If you live in Germany and want to expand your business into the United States, forming a US LLC can be a smart move. This guide explains, step by step, how to open an LLC from Germany, how the income is taxed under German law, and what you should be careful about to stay compliant on both sides.
Why Germans Are Opening LLCs in the United States
More and more German entrepreneurs, freelancers, and e-commerce founders are creating US LLCs — and for good reason:
✅ Access to the US market and clients.
💳 Easier to use Stripe, PayPal, Amazon, and US banking.
🔒 Limited liability — personal assets are protected.
🌍 100% remote setup, no travel or US residency required.
💼 Professional image for international business. If your business serves global or US customers, a US LLC offers flexibility that German legal forms like the GmbH can’t always match.
Step-by-Step: How to Open a US LLC from Germany
1. Choose the Best State to Form Your LLC
Not all US states are equal. For German residents and other non-US founders, the most popular and efficient choices are Wyoming, Delaware, and New Mexico. Wyoming is the top choice for most German entrepreneurs — it’s affordable, private, and has no state income tax. Delaware is respected for corporate law but has higher maintenance fees. New Mexico is cheap and private but less recognized by banks.
2. Pick a Company Name and Check Availability
Your LLC name must include “LLC” and be unique in your chosen state. You can check availability on the Secretary of State website and reserve it for a small fee if needed.
3. Appoint a Registered Agent
Every US LLC needs a registered agent — a person or company with a physical address in the state who receives official documents on behalf of your LLC. Professional registered agent services typically cost between $50 and $150 per year.
4. File the Articles of Organization
This is the official formation document. You or your agent submit it to the Secretary of State, including company name, address, registered agent, and business purpose. Once approved, your LLC legally exists — usually within a few business days.
5. Get an EIN (US Tax ID)
Next, you need an Employer Identification Number (EIN) from the IRS. It’s free, and non-US residents can get it by submitting Form SS-4. The EIN is required for banking, tax filing, and using platforms like Stripe or PayPal.
6. Open a US Bank Account or Online Banking Alternative
You don’t need to travel to the United States. Modern fintech banks such as Mercury, Relay, or Wise Business allow non-US owners to open accounts online. These provide US account details and make it easy to manage business finances globally.
7. Draft an Operating Agreement
Even if you are the only owner, create an Operating Agreement that outlines ownership, management, and profit distribution. It’s often required by banks and adds legal clarity.
8. Maintain Your LLC Properly
Each year, you must file an Annual Report with your state and pay a small fee. For example, in Wyoming, if your LLC has no assets in the state, you simply report “$0 assets” and pay the $60 minimum.
How US LLCs Are Taxed for German Residents
Germany and the US treat LLCs differently, and this is where most confusion begins. Germany does not automatically recognize the US tax classification. The German tax office (Finanzamt) decides whether your LLC is a transparent partnership or a corporation for tax purposes.
1. How the US Sees It
In the United States, a single-member LLC is usually considered a “disregarded entity.” The LLC itself pays no federal tax; the owner reports profits personally. If you have no US-source income (no US clients, employees, or office), you generally don’t owe federal tax, but you must file informational forms like 5472 and 1120 Pro-Forma each year.
2. How Germany Sees It
According to German tax specialists such as Scheller International and WINHELLER, the Finanzamt decides how to classify your LLC. If the LLC is treated as transparent, profits are taxed as your personal income in Germany. If treated as a corporation, profits are taxed in the US, and dividends paid to you are taxed again in Germany as dividend income. The classification depends on how independent your LLC is and how it’s managed.
3. Tax Rates and Double Taxation
If treated as a corporation, Germany taxes distributed profits (dividends) at about 26–27%, depending on your region. Under the US–Germany Double Taxation Treaty, the US withholding tax on dividends is usually capped at 15% and can sometimes be credited in Germany. If treated as transparent, you’re taxed on profits in Germany directly, without additional dividend tax upon distribution.
4. Permanent Establishment Risk
If you manage your LLC entirely from Germany, the tax authorities may treat your home office as a permanent establishment of the LLC in Germany. In that case, your LLC’s income is taxable in Germany. To avoid this, keep management activities outside Germany when possible and avoid signing all contracts from your German address.
5. Controlled Foreign Corporation (CFC) Rules
Under Germany’s AStG §§ 7–14, if you control over 50% of a foreign company that earns passive income and pays low tax abroad, profits may be taxed in Germany even if not distributed. While rare for small active businesses, it’s important to be aware of.
Do You Need to Pay Taxes in the US?
If your LLC has no US clients and no business connection to the United States, you generally do not owe US tax. However, you must still file annual reports and the IRS information forms to maintain compliance.
Pros and Cons for German Entrepreneurs
Benefits: Access to the US market and payment systems, full online setup, low maintenance cost, privacy, and limited liability.
Challenges: Complex German tax classification, potential double taxation, permanent establishment risk, and the need for professional advice.
Recommended Structure for a German Resident
For most German founders, the ideal setup is to form a Wyoming LLC, keep all operations digital, file US forms properly, and declare profits in Germany. Keep separate accounts for business and personal use, and maintain good documentation. This approach is simple, compliant, and cost-effective.
FAQs – LLC for German Residents
Can I live in Germany and own a US LLC? Yes. You can manage and own a US LLC 100% online.
Do I need to visit the US? No, you can form and operate everything remotely.
How will my income be taxed? Usually as personal income if your LLC is transparent, or as dividend income if treated as a corporation.
What’s the best state for German residents? Wyoming is typically the best option for non-US founders due to its simplicity, low cost, and privacy.
Final Thoughts
Opening an LLC from Germany is absolutely possible and increasingly common among online entrepreneurs. It offers credibility, simplicity, and access to US financial systems. Still, it’s crucial to understand how German tax law will treat your profits. Get professional advice early, stay compliant, and you’ll have a powerful setup for international growth. If you’re ready to form your LLC easily and correctly, visit WyomingExperts.com — we handle everything from registration to ongoing compliance, fully online.