Have you ever wanted to own a part of the American dream, but you sit at home in Pakistan? To expand one’s business in America, it is worthwhile to set up a US Limited Liability Company (LLC).
Then, do not be scared when you hear about the requirements of US business laws. The process of doing so from Pakistan will be outlined and explained systematically in the subsequent sections.
That is what you’re considering? You are about to learn to form a US LLC from Pakistan for any kind of business development professional, businessman, or even investment Google seeker.
Why Form a US LLC?
Limited Liability: One of the notable benefits of forming an LLC is the risk shielding of the person’s properties. As far as you are in a limited liability company, your private property is, in most instances, protected against the business’s debts which could be a relief to you.
Tax Flexibility: As per US laws, US LLCs can choose to be taxed as sole proprietors, partnerships, or corporations. This is more of a benefit aimed at improving your particular tax position given your circumstances and level of income.
Credibility and Trust: Incorporating a US LLC can help improve your business’s credibility and trust not only in the domestic but also in the international markets. It’s a sign to prospective clients, partners, and investors that one’s business is real and conducted within the US’s business environment.
Access to US Markets: A US LLC acts as a bridge to the reasonably sized and fast-changing US market that allows one to address different customers and do more new businesses than previously possible.
Investment Opportunities: A US LLC will appeal to domestic and foreign investors seeking investment opportunities. It allows for prospects of security and growth as well as decent returns.
Step 1: Choose a US State for Your LLC
Research State Laws and Taxes: Each of the states has its laws as well as filing fees and taxes related to LLC which then make every state different and unique. States such as Delaware, Nevada, and Wyoming are well known even to overseas entrepreneurs who are looking for business compliance relaxation and low costs with an economical tax system.
Business Need: In case you intend to have or expand your business into a certain state, then you should create your LLC in that state to comply with local compliance and licensing laws.
Step 2: Name Your LLC In an Often Overlooked Way
Unique and Compliant Name: Each LLC must be named individually and must satisfy the legal naming requirements of the state. The name needs to have the words “Limited Liability Company” or its short forms like “LLC” or “L.L.C:” which indicates the nature of the business structure.
Check Availability: For the respective State of matter where you wish to register the name, check the national database maintained by the Secretary of State to see if the name you wish to use is not used by another entity.
Step 3: Hire a Registered Agent
Registered Agent Requirement: A registered agent is an individual or business entity chosen to handle significant legal and tax correspondence for your LLC, which they are required to acknowledge and formally address with the IRS and any other state authorities as required. The agent must possess a street address in the state you created the Limited Liability Company and be present within the defined business hours.
Professional Services: For those who do not have an evident defined geographic location in the US, but wish to have their documents processed in the country, it is advisable to general a registered agent service that would facilitate this process.
Step 4: Articles of Organization describing the LLC are filed
Prepare Necessary Documents: The preparation of Articles of Organization is important as it provides a legal foundation for the establishment of the LLC in the state that has been selected. In general, it contains the name of the LLC, the name and address of the registered agent, and the purpose of the business.
Submit to State: Once filled, the Articles of Organization should be submitted to the Secretary of State of the chosen state. Most states have an online filing with a fee, the amount of which depends on the state.
Step 5: Operating Agreement of the owner(s)
Management Structure: An Operating Agreement clearly defines the structure of the management and the working procedures of the governing body of the organization. It is not a compulsory legal requirement in most states but it is beneficial in outlining the member and manager wines.
Include Key Details: The governing members’ agreement should touch upon the division of responsibilities of the members as to management or attending meetings, voting, profit allocation, management forms and changes, management disputes, and others.
Step 6: Obtain an EIN
Federal Employer Identification Number (EIN): This number is important for tax return purposes, opening a bank account in the business’s name, and employees. The EIN serves as the pinpoint for this LLC for all things tax-related in the official register of the federal IRS.
Apply Online: Foreign countries can apply for an EIN using Form SS-4 on the IRS’s website. This is done by most businesses over the Internet which makes it convenient for foreign business persons.
Step 7: Open a US Business Bank Account
Banking Requirements: Among the business accounts that a person should have is a US business checking account. This will enable that person to keep his personal and business finances separate which is very useful in accounting. Most of the banks require that you travel to the US to open an account hence be prepared.
Prepare Documentation: When visiting banks for account opening, please ensure you have all the documents like EIN, Articles of Organization, etc in place.
Step 8: Understand Tax Obligations
Federal and State Taxes: There are federal taxes and state taxes that a person planning to incorporate an LLC in the USA should be aware of. The international business context demands that you seek advice from a tax advisor who is well-versed in such a context.
Filing Requirements: Make sure that you understand the yearly filings that are required regarding both federal and state corporate taxes so that you do not incur any penalties. This also includes understanding the lag period before the submission due date and the specific forms to be completed.
Conclusion
Forming a US LLC from Pakistan has some essential steps. This includes selecting the state, naming your LLC, and ensuring its legal and financial credentials. By considering these factors, as well as getting in touch with professionals when necessary, one can, without a doubt, form and run a US LLC.
If you are prepared to progress, Book a free consultation today and learn more about forming an LLC until you are fully satisfied.
Frequently Asked Questions (FAQs)
Can a Pakistani citizen form a US LLC?
If there are citizenship and residency requirements for forming a US LLC, they don’t apply to non-American residents, including Pakistanis. They can register an LLC in the USA without restrictions.
How do I handle taxes for a US LLC as a Pakistani citizen?
As regards taxation, a U. S. LLC is taxed on a pass-through basis, which means the profit is reported on the tax returns of the owners. But tax liabilities, as will always be the case, have more to them, and therefore it is better to consult with a tax expert.
Is it possible for a US LLC to have a bank account, and if so, how do I open one while in Pakistan?
A US LLC can have a bank account, but opening it may entail traveling to the US or using any online banking services for foreigners which can be difficult when there is none.
What is the compliance management expected from you in connection to the operation of a US Limited Liability Company?
Compliance demands differ from state to state though most often it include an annual report submission, annual state fees, and keeping up with the state through timely filings.
Nabin Adhikari
