Nevada is one of the most popular US states for foreign-owned LLCs. Although it’s not the highest-ranking state, it’s still a great option if you own a digital business and want to optimize your tax strategy. If you do everything the right way and the type of your business allows for it, you can expect to legally pay 0% in taxes.
In this article, we’re going to talk about how you can open an LLC in Nevada as a foreigner and get all the tax and other benefits that come with it. We’ll go through the seven crucial steps for setting up your own nonresident Nevada LLC. But first, let’s briefly discuss the main reasons why so many foreigners open LLCs in Nevada.
Why Open a Nevada LLC for Nonresidents?
Nevada is one of the US states that is popular with international entrepreneurs looking to optimize their taxes. If your business doesn’t generate US-source income and you create the right LLC structure, you can legally pay 0% in taxes. In our opinion, if you’re looking to do that, opening an LLC in Delaware or setting up a company in Wyoming is a much better option. These two states have the best privacy laws and are cheaper than Nevada. However, with that said, having a nonresident LLC in Nevada is still a good option for tax optimization.
Another reason for opening an LLC in Nevada as a foreigner is to invest in real estate or open a brick-and-mortar business that generates US-source income. These types of businesses are not tax-exempt, and you will have to pay a certain amount of taxes. How much depends on your industry of choice.
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How to Open an LLC in Nevada as a Foreigner?: 7 Main Steps
Here are the main steps for foreigners who want to open an LLC in Nevada:
1. Choose a Business Name
The first step in opening a business in Nevada as a foreigner is to choose a company name and make sure it’s available for use. To check the name availability, you should go to Nevada’s official business website and search to see if your preferred name is taken.
Also, keep in mind that there are certain LLC naming requirements you need to follow in order to register a business in Nevada. Some of these requirements are:
- The name of your LLC must include designators “Limited-Liability Company”, “Limited Company”, or “Limited”; or abbreviations of those designators “Ltd.”, “L.L.C.”, “LLC” or “LC”
- The name of your LLC must be distinct from other registered entities
- The name of your LLC doesn’t contain forbidden words
You can also reserve an LLC name for 90 days. To do that, you need to file
a name reservation request with the Nevada Secretary of State. You can do this through the SilverFlume online portal, by sending in the request via mail, or delivering it in person. The fee for the “Company Name Reservation” application is $25.
Step 2: Find a Registered Agent
All companies in Nevada need to have a registered agent responsible for handling all of their legal correspondence. A registered agent can be a person or an agency, and they must have a physical address in Nevada (P.O. boxes are not allowed in this state). All registered agents must be available for contact during regular work hours. Additionally, the names and addresses of registered agents are publicly listed.
Step 3: File the Necessary Documents
The next step to open LLC in Nevada as a foreigner is to file the articles of organization with the Nevada Secretary of State. You file the required forms directly online or send them in by mail to the following address:
Secretary of State, New Filings Division, 202 North Carson Street, Carson City, NV 89701-4201
The information you’ll have to provide in your nonresident Nevada LLC’s articles of organization includes:
- The name of your company
- LLC Address in Nevada
- Address and general information about your registered agent
- Information about your LLC’s structure and operational details
The filing fee you’ll need to cover is $75; however, that’s not all. You’ll also need to file the Initial List of Managers or Managing Members. The fee for this is $150. And, you’ll need to pay for a State Business License, which is another $200. This makes the total fee to register an LLC in Nevada as a foreigner $425.
Step 4: Obtain an EIN
To get your Nevada LLC for nonresidents operational, on a federal level, you need to get an Employer Identification Number or EIN. This is a unique 9-digit number issued to all LLCs and other business entities registered in the United States. It’s used to distinguish between businesses and prevent tax fraud, among other things. And, you’ll also need it to open a US bank account as a foreigner.
If you have a US Social Security Number (SSN), getting an EIN is really simple. All you need to do is visit the US government portal and complete a short form. This will allow you to get an EIN in just one day. However, if you don’t have an SSN, then the process of getting an EIN becomes a lot more difficult.
To obtain an EIN without an SSN, you’ll need to fill out the SS-4 form and send it through regular mail or via fax. Sadly, the online application is only available if you have an SSN. Some of the information you’ll need to prepare for includes:
- Reasons for applying for an EIN
- Nonresident Nevada LLC formation date
- Industry of your company
The cost of obtaining an EIN is not high. The main issue with the EIN application is that processing takes a long time, and even the slightest mistake can set you back weeks or even months. The typical wait time to get an EIN is between 4 and 6 weeks. So, in the case that your application gets rejected, you’ll have to start all over again and wait an additional 4 to 6 weeks.
To avoid this, our advice is to get in touch with professionals who will ensure that your EIN application is done correctly, the first time around, saving you a lot of time.
5. Create an Operating Agreement
An operating agreement is an important document that should contain the main details about the structure of your LLC, such as:
- The list of owners or members (i.e, Membership structure)
- Obligations of owners or members
- Distribution of ownership among LLC members
This document is not mandatory by Nevada law, but it is recommended to have it. It can save you a lot of trouble if you ever end up in a lawsuit. It’s also one of the usual requirements for opening a US business bank account.
6. Open a US Business Bank Account
To have your nonresident LLC in Nevada fully operational and ready to receive payments, you need to set up a US business bank account. The usual things you’ll need to prepare to apply for an account include:
- Your company’s EIN
- Articles of organization
- LLC’s operating agreement
- Your company’s official website
Once you get everything ready, you can start applying at different banks. Your options include:
- Regular or big US banks (e.g., Chase, JP Morgan)
- Credit unions and medium-sized banks
- Online banks (e.g., Wise or Mercury)
Getting an account with a big US bank will be the most difficult to achieve. You’ll most likely have to travel to Nevada and have an in-person meeting with bank representatives. Credit unions and medium-sized banks will allow you to apply online, but will ask for a sizeable downpayment, usually between $25,000 and $50,000.
Opening an account with an online bank is the most popular option for foreigners. The whole process can be done online, and is usually less strict than other options. However, we have to mention that in the last couple of months, almost all online banks have heightened their standards for opening accounts.
Once you get your US bank account, you can use it to open a US Stripe account, which is especially helpful if you have a digital business and you receive payments from around the world.
7. File the BOI Report
And lastly, the final step to open Nevada LLC as a foreigner is to file the Beneficial Ownership Information Report, or BOI, with the Financial Crimes Enforcement Network (FinCEN). You must do this during the first 30 days of forming an LLC.
Filing a BOI is completely free. You have to do it when you form an LLC, and if the ownership structure changes.
