US LLC Glossary for Non-Residents (2026)

Plain-English definitions of every term you'll see when forming a US LLC as a non-resident — vetted by US-licensed CPAs. Bookmarkable, no fluff, written for first-time founders.

Start my LLC — $149

Jump to category

Legal (6)Tax (4)Banking (1)Identity & Tax IDs (3)US States (3)

Legal

LLC (Limited Liability Company)#: A US business structure that separates your personal assets from business debts and lawsuits while keeping taxes simple. Owners are called members. For non-residents, an LLC is the cheapest way to get a US-recognized legal entity, open Stripe and PayPal, and bank in the US — without paying US federal income tax on foreign-source income.
Registered Agent#: A person or company with a physical street address in the LLC's state of formation, designated to receive legal documents and government mail on behalf of the LLC. Required by every US state. Non-residents must hire a commercial Registered Agent — typical cost $99-$200/year. Included free for year 1 in every LLCora plan.
Operating Agreement#: An internal written contract among LLC members describing ownership percentages, profit allocation, management rules, voting rights, and dissolution procedures. Not filed with any state but required by most US banks (Mercury, Wise, Brex) to verify ownership when opening an account. Always required for foreign-owned LLCs to claim tax treaty benefits.
Articles of Organization#: The legal document filed with the US state Secretary of State to officially form an LLC. Contains the LLC name, principal address, Registered Agent details, and management structure. Once approved (24h-7 days depending on state), the state issues a stamped Certificate of Organization that proves your LLC legally exists.
BOI Report (Beneficial Ownership Information)#: A report filed with FinCEN (US Treasury) disclosing the natural persons who own or control 25%+ of an LLC. Required by the Corporate Transparency Act since 2024 for almost every US LLC, including foreign-owned. Filed online at boiefiling.fincen.gov. Penalty for non-filing is $591/day. Filing is free and takes 10-15 minutes.
Single-member LLC (SMLLC)#: An LLC with exactly one owner (member). Treated by the IRS as a disregarded entity by default, meaning the LLC itself files no federal income tax return. The owner reports business activity on their personal return. For foreign-owned SMLLCs, Form 5472 is still required annually, even with $0 income, to avoid the $25,000 IRS penalty.

Tax

Form 5472#: Annual IRS information return required for any US LLC with at least 25% foreign ownership, including ALL foreign-owned single-member LLCs (treated as disregarded entities). Reports related-party transactions between the LLC and its foreign owner. Penalty for not filing is $25,000 per year. Must be filed even with $0 income. Due April 15 with extension to October 15 available.
Pass-through Taxation#: A tax treatment where the LLC itself pays no federal income tax. Instead, profits and losses pass through to the owner's personal tax return. Single-member LLCs default to this treatment (disregarded entity). For non-residents with no US-source effectively connected income (ECI), this often means $0 in US federal tax owed.
ECI (Effectively Connected Income)#: Income that a foreign person earns from actively conducting a trade or business in the United States, taxed at regular US graduated rates. For non-resident LLC owners selling online services or digital products from abroad to anyone (including US customers), the income is generally NOT ECI — so no US federal income tax applies. Selling physical goods from a US warehouse may create ECI.
Franchise Tax#: An annual state tax charged for the privilege of having a business entity registered in that state, independent of income. Delaware charges $300/year for LLCs. California charges $800/year minimum. Wyoming and New Mexico charge $0. Franchise tax must be paid even if your LLC made no money that year, or the state will eventually dissolve your LLC.

Banking

Mercury Bank#: A US-based digital bank popular with tech startups and non-resident LLC owners. Mercury offers free business checking, debit cards, and ACH/wire transfers, with no monthly fees and no minimum balance. Approval for non-residents requires a Wyoming or Delaware LLC, valid EIN, Operating Agreement, and proof of business activity. Approval rate runs ~70-85% for prepared applicants.

Identity & Tax IDs

EIN (Employer Identification Number)#: A 9-digit federal tax ID issued by the IRS to identify a business. Required for opening US bank accounts, applying to Stripe and PayPal, hiring employees, and filing taxes. Non-residents can apply for an EIN without an SSN or ITIN via IRS Form SS-4, faxed to the IRS international office. Typical delivery is 7-30 days; LLCora gets it in 48 hours.
ITIN (Individual Taxpayer Identification Number)#: A 9-digit tax-processing number from the IRS for individuals who must file US taxes but cannot get an SSN. Non-resident LLC owners usually do NOT need an ITIN — the LLC's EIN is enough for banking and payments. You only need an ITIN if you have personal US-source income (e.g., royalties, dividends from US companies, real estate income).
CP 575 Letter#: The official IRS confirmation letter that proves your EIN is real. Issued once, never re-issued (replacements use a substitute called Form 147C). Banks, Stripe, PayPal and Mercury usually require the CP 575 (or a 147C) before they approve your business account. Lost CP 575s can take 30+ days to replace via IRS phone request.

US States

Wyoming LLC#: An LLC formed in the state of Wyoming. The most popular state for non-resident LLCs because Wyoming has no state income tax, no franchise tax, lowest annual report fee ($60), strong asset-protection laws, and member privacy (member names are not published in public records). Wyoming is also the most Mercury-Bank-friendly state for non-residents.
New Mexico LLC#: An LLC formed in New Mexico. The cheapest US state to form and maintain an LLC: $50 one-time filing fee and NO annual report or annual fee. Member names are not published publicly. Best for non-residents on a tight budget who do not plan to bank with Mercury (which prefers Wyoming or Delaware addresses).
Delaware LLC#: An LLC formed in Delaware. Famous for the Court of Chancery (specialized business court) and venture-capital-friendly laws, which is why most US startups raising VC incorporate as Delaware C-Corps. For non-residents not raising VC, Delaware is the most expensive option: $300/year franchise tax with no income-tax benefit over Wyoming or New Mexico.

Ready to launch your US business today?

Join 1,200+ founders who chose the fast, transparent way.

Start my LLC — $149