Setting Up a Company in the United States
The United States offers one of the world’s largest commercial environments and an exceptionally developed corporate ecosystem. For international founders, establishing an American company can provide access to US customers, investors, payment infrastructure, suppliers and a globally recognised business jurisdiction.
Yet the expression “US company” hides an important distinction.
Companies in the United States are generally established under the law of a particular state, while federal rules sit above that structure for matters including taxation and certain regulatory obligations.
A company formed in Delaware, Wyoming, Florida or New York is therefore an American company, but the corporate rules, annual obligations, state taxes and practical considerations surrounding each entity can differ.
There is another distinction that matters just as much: where a company is incorporated is not necessarily where it conducts business.
A European entrepreneur selling software internationally may have completely different requirements from a founder establishing employees and offices in Miami, or a technology business preparing to raise institutional capital in the United States.
Company formation should therefore begin with the business model and the objective — not with an internet recommendation that every international entrepreneur needs a Delaware or Wyoming LLC.
LLC or Corporation: What Are You Actually Establishing?
Two of the structures international entrepreneurs encounter most frequently are the Limited Liability Company (LLC) and the corporation.
An LLC is particularly flexible. Depending upon its ownership and elections, its federal tax classification can differ from its corporate legal form. For example, the IRS generally treats a domestic single-member LLC as a disregarded entity for federal income tax purposes unless an election is made for different treatment. An LLC with multiple members will generally be classified differently.
This distinction is important because legal form and tax treatment are not always the same thing in the United States.
Corporations operate under another framework and can be more appropriate in situations involving external investors, equity issuance, particular governance requirements or plans for institutional capital.
This is one reason Delaware is so prominent in discussions around American companies. But prominence does not automatically make Delaware the correct state for every founder.
A privately owned international consultancy and a technology company preparing for venture investment should not necessarily be structured identically.
“The question is not simply whether you need an American company. It is what that company needs to do, who will own it and where its business will actually take place.”
Delaware, Wyoming — or the State Where You Actually Operate?
International company formation advertisements frequently concentrate on Delaware and Wyoming.
Both can be useful jurisdictions, but selecting between American states requires more thought than comparing incorporation fees.
Delaware has one of the world’s best-known corporate legal systems and is deeply established within the American corporate and investment environment. Every Delaware entity must maintain a registered agent with a physical office in the state.
Wyoming also has an established LLC framework and permits entities to be formed electronically through the Secretary of State. Wyoming entities have continuing state requirements including annual reporting.
But suppose an entrepreneur incorporates in Wyoming and then genuinely operates a business from California.
The Wyoming certificate does not necessarily eliminate California obligations. Depending on the activities involved, the company may need to register, report or pay taxes in another state in which it is actually conducting business.
This is the concept international founders often miss.
The state of formation and the state of operation can be different questions.
For a business operating remotely outside America, the analysis can be different again.
Consequently, Sutterson Reed does not start with “Delaware or Wyoming?”
We start with what the company will actually do in the United States.
Can a Non-US Resident Own an American Company?
For many ordinary LLC and corporate structures, foreign ownership is possible, making the United States accessible to international entrepreneurs who do not themselves live in America.
But establishing an American company does not give its owner American immigration status or the automatic right to live or work in the United States.
It also does not mean that the owner has moved their personal tax residence to America.
This distinction becomes particularly important for internationally mobile entrepreneurs.
A British, Swiss or French resident can potentially own a US entity while remaining resident in their home country. The company may then have obligations in America while the owner simultaneously has personal or corporate reporting and taxation considerations in their country of residence.
The IRS also operates separately from the state incorporation authorities.
A company may require an Employer Identification Number (EIN) for federal administrative and tax purposes. Importantly for international founders, IRS guidance expressly contemplates foreign responsible parties who do not have and are not eligible for an SSN or ITIN; the Form SS-4 instructions allow “foreign” or “N/A” to be entered in the relevant circumstances.
That is a useful example of why incorporation should not be confused with the entire setup.
The state creates the entity.
Federal identification and reporting are another layer.
Banking is another.
And the owner’s home jurisdiction can create another layer again.
A Foreign-Owned LLC Is Not Automatically a “Tax-Free US Company”
This is probably the most important misconception surrounding American company formation online.
Foreign entrepreneurs are frequently marketed US LLCs using expressions such as “0% tax company”.
That description can be dangerously incomplete.
An LLC’s US federal tax treatment depends upon its classification, ownership, activities and circumstances. The treatment of the foreign owner must then be considered separately under the laws of the country where that person is resident.
There are also reporting requirements that can exist even where the underlying income-tax position appears relatively simple.
A particularly important example concerns a foreign-owned US disregarded entity. IRS instructions require relevant foreign-owned US disregarded entities to file a pro-forma Form 1120 with Form 5472 attached when the applicable reporting requirements are triggered by reportable transactions with related parties.
That matters because transactions between an owner and their own LLC can be relevant for reporting purposes.
An entrepreneur can therefore have a company that owes little or no US federal income tax in a particular situation while still having important federal filing obligations.
Those are not the same question.
There is also the owner’s country of residence.
Imagine a French resident who owns an American LLC but manages the entire business from France, performs the work in France and withdraws the economic benefit personally.
Creating the LLC does not make French tax considerations disappear.
Similarly, a British resident cannot determine the UK treatment of their American company simply by reading how the IRS classifies the entity.
American tax classification and foreign tax treatment need to be considered together.
This is an area where appropriate US and home-country tax advice becomes essential.
Transparency, Registered Agents and Ongoing Compliance
The American transparency landscape has also changed materially.
The Corporate Transparency Act originally introduced federal beneficial ownership reporting for many US entities. However, that position changed in 2025 and has now been made permanent through FinCEN’s August 2026 final rule.
As of the current rules, companies created in the United States are exempt from the federal Beneficial Ownership Information reporting requirement. Certain foreign entities registered to do business in the United States remain within the revised regime.
That does not, however, turn a US company into an anonymous financial vehicle.
Registered agents, state records, IRS requirements and — critically — financial institutions can still require information concerning the people behind a company.
Banks perform their own customer due diligence. Payment providers may do the same. Tax authorities have their own information requirements.
State obligations also continue after incorporation.
For example, Delaware requires LLCs to maintain a registered agent and imposes an annual state tax on LLCs, while corporations operate under their own annual reporting and franchise-tax framework.
The important principle is straightforward:
formation is not maintenance.
A company that was incorporated quickly online still needs to remain compliant after the certificate arrives.
Company Formation and US Banking Should Be Considered Together
An American company can be particularly attractive because of the financial infrastructure surrounding the US market.
But once again, incorporating an LLC does not guarantee an American bank account.
The financial institution performs a separate assessment.
For an international owner, that assessment may involve the identity and residence of the beneficial owner, the nature of the business, source of funds, expected turnover, customers and suppliers, countries involved and anticipated transaction patterns.
Consider two foreign-owned American companies.
The first sells software subscriptions to US customers and receives predominantly USD revenues from clearly identifiable commercial counterparties.
The second has no American customers, no US activity and no operational connection to the United States but expects to receive large international transfers from unrelated countries.
They may have identical certificates of formation.
From a banking perspective, however, they tell completely different stories.
This is why banking needs to be considered before the company structure is finalised, particularly where the owner is non-resident.
An internationally active business may also need more than one account. It could require USD operating facilities alongside GBP, EUR or CHF relationships elsewhere, international payments, foreign exchange and banking infrastructure connected to other group companies.
The correct question is therefore not merely:
“Can we open a US bank account?”
It is:
“What banking architecture does this company need in order to operate?”
A US Company Within an International Structure
The greatest value of an American company often becomes clearer when we stop looking at it in isolation.
Consider a European entrepreneur expanding into the United States.
They may already own an established operating company in Europe. The objective could be to establish an American subsidiary to contract with US customers, employ people locally and receive American revenues.
In that situation, the ownership relationship between the existing company and the new US entity matters.
Now consider another entrepreneur operating an entirely digital international business who has no physical operations in America but wants a US entity for a genuine commercial reason.
That is a different structure.
Or consider a founder expecting external American investors.
Again, the appropriate corporate architecture may change.
This is where simply buying a pre-packaged “US LLC” can become inadequate.
We need to understand the relationship between the American company and the client’s existing companies, residence, ownership, banking, customers, investors and future plans.
Sometimes a standalone LLC is perfectly adequate.
Sometimes a corporation is more appropriate.
Sometimes the US entity should sit underneath another company.
And sometimes establishing an American company adds complexity without solving a meaningful problem.
The objective is not to accumulate jurisdictions.
It is to give each entity a defined function within the wider structure.
Why Sutterson Reed?
Sutterson Reed approaches US company formation as part of a client’s wider international financial affairs.
We begin by understanding what the client is actually trying to accomplish: entering the American market, receiving US revenues, establishing operations, preparing for investment, creating an international business or integrating an American entity into an existing group.
From there, we consider the appropriate jurisdiction and corporate structure alongside ownership, residence, banking requirements and the client’s existing international arrangements.
Where specialist US or cross-border legal and tax advice is required, those questions should be addressed by the relevant professional advisers rather than reduced to generic claims about LLC taxation.
Our role is to coordinate the structure so that the different components make sense together.
Because establishing an American company can be straightforward.
Establishing the right American company, owned in the right way and connected to the right banking and international structure, requires considerably more thought.
Discuss Your US Company Requirements
Whether you are entering the American market, establishing a US LLC or corporation, expanding an existing international business or considering an American company as part of a wider structure, Sutterson Reed can assess the complete objective before the entity is established.
