Do you need a US LLC at all?
Most pages on this site assume you have already decided. This one does not. A US LLC brings a recurring cost and a federal filing obligation, and for a good number of founders the honest answer is that it is not yet worth it.
Side by side
Verified July 28, 2026
| US LLC | Invoicing as an individual | |
|---|---|---|
| Setup cost | $249 plus a $50–$425 state fee | Nothing |
| Annual state cost | $0 in Arizona and Ohio, $60 in Wyoming, $800 in California | None |
| Annual US filingThe IRS penalty for not filing 5472 starts at $25,000. Budget for an accountant. | Form 5472 with a pro-forma 1120 for a foreign-owned single-member LLC, generally required even with no revenue | None |
| Stripe access | A US entity with an EIN can sign up through standard self-serve onboarding | Depends entirely on your country — unavailable in most markets we serve |
| US client paperwork | Completes a Form W-9 | Completes a Form W-8BEN or W-8BEN-E, which is more work for the client |
| Liability | The company contracts, subject to operating it properly | You contract personally |
| Tax where you liveForming a US company does not move your tax residence. Nobody should tell you otherwise. | Unchanged | Unchanged |
| Reversibility | Closing properly takes a state filing and a final return | Nothing to unwind |
Which one fits you
Choose US LLC if
Something concrete is blocked. Stripe is unavailable where you are and you need card payments. A US client has asked for a W-9 or cannot onboard a foreign vendor. A supplier will only open a trade account to a US entity. Those are real blockers with a clear price attached, and the structure resolves them. If you can name the blocker, forming is straightforward to justify.
Choose Invoicing as an individual if
You cannot name a specific thing that is blocked. If your clients pay you without difficulty, your local processor handles your volume, and nobody has asked you for US tax paperwork, a US LLC will cost you a few hundred dollars a year plus an accountant, in exchange for a feeling of legitimacy. That is a bad trade, and we would rather say so than take the order. Come back when something is actually stuck.
The recurring cost people leave out
The state fee is the visible number and the smallest one. A foreign-owned single-member LLC generally has to file Form 5472 with a pro-forma Form 1120 every year, triggered by reportable transactions rather than by profit — so even funding the company or paying its fees is usually enough to require it. It cannot be filed electronically, and the IRS penalty starts at $25,000 with a further $25,000 for each 30-day period after 90 days from notice. In practice that means an accountant every year, and that fee typically exceeds the state's.
What genuinely changes, and what does not
Changes: access to Stripe and US payment rails, the ability to complete a W-9 rather than a W-8BEN-E, supplier and platform accounts that require a US entity, and a company rather than a person as the contracting party. Does not change: where you are tax resident, what you owe at home, your eligibility for US banking where the provider excludes your country, or your sales tax position if you sell goods into US states.
A test you can apply in one minute
Write down the specific thing that is currently blocked, and what it costs you per year. If the answer is 'Stripe is not available in my country and I am losing sales', the LLC pays for itself immediately. If the answer is 'it seems more professional', it does not — a decent website and clear invoicing do that for free. We publish this page because the second answer is more common than the industry admits, and because a customer who forms for a real reason stays a customer.
What this page does not cover
This is not tax advice, and the calculation depends on your country, your customers and your volume. What we can say plainly is that a US LLC has a genuine annual cost including professional fees, that it does not change your tax residence, and that anyone selling it as a way to reduce tax without reviewing your situation is describing something they cannot deliver.
Common questions
Is it worth forming a US LLC if I only have a few clients?
Usually not, unless one of those clients is blocked by the lack of a US entity. At low volume the annual accounting and state costs can exceed anything the structure returns. The trigger should be a specific blocker, not a general ambition.
Will a US LLC lower my taxes?
It does not change where you are tax resident, and your home country's rules continue to apply to you. Whether there is any benefit in your particular position is a question for a qualified adviser who can see your facts — not something a formation service can promise, and we do not.
What is the real annual cost?
The state's annual report, ranging from $0 in Arizona and Ohio to $800 in California, plus our renewal, plus an accountant for Form 5472 and the pro-forma 1120. That last item is the one most often left out of comparisons and it is frequently the largest.
Can I form one later if things change?
Yes, and for many founders that is the right sequence. Formation takes days in most states — Colorado and Virginia accept online filings in the same session. There is little advantage in forming before you need it and a real annual cost to doing so.
Ready to form your LLC?
Wyoming filing, Registered Agent and EIN guidance from $249 plus the state fee. Filed in one to three business days.
RazorFile files companies. We are not a law firm or tax advisor, and nothing on this page is legal or tax advice.