Your LLC in the United States, opened and filed properly.

What an LLC is, and what it is not

An LLC (Limited Liability Company) is a US entity that separates your personal assets from the business and is flexible about how it is taxed. It is not a corporation, it does not issue shares and it has no board: it has members and an operating agreement that sets the rules between them.

It is popular among digital entrepreneurs for three practical reasons: it is quick and cheap to set up, it gives you a US entity to invoice and collect through, and in many cases it does not pay tax in the United States. The third reason is the one that gets misunderstood most often.

How it is taxed

By default the LLC is transparent: the United States looks through it and attributes the income to its members. A single-member LLC is a disregarded entity; a multi-member LLC is taxed as a partnership. It can also elect to be taxed as a corporation, which changes the picture completely.

For a member who is not a US person, the key question is whether the LLC has income effectively connected with a US trade or business. If it does not — typically a business run from outside the United States, without employees, offices or dependent agents there — there is usually no US federal income tax to pay on that income.

What does not disappear is the tax in your own country. Many countries, Spain among them, do not treat the LLC the same way the United States does, which can lead to double taxation or to income being attributed to you personally. We cover this in the guide on US LLCs and tax transparency.

What you file every year

These are the obligations that catch people out. Not filing them is far more expensive than the tax itself.

The penalty for not filing Form 5472 starts at USD 25,000 per year and per entity, and it applies even if the LLC had no income. It is the single most common and most expensive mistake we see.

Which state to choose

There is no best state in the abstract. These are the trade-offs that actually matter:

• Annual cost: Each state has its own franchise tax and annual report fee, and the difference between the cheapest and the most expensive is significant over the years.
• Privacy: Some states publish the members in the public registry and others do not.
• Where you really operate: If you have people, an office or stock in a particular state, you may have to register there regardless of where you incorporated.
• Banking and payment providers: Some providers are more comfortable with certain states, which in practice affects how easily you get your account.

Other countries, through our partner network

Sometimes the honest answer is that the LLC does not fit, and what you need is a company in the United Kingdom, in another EU country, in Latin America or in Asia — or simply to keep operating as you are.

For those cases we work with a network of local lawyers, accountants and corporate services providers, which lets us incorporate and advise outside our three core jurisdictions. We select the partner, coordinate the work and remain your single point of contact, so the tax strategy stays consistent instead of being split across advisers who never speak to each other.