Forming an LLC—International Founders

US individuals that form an LLC probably do not give a lot of thought to opening a bank account for their new business, however for foreign individuals forming an LLC the process is not that straight-forward. First, the LLC must obtain an Employer Identification Number (EIN), but must do so without the required “responsible party” who must make the application. Second, the individuals will need to personally appear at the bank to open the account, which could require a special visit to the US.

To receive an EIN, the applicant needs to file the IRS’s Form SS-4 and indicate a “responsible party” (i.e. a Member of the LLC) with a Social Security Number (SSN). This can be done online in a matter of minutes if the LLC has a responsible party with an SSN, however if the only responsible parties are foreign individuals, and thus without SSN’s, the foreign individuals must go through a few extra steps. First, they should find a lawyer to act as the Company’s third-party designee. The third-party designee would then prepare Form SS-4 and Form 8821, which needs to be signed by the Company’s president, and then fax the documents to the IRS at 1 (859) 669-5760. The designee should receive an EIN about a week later.

Once the LLC has been assigned an EIN, the foreign individuals must then physically appear at the bank to open an account. This is a consequence of recent “know your customer” procedures introduced to manage risks and guard against identity theft. Foreign individuals may be able to avoid the obligation to appear in the US if the bank has an international branch in the foreign country.

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Roger Royse
rroyse@rroyselaw.com

Roger Royse, the founder of the Royse Law Firm, works with companies ranging from newly formed tech startups to publicly traded multinationals in a variety of industries. Roger regularly advises on complex tax structuring, high stakes business negotiations and large international financial transactions. Practicing business and tax law since 1984, Roger’s background includes work with prominent San Francisco Bay area law firms, as well as Milbank, Tweed, Hadley and McCloy in New York City. Read My Full Bio

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