How do I start a LLC business in America as a foreigner?

Well, before you decide that you want to start an LLC in California, you might want to do some research to make sure that you REALLY want to do that. Here’s why I say this. The tax advantages may not be what you think they are. According to the California Tax Franchise Board, you may have some additional forms and fees on top of the registration fee. So, if you’re starting a franchise, you’d have to pay an additional $800 each year.

Even if you’re not starting an LLC because of a franchise opportunity, you could still have to fill out more tax and other forms that what you’d like. If you do business in California and in other states, you will likely have to set aside part of your income and report it on Schedule R. You’re also going to need to file several other forms. They do have a reduced filing program, but it also requires that you jump through several hoops. To learn more about the filing requirements associated with LLCs in California, visit the California Tax Service Center’s website. Keep in mind that everything on that site is in addition to the requirements on the Secretary of State website to form an LLC in California.

Then, depending on your industry, you may need to collect sales tax. To do that, more forms. So, it’s not necessarily as cut and dry as it sounds.

It’s a lot of paperwork and you may not save as much as you’d think. If you do business in California or in any other state, you’ll likely have to report the income. Then, consider the tax liabilities in your country.

As far as how you actually setup the LLC in California, you can do it yourself by going to the Secretary of State website for California and grabbing (and completing) the forms and paying the associated fees. Make sure that you read the documents carefully and properly fill them out. Also, you should keep in mind that LLCs have a limited lifespan. You’re going to have to renew your LLC each year.

Your next option is to work with a third-party company who specializes in setting up LLCs for you. Something important here to remember is that unless they are a licensed attorney, they cannot give you legal advice to help you decide if an LLC really is in your best interest. They are completing and filing the forms for you. You have to pay the associated filing fees along with a fee to cover their expenses.

Your final option is to work a business attorney who can help you weigh your options. You can get the advice that you need and make sure that an LLC in California would really meet your needs. LawTrades is a legal marketplace that provides access to licensed business attorneys for an affordable fee. Feel free to message me with any questions!