LLC vs C-Corp for Non-Residents: Which One Should You Pick in 2026?

99% of non-resident founders should pick LLC. Here's the framework.

LLC = pass-through entity

• The LLC itself pays no federal income tax
• Profits "pass through" to you personally
• As a non-resident with NO US-source income (e.g., your clients are global, your work is done outside US), you pay $0 in US federal income tax
• You still have to declare income in your country of residence

C-Corp = double taxation

• The C-Corp pays 21% federal corporate tax on profits
• When you take dividends, you pay another 30% withholding tax (or treaty rate)
• Effective tax: ~45% combined
• Why anyone picks this: US VCs require Delaware C-Corp for institutional investment

The "US-source income" trap

If your work IS performed in the US (employees in US, office in US, dependent agents in US), your LLC profits become "Effectively Connected Income" (ECI) and you owe US tax. Most non-residents working remotely from their home country are NOT in this situation.

Decision tree

• Are you raising $1M+ from US VCs in the next 18 months? → C-Corp Delaware
• Anything else? → LLC (Wyoming or NM)
• Already have an LLC and now want to raise? You can convert to C-Corp later

What we file

LLCora files LLCs only. If you genuinely need a Delaware C-Corp for fundraising, we'll honestly redirect you to Stripe Atlas or Clerky — those are better-suited for that path.