC
1. Choose the State
It is necessary to explain that being an online (and not physical) business, there are not many complications when it comes to choosing the state.
What’s important here is that you focus on the one that allows the easiest and most cost-effective setup for the business. The rest (taxes and fiscal matters) won’t be as important, as we’ll explain in detail shortly.
2. Specify the Owners or Members
Will you create your Amazon LLC by yourself or with partners?
It doesn’t matter if you will be the sole member or if there will be several. In any case, the following information must be provided:
- Name of the owner(s).
- Date of birth.
- Country of residence.
- Percentage of ownership.
3. Choose a Name for Your Company
In legal terms, only the following is important:
- It cannot be identical to the name of any other company in the state where you register it.
- The name you register must include the phrase “Limited Liability Company” in its full or abbreviated form: LLC, L.L.C., Ltd, Limited, Company, or Co).
- It cannot contain words that may confuse your LLC with government or federal agencies such as Treasury, State Department, FBI).
- Lastly, it cannot contain restricted or limited words such as Bank, Attorney, University.
However, we have some other (optional) recommendations for the smooth functioning of the name:
- Make it sound distinct from other brands in the same sector.
- Keep it short and easy to understand, write, and pronounce.
- Try to avoid names that start with Y, X, or Z (unless necessary).
- Don’t choose a name based on trends; your name should work in the long run.
- Make it easy to remember.
- Ask your friends and acquaintances for their opinions on the name before registering it.
4. Create an Operating Agreement
We always like to mention the Operating Agreement, even though it is not a mandatory step when creating your LLC.
Because we consider it extremely necessary, as it is a document that establishes rules, procedures, and decision-making regarding finances.
This is important to know what to do in case of a dispute with one of the members, what percentage belongs to each owner, what to do in case of a certain business emergency, etc.
Even if you are the sole member, it’s good to have an Operating Agreement.
Accepted and Non-Accepted Countries by Amazon
Previously, only some countries were accepted. But gradually, they have expanded to different countries, and currently, the vast majority can sell with Amazon.
However, there are still some countries that are not accepted by Amazon. Let’s see which ones are accepted and which ones are not.
- United States
- Costa Rica
- Dominican Republic
- El Salvador
- North Korea.
- South Sudan.
- North Sudan.
Tips to Help You
Remember to Fulfill Your Annual Obligations
Even though you don’t have to pay taxes within the United States, you must declare your taxes annually. This includes other obligations like reports and the registered agent.
Create a Bank Account for Your LLC
It’s not good practice to use the same bank account for both your personal and business income and expenses. These should be separate, and you should never mix them.
So, we recommend opening a bank account for your LLC and managing all your finances from there.Certainly, here’s the translation for the provided text into English: “`html
Need Help Creating Your LLC for Amazon Sales?
Remember that at Rex Legal, we want to assist you throughout the entire process of creating your company. We handle all the tedious and complex paperwork and processes to ensure proper registration and efficient legal and tax compliance.
So, if you want to establish your LLC, contact us.“` If you have any more text to translate or need further assistance, please feel free to ask.