US Company Formation from the UK (2026): LLC or Corporation, How HMRC Sees a US LLC, the US–UK Treaty, Costs and Banking for British Founders
Forming a US company from the UK: why HMRC usually treats a US LLC as opaque, LLC or C-Corp, the US–UK treaty, UK subsidiary rules, costs and banking.
The USA is the natural second market for British businesses: the same language, the largest customer base in the world, and procurement teams that prefer to contract with a US entity. British founders, from solo consultants in Manchester to SaaS companies in London and e-commerce brands across the country, form US companies to sell, hire, raise money and get paid in dollars.
The US side is straightforward and fully remote. The UK side needs more thought than many US formation websites suggest, because HMRC generally treats a US LLC as a company, while the IRS treats a single-member LLC as transparent. That mismatch drives most of the structuring decisions for UK residents. This guide explains them.
Short answer: a UK resident can own 100% of a US corporation or LLC, formed remotely, and a UK limited company 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–UK treaty limits US tax on business profits to profits attributable to a US permanent establishment and generally reduces dividend withholding to 15% for individuals. HMRC generally treats a US LLC as opaque, like a company, despite the Supreme Court's decision in *Anson*, so a UK-resident owner of an LLC can face double taxation. That is why many UK founders use a C-Corporation for a trading business, or have their UK company own the US company. Take UK advice before choosing an LLC.
Can a resident of the UK own a US company?
Yes. US states place no restriction on the nationality or residence of owners. UK citizens and UK residents of any nationality 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 the UK 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 the UK
The US–UK tax treaty
The UK has an income tax treaty with the USA. Dividends from a US corporation to a resident of the UK 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 the UK | 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 the UK, 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 UK side
Points to settle with your UK accountant:
- How HMRC sees a US LLC. HMRC's long-standing view is that US LLCs are generally opaque, like companies. In *Anson*, the Supreme Court held that a UK member was entitled to double tax relief on his share of an LLC's profits on the facts of that case, but HMRC has said it will continue to treat US LLCs as opaque in general. The result can be US tax treated as the member's while UK tax treats the income as the company's, and relief can be lost.
- Owned personally or by your UK company? If the US business is part of your existing UK business, owning it through the UK company is often tidier; the US company is then a subsidiary, with transfer pricing between the two and the UK's CFC rules to consider. A new venture can be owned personally, but think about UK tax on dividends when profits come home.
- Where the company is managed. A US company that is centrally managed and controlled from the UK can, in some circumstances, be treated as UK tax resident.
- UK reporting of the US income or dividends on your Self Assessment return.
We handle the US side; your UK accountant confirms the UK 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 national ID card), clear colour scan |
| Proof of address | A recent UK utility bill, council tax 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 the UK 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 UK subsidiary. A Bristol software company with US customers forms a Delaware corporation owned by the UK company. The US company signs US contracts and employs a US sales manager; it pays US tax on its own profits, and the UK company's accountant documents the transfer pricing.
Example 2: the solo consultant. A London consultant with US clients asks for a Wyoming LLC. Their accountant points out that HMRC would treat the LLC as a company, so they compare an LLC with a Wyoming corporation and with simply invoicing from their UK company before deciding.
Example 3: the startup raising in the USA. Founders in Edinburgh raising a US seed round form a Delaware C-Corporation, assign their IP to it and file 83(b) elections where shares vest.
Common mistakes
- Assuming a US LLC is transparent in the UK as it is in the USA.
- Owning a US company personally when it is really part of the UK business, and not documenting transfer pricing.
- Running the US company entirely from the UK without considering UK company residence.
- 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
Should a UK founder use an LLC or a corporation? For a trading business, often a corporation, because HMRC generally treats an LLC as a company anyway. An LLC can work for a small business after UK advice.
Can my UK limited company own the US company? Yes. It becomes a US subsidiary; your UK accountant handles transfer pricing and CFC points.
Can I form a US company from the UK 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 the UK
We form US LLCs and corporations for residents of the UK 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 UK tax adviser, who confirms the UK 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 the UK 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.
