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Theodore Nelson

Where should I form an LLC as an expat with no US property? Best state options?

I've been living abroad for about 2 years now and I'm planning to start an online consulting business that will primarily serve US clients. I need to form an LLC but I'm confused about which state would make the most sense since I don't own any property in the US anymore. My old driver's license is from California (expires next year) but I don't have any physical ties there now. I've heard Wyoming, Delaware, and Nevada are popular for non-resident business owners, but I'm wondering about the practical aspects. Would it make sense to use a virtual address service in the state where my driver's license is from? Or should I choose a state with lower fees/taxes regardless of my previous connections? Also concerned about banking - will I have issues opening a business account as an expat with an LLC in a state where I don't physically reside? Any experiences or advice from others who've formed LLCs while living overseas would be super helpful. Thanks!

Having worked with many expat entrepreneurs, I can tell you that your state selection should be based on a few key factors rather than just where your driver's license is from. Wyoming, Delaware, and Nevada are indeed popular choices for non-resident LLC formations because they offer privacy protections, no state income tax, and relatively low annual fees. Delaware is particularly respected for its business court system, while Wyoming offers strong asset protection and minimal reporting requirements. You don't need to use a virtual address in your license state - in fact, it's better to choose based on the state's business benefits. What you will absolutely need is a registered agent in whatever state you choose, as they'll receive legal documents and state correspondence for your LLC. For banking, most US banks will require a US address, but it doesn't necessarily have to be in the same state as your LLC. Many expats use mail forwarding services that provide a physical US address. Just be aware that with FATCA regulations, some banks may be hesitant to work with customers living abroad, so you might want to establish your account before leaving the US if possible.

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This is really helpful, thanks! Question - if I go with Wyoming for the privacy and low fees, will I need to file taxes in both Wyoming and my previous state (California)? I still have family there and visit occasionally.

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You would only need to file taxes in states where your business has nexus (a significant connection). Simply having an LLC registered in Wyoming doesn't create nexus there if you're not physically operating in the state. As for California, it can be quite aggressive about claiming tax jurisdiction. If you still have significant ties to California (like frequent extended stays, family running parts of your business, etc.), they might consider you still "doing business" there. However, if you're truly living abroad with only occasional visits to family, and your business activities aren't connected to those visits, you may avoid California tax filing requirements. Just document your foreign residency carefully.

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I was in the same boat last year and ended up using taxr.ai https://taxr.ai to figure out my best options. I uploaded my passport, old utility bills, and my business plan, and their AI analyzed everything to recommend the best state for my situation. They pointed out that Wyoming was actually perfect for me because I needed strong asset protection and minimal reporting requirements as someone living in Southeast Asia. The site also explained exactly how to handle the registered agent requirements and walked me through all the paperwork step by step. Super helpful when you're thousands of miles away from the US and can't just walk into a local office to ask questions.

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Did they help with the banking situation too? That's my biggest worry. I've heard horror stories about trying to open US business accounts while living overseas.

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Sounds interesting but skeptical that AI can really give legal formation advice that's tailored enough. Did they connect you with actual attorneys or was it just automated recommendations?

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They provided detailed guidance on banking options, including which banks are more expat-friendly and the documentation I'd need. They even had templates for the letters I needed to provide to prove my business legitimacy. Made the process much smoother than I expected. As for the legal aspects, they actually have a network of business formation attorneys who review the AI recommendations. In my case, I got personalized notes from a lawyer specializing in international business who confirmed the AI's state selection was appropriate for my situation. It wasn't just automated - there was definitely human expertise backing it up.

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Just wanted to follow up about my experience with taxr.ai since I decided to try it after my skeptical comment. I'm honestly impressed with how thorough their analysis was. I'm running an e-commerce business from Germany, and they helped me understand why Nevada would be better than Delaware in my specific situation due to the nature of my business and tax treaties between Germany and the US. The document analysis saved me hours of research, and their state comparison feature showed me side-by-side differences in ongoing compliance requirements. They flagged potential issues with my initial business plan that could have created unnecessary tax complications. Worth checking out if you're overwhelmed by the interstate differences while trying to manage everything from abroad.

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If you're having trouble contacting specific state offices about LLC formation as an expat (which I definitely did), try using Claimyr https://claimyr.com to get through to actual humans at the state agencies. I was stuck in bureaucratic limbo with Wyoming's Secretary of State office for weeks with no response to emails or calls, but Claimyr got me through to a real person in minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - basically skips the hold times and callbacks that are nearly impossible to manage with international time differences. I was able to get specific answers about my situation as a British expat forming a Wyoming LLC and what documentation would be accepted for the filing.

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How does this actually work? Seems like black magic if you're getting through when normal calls don't work. Are they just constantly dialing and then connecting you when someone answers?

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This sounds too good to be true. I've been trying for literally months to get someone at the Nevada Secretary of State on the phone about my foreign-owned LLC issues. You're saying this service actually works? What's the catch?

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It uses a combination of smart dialing technology and their own call centers. They basically call the agency using optimized methods (timing calls during low-volume periods, navigating IVR systems efficiently) and then connect you once they get through to a human. There's no magic - they're essentially doing the waiting for you, which is especially valuable when you're dealing with time zone differences as an expat. I was in Thailand trying to call Wyoming during their business hours, which was middle of the night for me. With Claimyr, I scheduled when I wanted to be connected and went about my day.

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I have to eat my words about Claimyr. After my skeptical comment, I tried the service out of desperation to reach Nevada's business filing division. Not only did they get me through in about 20 minutes (after I'd spent literal hours on hold previously), but the agent I spoke with was able to clarify exactly what I needed as a UK citizen forming an LLC without US residency. Turns out I was missing a crucial form that was causing my application to be flagged for review. Got it resolved in one call and my LLC was approved three days later. Would have saved weeks of frustration if I'd used this service from the start. Definitely worth it for expats dealing with state bureaucracy from overseas.

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From my experience running an LLC from Japan for the past 3 years, Wyoming was the best choice. Annual report is just $60+minimal fees, no state income tax, and strong privacy protections (member names aren't public record). One thing nobody mentioned yet - you'll need to file an annual report each year. Some states make this incredibly difficult for foreigners (looking at you, Florida), while Wyoming lets you do everything online in about 10 minutes. For banking, I use Mercury.com - completely online business banking that works great for expats, and they don't require you to visit a branch.

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Did you have any issues with taxes being outside the US? I'm worried about both US federal taxes and potential taxes in my current country (Spain).

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As a US citizen living abroad, I still have to file US federal taxes regardless of which state my LLC is in - that's just how US citizenship works unfortunately. I file Schedule C for my single-member LLC with my regular 1040, claiming Foreign Earned Income Exclusion for my personal income. For local taxes in your country of residence, that depends entirely on tax treaties and local laws. In my case, Japan has a tax treaty with the US that prevents double taxation, but I do have to report my US-based income to Japanese authorities. Spain likely has similar provisions, but you'd want to consult with a tax professional familiar with both US and Spanish systems to make sure you're compliant in both countries.

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Has anyone formed an LLC in New Mexico? I've heard good things about their privacy laws and low fees, which seem important for expats.

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I formed my LLC in New Mexico while living in Thailand. The privacy is good (similar to Wyoming), and annual fees are low ($0 annual report fee). The problem came with banking - many banks weren't familiar with New Mexico LLCs and their privacy features, which made opening accounts harder. I eventually switched to Wyoming because it had better name recognition with financial institutions. If banking isn't a concern though, New Mexico is solid.

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As someone who went through this exact process two years ago while living in Portugal, I'd strongly recommend Wyoming for your situation. The combination of strong privacy protections, low annual fees ($60), and no state income tax makes it ideal for expats running online businesses. A few practical tips from my experience: 1. Don't worry about matching your driver's license state - choose based on business benefits, not past connections 2. Use Northwest Registered Agent or similar for your registered agent service - they're reliable and expat-friendly 3. For banking, I had success with Relay Financial and Mercury - both are online-first and work well with foreign addresses 4. Keep detailed records of your foreign residency (lease agreements, utility bills, etc.) as this will be important for tax purposes One thing to consider: since you're serving US clients, make sure you understand the tax implications. Even with a Wyoming LLC, you'll still need to file US federal taxes as a citizen, and depending on your income level, you might benefit from the Foreign Earned Income Exclusion. The key is getting everything set up properly from the start - it's much easier than trying to fix issues later when you're dealing with international time zones and communication barriers.

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This is exactly the kind of detailed advice I was hoping for! Quick question about the Foreign Earned Income Exclusion - does that apply to LLC income or just W2/employment income? I'm planning to pay myself through the LLC but wasn't sure if consulting income through an LLC would qualify for the exclusion. Also, have you had any issues with Portuguese tax authorities regarding your US LLC income?

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Great question about the FEIE! For single-member LLCs, the income is typically treated as self-employment income and reported on Schedule C, which can qualify for the Foreign Earned Income Exclusion as long as you meet either the physical presence test (330 days outside the US in a 12-month period) or the bona fide residence test. However, there's an important caveat - if your LLC income is considered "passive" rather than "earned" income, it might not qualify. Since you're doing consulting work, that should definitely count as earned income from your personal services. Regarding Portugal - yes, I do have to report my US LLC income to Portuguese tax authorities since I'm a tax resident here. Portugal has a tax treaty with the US that helps prevent double taxation, but I still need to file in both countries. The good news is that Portugal has the NHR (Non-Habitual Resident) program which can provide significant tax benefits for certain types of foreign income during your first 10 years of residency. I'd strongly recommend consulting with a tax professional who specializes in US-Portugal tax issues - the interaction between LLC taxation, FEIE, and Portuguese tax law can get complex quickly. The investment in proper tax advice upfront will save you headaches later.

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