If you’re a non-U.S. resident planning to start a business in the United States, one of the first and most important decisions you’ll face is: Should I form an LLC or a C-Corp? The choice between a Limited Liability Company (LLC) and a C Corporation (C-Corp) will affect your taxes, ownership structure, compliance obligations, and long-term scalability. In this article, we’ll break down the differences, pros and cons, and legal requirements for non-residents choosing between an LLC and C-Corp in 2025. You’ll also find official government sources to support your decision.
Forming an LLC is often the preferred route for non-resident solo founders or small teams. LLCs are flexible, easier to manage, and typically have fewer annual reporting requirements. They also provide pass-through taxation, which means business profits are reported on the owner’s personal tax return. But for non-residents, this model gets complicated—because most non-U.S. residents cannot file a personal U.S. tax return without an ITIN, and many don’t want to. That’s why a single-member LLC owned by a foreigner is considered a disregarded entity, and is required to file Form 5472 + 1120 with the IRS each year, even if it makes no income.
A C-Corp, on the other hand, is a completely separate legal entity. It pays corporate taxes on its income and owners pay taxes again if they take dividends. While this double taxation may sound like a disadvantage, for many non-resident founders who plan to reinvest profits or raise venture capital, a C-Corp is the better long-term choice. U.S. investors overwhelmingly prefer the C-Corp structure, especially when incorporated in Delaware. It offers unlimited shareholders, different share classes, and easier transfer of ownership.
Let’s compare the two:
LLC for non-residents
- Easy to set up and manage
- Pass-through taxation
- Must file Form 5472 + 1120
- Can’t raise VC easily
- May require ITIN for some filings
- Works well for freelancers, small online businesses, agencies
C-Corp for non-residents
- Separate taxable entity
- Double taxation applies
- Preferred for raising investment
- No ITIN required for ownership
- Requires more formalities (board meetings, bylaws)
- Ideal for startups planning to scale
To open a U.S. business as a non-resident, you do not need a Social Security Number (SSN) or a visa. You can form an LLC or C-Corp remotely, get an EIN, and open a business bank account through services like LegalFlow, which guides international founders through every step. The IRS accepts EIN applications from foreigners via Form SS-4, even without SSN or ITIN.
🔗 IRS – EIN Application Instructions (Form SS-4)
🔗 IRS – Form 5472 Filing Instructions for Foreign-Owned LLCs
🔗 IRS – U.S. Business Structures Overview
Another key factor to consider is taxation. An LLC may simplify operations at first, but you might be required to file Form 1040-NR if your structure triggers U.S. sourced income taxation. A C-Corp avoids this by treating you as a shareholder, not a pass-through owner, which keeps your personal tax obligations outside the U.S. (unless you receive dividends).
Non-residents should also consider state selection. Wyoming and Delaware are top choices. Wyoming offers privacy and low fees, while Delaware is favored by investors and lawyers for its corporate law infrastructure. Both allow non-residents to form companies without living in the U.S.
In 2025, trends show a rise in international founders launching remote-first startups and e-commerce ventures based in the U.S. Choosing the right entity from day one saves you thousands of dollars in legal and tax fees. If your goal is long-term growth, raising capital, or building a U.S.-based tech company, a Delaware C-Corp may be your best bet. If you want simplicity, control, and lower ongoing costs, a Wyoming LLC might be the better option.
In conclusion, there’s no one-size-fits-all answer. The right structure depends on your goals, business model, and risk tolerance. Both LLCs and C-Corps are 100% legal and accessible to foreigners, and both can be formed remotely with the right guidance. LegalFlow helps non-residents form either entity, obtain an EIN without SSN or ITIN, set up compliant business banking, and file the necessary IRS forms every year. Whether you choose an LLC or a C-Corp, starting your U.S. business is easier than you think.
Let LegalFlow help you launch, grow, and scale—on your terms, from anywhere.