For entrepreneurs and business owners in the Philippines, establishing a U.S.-based Limited Liability Company (LLC) opportunity brings access to global markets, international funding, and increased business and credibility.
This is largely due to the U.S. appeal as a destination for international businesses seeking to enter foreign markets considering that it has investor-friendly policies and a strong economy.
This particular guide assists in focusing on how to set up an LLC from the Philippines including legal aspects, tax aspects, and practical advice that will guarantee an organized and efficient process.
Why Form an LLC in the U.S. as a Filipino Entrepreneur?
According to statistics provided by the World Bank Doing business indicators, the US ranks among the top countries in terms of ease of business registration, this can be attributed to certain factors that the U.S. granted citizens, one of the more noticeable ones is immigrants from the Philippines immediately becoming a U.S resident in the matter of few hours.
Here are some of the primary reasons who are more and more American citizens are emigrating from the Philippines to the U.S. to create LLCs;
1. Global Market Access
- LLCs which are registered in the U.S. make it possible for business owners and their employees to branch out to foreign nations where they can partner and attract customers.
- This creates a business identity for those who are venturing into foreign markets, especially in competitive areas such as technology, e-commerce, or consultancy services.
2. Limited Liability Protection
- Starting An LLC offers limited liability, which separates an individual’s assets from the business’s risks.
- Assets, houses, and savings are crucial for business owners and should be sought after and protected from loss to legal issues or loans taken up to expand the company.
3. Flexible Tax Benefits
- Pass-through taxation is incorporated in LLCs which makes taxation less complex as taxes are filed only once on income earned.
- Tax obligations for non-resident LLC owners may also be quite low due to the judgment of other criteria related to the particular controlled trade activities.
4. Enhanced Credibility
- A company with incorporation in the United States tells the clients and investors of professionalism and growth more assurance.
- It gives an advantage to companies when they apply for tenders or joint ventures.
5. Financial Opportunities
- Boasts of enabling clients to set up a U. S LLC which enables them to set up a US bank account for ease of doing business with international clients.
- This enables access to Stripe, PayPal, Square, and many other payment platforms that cannot be used without a business entity in the United States.
Step-by-Step Guide to Forming an LLC from the Philippines
These steps are the basic requirements that should allow you to open your LLC business in the US without many problems.
Step 1: Choose the Best State for Your LLC
In deciding to incorporate or register your LLC, it is important to recognize the state in which you are incorporated since every state has different regulations and fees specific to that jurisdiction.
Delaware
- This is one of the states that is well known for its progressive laws, good formation network, and legal courts.
- Offers flexibility for businesses that plan to attract investors or scale internationally.
Wyoming
- This has reasonably low registration charges, no taxes, and private and high levels of secrecy protection.
- Best option for quick straightforward structure and low cost for entrepreneurs.
Nevada
- Doesn’t charge any corporate income tax, adheres to strong asset protection laws, and maintains confidentiality for business owners.
- It is common for companies in high-risk sectors to register in this state.
Considerations when selecting a US State
- The outlay for creating the company and for its maintenance on an annual basis.
- Taxes for foreign shareholders.
- Laws and Regulations that facilitate the business and other legal aspects that may arise.
Step 2: Decide on a Business Name
Remember that an LLC name is not just a name, it is one of the most critical components of branding and compliance.
Naming Rules
- The name of the building must include one of the phrases “LLC,” “L.L.C.”, or the “Limited Liability Company” phrase.
- The name should not be the same or too similar to any other company registered in the state.
- Only use restricted words with proper licenses, or do not use them at all, such as “Bank,” “Insurance,” or “University.”
How to check that the desired name is available
- Using state registrars’ resources, search the business name you want to use to see if it has already been registered by someone.
- If your state permits you, apply to retain the name, preventing other business organizations company from registering it until you complete the requisite documents.
Step 3: Appoint a Registered Agent
Every LLC in the United States is required to have a registered agent. Each Limited Liability Company designates this individual or service as its official contact for legal notices and other communications from government agencies.
Registered Agent’s Requirements
- The agent must have an address within the state where the LLC is recorded.
- The agent has full-time availability.
Options for Filipino Entrepreneurs
Professional Registered Agent Services
- Upon retainers, they assist in ensuring businesses and companies adhere to the laws of the state.
- International entrepreneurs can count on EasyFiling, which offers reliable and reasonably priced services.
U.S.-Based Contact
- A family member or a friend who is already in the United States can be a suitable agent as long as they fulfill the state regulations.
Step 4: File the Articles of Organization
Filing Articles of Organization by State is the legal document used to register an LLC in the USA, it is a legal document that indicates that your business has been formed and has active legal status.
Information Typically Required
- Business address and name of the LLC.
- Name of the registered agent.
- What the business will do in general, or specific scope as per state instructions.
- How does the business intend to be managed or Is managed by its members or a hired manager?
How to File
- Online Filing: Some states have websites where selected forms can be filled and submitted.
- Filing By Mail: Submit documents to the company’s address in the relevant state.
Cost
- The fees for the different states’ filling rates fall between $50 and $500.
Step 5: Obtain an EIN (Employer Identification Number)
An EIN is a requirement for every United States corporation, it is what the IRS issues and needs to be used to file taxes, employ other persons, and even set up business dollar accounts.
How to Apply
- You can apply on the IRS site, it’s a short process and quick, plus it doesn’t require you to pay.
- If applying via mail or fax, you would need to fill out and submit Form SS-4.
- EasyFiling is one of those filing services that we commonly recommend.
Step 6: Open a U.S. Business Bank Account
To take care of the business’s finances, to receive payments, and for legal compliance, it is essential to have a US bank account.
Requirements
- Operating Agreement.
- Confirmation letter from the IRS assigning the employee identification number.
- Government-issued identification (passport for foreigners).
What Banks To Use
- American Banks: Go for Chase, Wells Fargo, or Bank of America.
- Foreign Banks: Mercury or Brex are available for foreigners.
Step 7: Create an Operating Agreement
In most states, this is not required, however, it is a valid course of action. States that do so specify ownership, roles, and procedures for making decisions.
Why It’s Important
- Avoids disagreements between members.
- Defines mode of operation.
- Acts as a boost to investors or partners during negotiation.
Step 8: Maintain Compliance
All business activities must be performed according to rules and regulations, state or federal. This is vital to the health and continuity of your LLC.
Ongoing Requirements
- Submitting an annual report or a bi-annual one to the appropriate department.
- After that, remitting necessary state taxes and renewing fees.
- Have a registered agent who is functioning.
Conclusion
The establishment of an LLC in the US from the Philippines can be the turning point for business development and global expansion. With the right planning and professionals at hand, one can go through the procedure without any hassles and open doors to the largest market in the world.
Ready to Start?
Start your journey of global reach today. Register yourself on easyfiling.us to get special assistance in LLC formation, registered agent services, and compliance-related issues for the first time entering the market entrepreneurs.
Book a free consultation today with Easyfiling to form your LLC from the Philippines.
Frequently Asked Questions (FAQs)
Is it possible to create an LLC while never having visited the US?
Yes, there is no need for a visit as the work can be done using online filing systems and professional service providers.
What is the estimated cost of forming an LLC?
Expenses encompass state filing fees (50-500 dollars), the cost of a registered agent service, and other related services.
What is the length of time required to form an LLC?
Every state has different time frames but in general, it is about several days to several weeks.
Nabin Adhikari
