LLC in the U.S. for non-residents, but its value depends strictly on the global legal and tax context.

• a limited liability members,

• a great statutory flexibility,

• no minimum legal capital.

It is legally possible for a non-US resident (non-US person) to be a sole partner or member of an LLC, with no US residency requirement.

Governance can be :

• member-managed (managed by the partners),

• manager-managed (delegated management).

The location of actual management is a key factor in subsequent tax analysis.

General tax framework

For U.S. federal income tax purposes, an LLC is a transparent by default“ structure” :

• Single-member LLC: treated as a disregarded entity,

• Multi-member LLC: assimilated to a partnership.

It is possible, under certain conditions, to opt for taxation as a corporation (C-Corp), but this choice profoundly alters the tax system and obligations.

For non-residents, U.S. taxation depends mainly on the type of income:

• US-sourced income (U.S.-source income),

• effectively connected income (ECI),

• or income considered non-taxable in the United States.

What this structure really does

In fact, an LLC owned by a non-resident can :

• legal ownership of a commercial or service activity,

• the signing of contracts with American and international partners,

• opening business bank accounts,

• invoicing for services or sales of goods,

• limiting legal liability to the company level.

Tax-wise, it can, in certain specific cases, not be subject to federal tax on profits, provided that :

• the activity is not considered to be carried out in the United States,

• the income does not qualify as U.S. source income,

• it has no permanent establishment in the United States.

These elements are the result of a legal and factual analysis, and not of an automatism linked to the legal form itself.

Limits and points of vigilance

An American LLC does not :

• to avoid tax obligations in the manager's country of residence,

• avoid taxation by simple choice of jurisdiction,

• to artificially dissociate an activity from its actual location.

A number of points require particular vigilance:

• Place of actual management if management is exercised from another country, that country can claim the right to tax the profits.

• Economic substance A lack of real resources, operational coherence or economic justification can weaken the structure.

• U.S. reporting requirements even if no tax is due, certain declarations remain mandatory (e.g. specific IRS forms).

• Tax treaties Their application depends on the exact tax status of the structure, which is sometimes unfavorable to transparent LLCs.

Concrete risks

Tax requalification

The main risk is business requalification by the tax authorities in the executive's country of residence.

This can happen when the LLC is perceived as a screen structure, with no real autonomy.

Permanent establishment

If the activity is considered to be carried out on a regular basis from another country (office, management, decision-making, prospecting), a permanent establishment can be characterized, resulting in local taxation.

Double taxation

A poor link between :

• American tax system,

• taxation in the country of residence,

• and applicable tax treaties,

can lead to double taxation, sometimes difficult to correct after the fact.

Sanctions and penalties

Failure to comply with reporting obligations (in the U.S. or elsewhere) may result in :

• financial penalties,

• adjustments,

• interest for late payment,

• bank or administrative blockages.

These risks arise mainly from incomplete analysis or a scheme that is ill-suited to the actual context.

When this option might make sense

A U.S. LLC may be considered, subject to conditions, when:

• business is truly geared towards the American or international market,

• the structuring is consistent with the manager's tax residence,

• management, flows and governance are clearly defined,

• reporting obligations are anticipated and met,

• the objective is operational (commercial, contractual, organizational) and not just fiscal.

It then becomes part of a structured overall framework, rather than an isolated solution.

When it is not

This structure is generally unsuitable when :

• the business is run entirely from another country, with no substance in the United States,

• the main objective is to artificially reduce the tax burden,

• the manager ignores or underestimates reporting obligations,

• personal situation (tax residence, social status) is unstable or poorly defined,

• the structure is used without understanding the applicable tax treaties.

In such cases, the legal and tax risks often outweigh the expected benefits.

The role of WizeCounsel support

WizeCounsel is involved in a analysis and framing logic.

The role involves :

• explain the applicable legal and tax framework,

• identify points of consistency and inconsistency,

• highlight potential risks and limitations,

• help understand the short- and medium-term implications.

The intervention remains informative and structuring.

It does not constitute personalized legal advice, nor a promise of optimization, nor an incitement to a specific scheme.