Texas LLC for Non-Residents: Is the Lone Star State Right for You?
Texas offers a massive market and no personal income tax. Real costs, how the franchise tax works, sales tax, and when non-residents should form a Texas LLC instead of Wyoming.
Texas is the second-largest state economy in the USA, with major business hubs in Houston, Dallas–Fort Worth, Austin and San Antonio. For founders who want to sell to American customers at scale, or who plan a physical presence in the USA, it is a serious option.
Why Texas?
- No personal income tax.
- A huge market: energy, technology, logistics, healthcare, manufacturing and retail.
- Business-friendly regulation and a fast-growing startup scene in Austin.
- Central location for distribution across the USA, with major ports and airports.
- Strong links with Mexico and Latin America.
Costs
| Item | Approximate cost |
|---|---|
| State filing fee | $300 |
| Registered agent (year 1) | $50 with UCB |
| Our formation + EIN service | $99 |
| First-year total with UCB | $449 |
| Annual franchise tax report | Usually no tax due for smaller businesses (see below) |
| Public information report | Filed with the franchise tax report |
The Texas franchise tax
Instead of a corporate income tax, Texas has a franchise tax (often called the "margin tax") that applies to most LLCs and corporations, including LLCs owned by non-residents.
- Businesses with annualised revenue below the no-tax-due threshold (about $2.47 million) owe no franchise tax.
- They must still file the annual report, together with a public information report listing managers or officers.
- The report is due May 15 each year.
- Missing it leads to penalties and, eventually, forfeiture of the company's right to do business.
So for most small foreign-owned LLCs, the Texas franchise tax is a filing obligation, not a payment. See annual requirements for a foreign-owned LLC.
Sales tax
Texas has a state sales tax plus local taxes. If you sell taxable goods or certain services to Texas customers, or hold inventory in Texas, you may need to register and collect. See US sales tax for online sellers.
Federal tax
Same as any state: a foreign-owned single-member LLC files Form 5472 every year. See Form 5472 explained.
When Texas makes sense
- You will have an office, warehouse or staff in Texas.
- You sell physical goods with Texas logistics or cross-border trade with Mexico.
- You are building a business in energy, logistics or manufacturing.
- You plan to relocate to Texas.
When another state is better
If your business is run online from abroad, with no Texas presence, a Wyoming LLC costs much less to form ($249 vs $449) and has a simpler annual report. See Wyoming LLC for non-residents and which state should a non-resident choose.
| Texas LLC | Wyoming LLC | |
|---|---|---|
| First-year total with UCB | $449 | $249 |
| Annual filing | Franchise tax report + public information report | Annual report, from $60 |
| Franchise/margin tax | Only above the revenue threshold | None |
| Personal income tax | None | None |
Privacy
The Texas public information report lists the company's managers or officers, so names appear in public records.
Banking
A Texas LLC can open a US business bank account remotely once it has its EIN. See the US business bank account guide.
How UCB helps
We form Texas LLCs for non-residents, provide the registered agent, obtain the EIN, open your bank account and remind you of the May franchise tax report. See the Texas company formation page.
Thinking about Texas? WhatsApp us at +91 8105 199 399 or email info@ucbsolutions.com. Texas LLC + EIN: $449 all-in.
Let our experts handle it for you
Every business is different. Message us with your country, business type and goals, and we will recommend the right structure, state and package. We do the work; you focus on your business.
This article is general information for non-resident business owners and is not legal or tax advice. Rules and fees change; contact us to confirm what applies to your situation.
