How Can Foreigners Open an LLC in Florida in 7 Steps?

If you’re wondering — Can a Foreigner Open an LLC in Florida? —, the answer is absolutely yes! One of the main reasons for foreigners opening LLCs in Florida is to purchase real estate through it. Florida is amongst the most popular US states when it comes to foreign real estate investing, with about a quarter of all foreign buyers choosing this Sunny state. The amount of money nonresidents put into Florida’s properties comes to around 10 billion dollars per year. 

So, if you’re one of those real estate investors or are just looking to open a US LLC as a foreigner for some other reason, you can absolutely do it in Florida. Now, the question becomes — how to open an LLC in Florida as a foreigner? Before we answer that, let’s briefly discuss what a nonresident Florida LLC is and why would you want to open an LLC in Florida?

Nonresident LLC Florida: Top Benefits

Opening an LLC in Florida as a foreigner comes with a ton of different benefits, including

• Protection from liability
• Various tax benefits
• Access to the US market and US financial services
• Low annual fees for LLCs
• No state income tax

What Is a Nonresident Florida LLC?

A Nonresident Florida LLC is a type of Limited Liability Company registered in Florida and owned by a foreign citizen. Simply put, it means that a business is incorporated and legally recognized in Florida while its owners or members may live in other US states or foreign countries. 

Having an LLC in Florida essentially allows nonresidents to do business in the US (in this case, the state of Florida) without having a US residency. Now, let’s take a look at the two top reasons foreigners open LLCs in Florida.

Can a Foreigner Open an LLC in Florida? Two Main Reasons To Do It

Indeed! More than 3 million business entities operate in Florida, and thousands of new ones are formed each year by US citizens and foreigners alike. So, to get back to the question — why would you want to open an LLC in Florida as a foreigner? The two main reasons for this are:

1. Open a Business That Operates in Florida

If your goal is to run a business in Florida that’s making money from US sources, you have to open an LLC in Florida. This will allow you to comply with all the rules and regulations set by Florida’s government, but also to take advantage of various tax benefits.  

For example, let’s say you want to buy a rental property in Florida. Because the property is physically in Florida, your business operation is literally in Florida. This means that any income you generate is considered US-source income and will be taxable under US laws. 

This rule also applies to any other type of business that’s making money from US sources (e.g., hairdresser, shop owner, car insurance, etc.). Basically, for almost all types of what we would call “old school” business, you need to open an LLC in Florida if you want to operate in this state.

 2. Open a Business That Doesn’t Operate in Florida

Not many people are aware of this, but the US (particularly certain states) is the best tax haven comparable to those tiny island countries we’ve all heard of (e.g., the Cayman Islands, the Virgin Islands, etc.). However, we need to emphasize that this is only true if your company:

• Is not owned by a US citizen or Green card holder
• Doesn’t have employees or facilities in the US
• Doesn’t generate income from US sources 

Let’s say you operate an online business in Europe, and all of your customers are from there. If you register your company in one of the European Union countries, you can expect to pay an average corporate tax of around 23,45% per year. But, if you register your company in the US, you can create a business structure where you don’t have to pay any corporate taxes at all. 

Delaware and Wyoming are two of the best states for this practice, and Florida is not far behind. However, a couple of things hold Florida back, including:

• The names of all LLC owners are publicly listed, making it challenging to protect the identity of business owners (can be done, but it’s a costly option)
• The system is outdated, and it takes longer to open an LLC in Florida than in some other states

So, if your goal is to open a US LLC for your online business, you should probably look to do that in Delaware or Wyoming. These two states made a business out of serving as tax havens for companies that don’t generate US-source income.  

We can help you open a US LLC for your online business in Florida, Delaware, Wyoming, or any other state in the US.

Now, before we move on to answering how to open LLC in Florida as a foreigner, let’s take a brief look at what is US-source income and how to know if your business has it or not?

How do I Know If My Business Has US-Source Income or Not?

The easiest way to determine whether your business has US-source income or not is to evaluate the exact source of your income. For example, if you are:

• Selling services — the physical location where those service are performed usually determines the source income. If you’re performing a service outside of the US, the income from those will be considered non-US-source income.
• Renting real estate — the physical location of the piece of real estate in question determines the income source. If the rental property is in the US, than any income generated from it (i.e. rent) is considered a US-source income.
• Collecting dividends — the physical location where the company giving out dividends is located or registered, detemiens the income source. If the company is US-based, than the income will be considered US-source income.

These example are there to illustrate what US-source income is in the simplest way possible. If they are not helpful to your specific situation or you are not 100% sure whether your business has US-source income or not, we advise you to contact a professional. This isn’t something you want to get wrong, as it can cost you a lot money and time.

NRI CEO, Luka Malkovich, has helped 100s of foreign entrepreneurs open LLCs in the US. You can book a 15-minute free call with him, to go trough the basics of your business and figure out the exact income source.

How Can a Foreigner Open an LLC in Florida: 7 Key Steps 

Here are the key steps you need to go through to open an LLC in Florida as a foreigner: 

1. Pick a Name

First things first, you have to choose a name for your LLC. Every business entity must have a unique name that’s different from any other business registered in Florida. To make sure the name you choose for your LLC is truly unique (i.e., no other business entity is using it), you can search through Florida’s Department of State website. When it comes to opening LLCs, the name of your company must include an LLC identifier (name of the company followed by “LLC” tag). 

2. Enlist the Services of a Registered Agent

All businesses in the state of Florida must have a legal entity or an individual who poses a physical address in this state — that is, a registered agent. The primary responsibilities of a registered agent are to receive all legal documents sent by Florida State to your company and to be available during regular business hours (usually for the purposes of receiving such documents). 

Now, when you’re a foreigner trying to open an LLC in Florida, the assumption is that you don’t have a physical address in the state. In that case, you need to hire a registered agent — a business entity or an individual who will receive the correspondence between your company and Florida’s government but also assume the legal responsibility that comes with it. To learn more about the legal responsibility of registered agents, check out the 2024 Florida Statutes. 

Want to open an LLC in Florida? NRI can make that happen for you. Book a free call to learn more.

3. File the Legal Paperwork

The next step is to complete and file the articles of organization. There are two ways to do this:

• Via a PDF document that you can fill out by hand (if you want to send the papers through mail or deliver them in person)
• Through an online portal where you can input all the information digitally

Both methods work just fine. However, it’s important to mention that the majority of foreigners open LLCs in Florida using the fully online method (because most of them are not physically present in the state).

4. Get an EIN

EIN, or Employer Identification Number, is a 9-digit number issued by the IRS to all business entities registered in the US. The main purpose of an EIN number is to help the US government distinguish companies for taxation and other legal reasons. 

Getting an EIN as a foreigner without SSN or ITIN is a pretty straightforward process, at least on the surface. First, you need to complete the SS-4 form by inputting the following information:

• Type of business entity you need the EIN for,
• The reasons for the EIN,
• The formation date 
• The industry of your business

Although this does seem easy, many EIN applications are rejected due to various paperwork mistakes. Now, making a mistake on the required forms is not the end of the world, but it will make the process of forming an LLC last longer. In Florida, it takes between 3 to 4 weeks to get an EIN(if you don’t have SSN or ITIN) and between 5 to 10 working days to open an LLC, so every mistake you make will mean that you have to restart the whole process from scratch.

NRI’s team of specialists we’ll make sure that the paperwork is done right the first time! Book a free call to learn more about how we can help you get an LLC in Florida as a foreigner. 

5. Create an Operating Agreement 

Creating an operating agreement is one of the most vital steps in forming an LLC because it determines the way your business is going to function. This legal document should outline the entire management structure, various intra-company responsibilities, operating procedures, and more. It defines the rights and obligations and is especially important when an LLC has more than a single member. 

If you ever want to get a loan for your business, buy or sell a piece of real estate, or if you end up in a litigation process, the first thing everybody is going to look at is your company’s operating agreement. That’s why it’s really important to create an operating agreement that’s unique to your specific situation and that perfectly outlines all responsibilities and obligations of all LLC members (e.g. founders, managers, directors, etc.). 

6. Open a US Bank Account

More and more foreigners get their application for a US bank account rejected. The reasons are varied and sometimes out of their control. 

For example, some banks have blacklisted certain countries, making it impossible for anyone coming from those countries to open a US bank account with them. Another big reason for rejection is that certain banks simply don’t want to get involved with specific types of business (e.g. gambling, pornography, and similar) because they deem them too risky. Lastly, one of the main reasons for rejection is the lack of knowledge regarding the process of opening a US bank account. Some people don’t know how to fill out the US bank account application, or they make a mistake in one of the previous steps for opening an LLC in Florida as a foreigner. 

Whatever the case is, no company formation process is truly done until you open a business bank account. The same is true when opening an LLC in the US as a foreigner — you need to open a US bank account before your company can actually start doing business.

To open a business bank account, in most cases, you’ll need:

• An EIN for your company
• Articles of organization
• An operating agreement
• Website for your company 

You can open a US business account for your LLC with a regular or an online bank. Most regular banks have an unspoken policy of  which simply states “meet your clients”. So, if you want to open a bank account with a regular bank (e.g. Chase), you’ll have to fly out to Florida and have an in-person meeting at the bank of your choosing, before getting an account. 

On the other hand, online banks are far less stringent and are much easier to deal with and open an account with. This is precisely why they are much more popular with foreigners than regular banks are. Some of the online banks that foreigners use to open a US bank account include:

• Wise
• Mercury
• Revolut Bank

7. File BOI Report

A beneficial Ownership Information Report, or BOI, is a piece of legal paperwork that most of the businesses in the US have to file with the Financial Crimes Enforcement Network (FinCEN). Companies that meet the criteria to file this paperwork and are formed on or after the first of January 2024 must file BOI during the first 30 days of the company’s formation. The whole process can be done online, and the BOI report doesn’t need to be rewned (unless the relevant company information changes). It is completely free.