US Company Formation from Germany (2026): GmbH-Style Classification of a US LLC, C-Corp or LLC, the US–Germany Treaty, Costs and Banking
Forming a US company from Germany: how Germany classifies a US LLC, place of management, CFC rules, the US–Germany treaty, costs and banking.
German founders, Mittelstand companies and freelancers have long looked to the USA, the largest export market for many German businesses. A US company lets them sign US contracts, hire in the USA, sell through US platforms and raise from US investors, and it can be formed from Germany without travelling.
What surprises many German founders is how differently the two countries can see the same company. Germany does not follow the US "check-the-box" choice: it classifies a US LLC by comparing it with German legal forms, and the answer can be a corporation even when the IRS treats the LLC as transparent. This guide explains what that means and how to choose.
Short answer: a resident of Germany can own 100% of a US corporation or LLC, formed remotely, and a GmbH can own a US subsidiary. With UCB, a Delaware corporation with EIN is $308 all-in, and a Wyoming LLC with EIN is $249. The US–Germany treaty taxes business profits in the USA only through a US permanent establishment and generally limits dividend withholding to 15% for individuals. Germany classifies a US LLC by comparison with German forms (the *Typenvergleich*), so an LLC the IRS ignores can be a corporation for German tax, and a US company managed from Germany can become taxable in Germany. Germany's CFC rules can also reach low-taxed passive income. Agree the structure with a German Steuerberater before forming.
Can a resident of Germany own a US company?
Yes. US states place no restriction on the nationality or residence of owners. German citizens and residents of Germany can own 100% of a US LLC or corporation, be its only manager or director, and form it entirely remotely, with no US visa, Social Security number or US address. Every US company needs a registered agent in its state, included for the first year in every UCB formation. See registered agent explained.
Why founders in Germany form a US company
- The US market: the largest consumer and business market in the world, with buyers who often prefer a US vendor.
- US investors, who invest in Delaware corporations. See raising US investment as a foreign founder.
- A US entity for US contracts, staff and liability, separating the US business from the home company. See US subsidiary for a foreign company.
- Payments in dollars, through a US bank account and US payment platforms. See Stripe for non-residents.
The tax picture for residents of Germany
The US–Germany tax treaty
Germany has an income tax treaty with the USA. Dividends from a US corporation to a resident of Germany can be withheld at a reduced treaty rate, generally 15% for an individual shareholder, instead of the standard 30%, if the owner gives the payer a valid W-8BEN claiming the treaty. The treaty also says business profits are taxable in the USA only through a permanent establishment there. See W-8BEN-E vs W-8BEN explained.
On the US side: LLC or corporation?
| US LLC (single-member) | US C-Corporation | |
|---|---|---|
| US federal tax if all work is done from Germany | Usually none | 21% of profits |
| US tax when profits are paid to the owner | None (not a dividend) | Treaty rate, generally 15% for an individual owner |
| Yearly federal filing | Form 5472 + pro forma 1120 | Form 1120 + Form 5472 |
| Investors | Most will not invest | Standard (Delaware) |
A single-member US LLC owned by a non-resident is ignored for US income tax. If you do all the work from Germany, with no US office, employees or dependent agents, the income is usually not effectively connected with a US trade or business, and no US federal income tax is due. The LLC still files Form 5472 with a pro forma Form 1120 every year, and missing it costs $25,000. A C-Corporation pays 21% on its profits wherever its people work, which suits startups raising US investment and businesses reinvesting in the USA. See effectively connected income explained, Form 5472 explained and LLC vs Inc for non-residents.
For a European resident, the US view is only half the picture. Your home country may classify a US LLC as a company even though the IRS ignores it, a US company managed from your country may be treated as tax resident there, and controlled foreign company rules can tax low-taxed profits at home. That is why many European founders choose a C-Corporation for a trading business, and use an LLC only after a local adviser has confirmed how it will be treated.
The German side
Points for your German Steuerberater:
- Classification of the LLC. German tax law does not follow the US election. It compares the LLC's features, such as management, liability, transferability of interests, profit distribution and duration, with German corporations and partnerships. Depending on the operating agreement, an LLC can be treated as a corporation (taxed at company level) or as a partnership (income attributed to members), and German courts have treated LLCs as corporations even where the US treated them as partnerships.
- Place of management. A company whose management is in Germany is subject to German corporate tax and trade tax, wherever it was formed. A US company run entirely by a founder sitting in Germany needs careful thought.
- CFC rules (*Hinzurechnungsbesteuerung*) can attribute low-taxed passive income of a foreign company controlled by German residents.
- A GmbH that owns the US company needs transfer pricing between the two.
We handle the US side; your Steuerberater confirms the German side.
US sales tax is not VAT: there is no national system and no input tax recovery, and each state sets its own rules. A European brand selling goods into the USA should plan for state sales tax separately; it is not a service we provide, but we refer you to a specialist. See state taxes for a foreign-owned LLC.
Which US state?
- Wyoming: the usual choice for freelancers, agencies and online businesses run from abroad, with low yearly costs and owners' names kept off the formation filing. See Wyoming LLC for non-residents.
- New Mexico: no annual report at all. See New Mexico LLC for non-residents.
- Delaware: for a corporation that will raise from US investors. See Delaware LLC for non-residents.
- Florida, Texas or New York: when the business will have an office, warehouse, staff or property there. See Florida, Texas and New York.
Try our state selector or read best state for non-residents.
What it costs
| With UCB | |
|---|---|
| Wyoming LLC with EIN, all-in | $249 |
| Wyoming LLC with EIN and US bank account application | $348 |
| Delaware corporation with EIN, all-in | $308 |
| Keeping a Wyoming LLC active each year | $121 |
| Keeping it active plus the yearly federal return | $421 |
| US business address add-on (own suite number) | $60 a year |
State fees and the first-year registered agent are included in our formation prices, with nothing added for the state. See what a US LLC costs every year and the cost calculator.
Documents you need
| Document | Notes |
|---|---|
| Passport or national ID card | Valid passport (or German Personalausweis), clear colour scan |
| Proof of address | A recent Meldebescheinigung, utility bill or bank statement |
| Company name and business description | Two or three names; a specific description of what the company does |
| Share structure (corporation) | Number of shares and par value; we suggest a structure that keeps Delaware franchise tax at the minimum |
| Home company documents | Only if your company at home will own the US company: register extract and ownership |
No SSN, ITIN or US address is needed to form the company or obtain its EIN. See EIN for non-residents.
Banking and payments
Residents of Germany are generally well served by US banks and fintechs that accept remote applications, and European identity documents are widely accepted. What still matters: a specific business description, a working website, consistent details across the state record, EIN letter and application, and a US business address with your own suite number rather than the registered agent's address.
See US business bank accounts for non-residents, why banks reject non-resident applications and Stripe for non-residents.
Worked examples
These are illustrative examples, not client cases.
Example 1: the GmbH's US arm. A Munich engineering GmbH forms a Delaware corporation to employ a US service team and sign contracts with US manufacturers. The US company pays US tax on its own profits; the GmbH documents transfer pricing.
Example 2: the freelancer's LLC question. A Berlin developer wants a Wyoming LLC for US clients. Their Steuerberater reviews the operating agreement under the German comparison test and the place of management, and concludes that invoicing from Germany or a corporation is simpler for their case.
Example 3: the startup. Founders in Hamburg raising from US investors form a Delaware C-Corporation that will own their German GmbH, with lawyers in both countries handling the structure.
Common mistakes
- Assuming German tax follows the US check-the-box election.
- Running a US company entirely from Germany without considering German place-of-management rules.
- Ignoring German CFC rules for a company with passive income.
- Ignoring Form 5472 because the LLC owes no US tax.
- Using the registered agent's address as the business address on bank applications.
Frequently asked questions
Is a US LLC a corporation or a partnership in Germany? It depends on its features, compared with German forms. The US election does not decide it. Your Steuerberater should review the operating agreement.
Can my GmbH own the US company? Yes. The US company becomes a subsidiary; transfer pricing between them must be documented.
Can I form a US company from Germany without visiting the USA? Yes. Formation, the EIN and bank applications are all done remotely. See open a US company without visiting.
Do I need an ITIN? Usually not for a single-member LLC or its EIN. See what is an ITIN and who needs one.
How UCB helps founders in Germany
We form US LLCs and corporations for residents of Germany remotely, all-in: a Wyoming LLC with EIN is $249, and our formation, EIN and bank account package is $348. Each year we keep the company active and file its federal return through our US tax filing service, working alongside your German tax adviser, who confirms the German side. If an LLC or a corporation clearly suits your plans better, we will tell you which and why. See also forming a US company from abroad: country guide.
Expanding from Germany to the USA? WhatsApp us at +91 8105 199 399 or email enquiries@ucbsolutions.com, and we will recommend the right structure and state for you.
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.
