Managing a limited liability company (LLC) from abroad is not uncommon at all. Many foreign business owners can and do regularly participate in major business decisions in the U.S. through phone or video conference calls. As non-residents of the state where the LLC is registered, owners can still perform high-level management duties without needing a U.S. visa or work authorization—so long as they operate from outside the U.S. This includes activities such as opening business accounts, hiring U.S. employees and contractors, overseeing business operations remotely, and engaging in business transactions with other persons or entities from abroad.
Are Foreign Business Owners Allowed to Run an LLC From Within the U.S.?
Business owners are not legally allowed to perform work for an LLC while physically in the U.S. without work authorization. If a foreign owner were to physically enter the U.S. to perform day-to-day operations or if they have a salary for work performed within the country, they will need to obtain an applicable work visa beforehand. U.S. immigration laws prohibit foreign nationals from engaging in “gainful employment” while physically present in the country if they lack proper work authorization. Notably, managing an LLC while within the U.S., even without a salary, could be considered unauthorized work, and may result in significant fines and possible deportation.
So, what happens when a foreign business owner visits the U.S.? For short visits to the U.S. for business purposes, a business visa (B-1) may be appropriate for activities like attending conferences, meetings, negotiating contracts, and meeting with legal counsel. Applicants for the B-1 visa must prove they have a foreign residence they don’t intend to abandon, a legitimate business purpose in the U.S., and a limited duration of stay. Alternatively, citizens of participating countries may take advantage of the Visa Waiver Program. Critically though, these visas do not allow business owners to run the day-to-day operations of an LLC.
To run your business as a foreign citizen from within the U.S., you need to obtain an appropriate work visa. Business owners should consult with a qualified immigration attorney for visa applicability to their specific circumstances. As an example, an intracompany transferee visa (L-1A) may work if your U.S. LLC has a qualifying relationship with a foreign entity you control. This type of visa is appropriate for individuals working in a managerial or executive capacity with a branch, parent, affiliate, or subsidiary.
Foreign Business Owners Looking to Expand Into the U.S.
There are multiple methods that foreign entrepreneurs can employ to expand their businesses into the U.S. such as the International Entrepreneur Rule, which grants parole to qualifying startups with substantial potential for rapid growth and job creation. E-2 Investor visas temporarily allow a foreign national from a treaty country seeking to enter the U.S. solely to develop and direct the enterprise, investing a substantial amount of capital in a U.S. business. These avenues provide authorization to work in the U.S. for limited time frames.
For foreign entrepreneurs looking to expand into the U.S., setting up a stateside subsidiary or branch office can provide control, liability protection, and other potential tax benefits. A subsidiary is a separate legal entity owned by a foreign parent company and a branch office is an extension of the foreign company. As mentioned above, having a subsidiary in the U.S. is helpful in facilitating movement of employees to and hiring in the U.S. Foreign owners should be aware of the federal labor regulations such as the Fair Labor Standards Act and the Americans with Disabilities Act and other state and local regulations.
Basic Legal and Tax Requirements
The underlying U.S. LLC must still be in compliance with applicable laws. Every LLC must appoint a registered agent in the state where the company is registered to receive legal and tax documents on behalf of the LLC. A foreign owner must obtain a U.S. Taxpayer Identification Number for individual tax filings, and the LLC must get an Employer Identification Number. U.S. Tax law requires that foreigners pay taxes on any earnings made in the U.S. The LLC must also meet all federal and state filing requirements. Furthermore, foreign-owned entities are required to file additional documents, such as Beneficial Ownership Information under the Corporate Transparency Act.
An LLC with a foreign owner cannot choose to be taxed as an S corporation since foreign citizens may not be owners in an S corporation. It may, however, choose to be taxed as a C-corporation. Foreign owners may also act as consultants to the LLC under a written consultant’s agreement completing all consulting work within their home country and billing the LLC in the U.S. In addition to payroll tax obligations, U.S. subsidiaries are also subject to federal income tax as well as state income taxes where they operate.
Conclusion
In essence, foreign nationals can own and manage a U.S. LLC remotely from abroad, even handling high-level managerial operations. However, it’s important to comply with applicable immigration laws, which strictly regulate physical presence and employment within the U.S. While short visits are permitted for business activities like meetings or conferences, day-to-day management or gainful employment requires obtaining proper work authorization. The process of obtaining proper documentation may be complex depending on the circumstances and may take a substantial amount of time to complete, so consulting with a qualified attorney is essential to finding the appropriate solution for each individual situation.
