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LLC Formation for Digital Nomads; Your Guide to Company Formation in the US
Read this article to find out the benefits of forming an LLC, and the easiest way to do it remotely.
What’s an LLC?
LLC stands for Limited Liability Company. It’s the ideal company structure for digital nomads because it has the best of both worlds. Liability protection and flexibility.
What is Liability Protection?
Limited liability means that, in case your business gets in financial trouble, your personal assets will be protected. And, in case you get into financial troubles, your business will be protected. Why? Because the moment you incorporate, is the moment you and your business are treated separately.
You might think that you’ll never get into financial troubles because you don’t have loans or suppliers. But all it takes is one lawsuit from a client. One mistake on your side can have detrimental consequences.
You don’t want to ruin both your personal and your business finances at the same time.
What Flexibility Does an LLC Provide?
Unlike a Corporation, an LLC is easy to run. There isn’t a lot of paperwork. You can easily implement changes in the structure. Filing your taxes is straightforward.
Are You a Digital Nomad?
What does it mean to really be a digital nomad? If you’re location independent because you run your business 100% remotely, and you take advantage of this by changing your location whenever you want; then you’re a digital nomad.
The term officially refers to someone who is always on the move and works online. But it’s commonly used to describe anyone who is working remotely, whether they travel a lot or not.
Why Digital Nomads Avoid Incorporating?
Most digital nomads don’t like paperwork, structures, and commitments. That’s why they work the way they work. They value freedom.
Incorporating a business might sound rigid and bureaucratic to you. You’re not alone. It scares a lot of nomads and digital entrepreneurs. But there’s a lot less paperwork involved than you think, and it’s a great business move.
You can set up your LLC in 10 minutes. You can do this 100% remotely with a specialist service like businessanywhere.io
Why You Should Incorporate an LLC
Apart from limited liability, an LLC has more benefits.
Business Bank Account
With a business bank account you can separate your finances from your personal finances, making it easier to file tax returns. It’ll also separate your personal finances from your business, again, protecting your assets.
If you incorporate in the US, you can open a US business bank account. This will make it easier for you to take payments from US clients, without paying fees.
Credit Building for Your Business
When you incorporate an LLC, open a bank account, use a business credit card, you’ll build credit for your business. If you ever want to expand in the future, get financing, a loan, or work with a big supplier, then you’ll need good credit rating.
The good thing is that your personal credit score will be separate from your business’. So, again, you’re protected.
Having a business bank account, and a registered LLC means you come across as more professional. Your company name will be on the checks you write, your official correspondence, and so on.
How to Incorporate an LLC Remotely
You can incorporate your LLC in minutes. All you have to do is fill out an online form, and our business registration service will take care of the rest.
Why You Should Incorporate in the USA
When you incorporate in the US, you’ll choose which state you’d like to incorporate in. Each state has its own rules and regulations. Tax rates, privacy laws, and business conditions vary from state to state.
Some states, for example, charge no income tax. This is a huge benefit.
What to Do After Incorporating
After you incorporate your LLC, there are a few things you should do.
- Register with the IRS; read our guide for non-resident aliens here.
- Open a bank account.
- Register for a virtual mailbox.
An LLC is the best option for digital nomads. We recommend incorporating in the USA, even for non-resident aliens, because some of the states in the US provide huge benefits like no income tax.