Key Takeaways:

  • You can open an LLC with an ITIN, but an EIN is required to register the business with the IRS.
  • An EIN can be obtained without an SSN or ITIN, making it possible for foreign nationals to start an LLC in the U.S.
  • ITINs are for tax purposes only and do not grant work authorization or business registration rights.
  • Foreign entrepreneurs can establish an LLC in the U.S. without residency or citizenship.
  • A U.S. business address and registered agent are typically required to open an LLC.
  • Opening a business bank account in the U.S. may require additional documentation beyond an EIN.
  • Consulting a qualified tax consultant or corporate attorney is recommended for legal compliance.

“Can I open a business with an ITIN?” is one of the first questions foreign principals seek to answer when planning to start a business in the U.S. It can be a complex procedure to obtain the necessary documentation to register a business in the country, but the best place to start is by gaining an understanding of the role that tax identification numbers play in the process. These tax ID numbers are issued by the IRS and are required of individuals who will earn income in the U.S., and thus have to file annual tax returns with the agency.

Even before considering tax ID numbers, the first step any foreign individual with the goal of running a business in the U.S. should take is obtaining an E2 Visa. This visa is required for any individual seeking to legally gain employment in the country or start a business, but it is not enough on its own for either. For that, a tax ID number is necessary as well.

3 Types of Tax ID Numbers

All tax ID numbers issued by the IRS have nine digits. These include three types of ID: Social Security Numbers (SSNs), Individual Taxpayer Identification Numbers (ITIN), and Employer Identification Numbers (EIN). Many foreign individuals mistakenly believe that they must have an ITIN to open a business in the U.S.

  • Social Security Numbers: SSNs are granted to citizens and permanent residents of the U.S., although they are occasionally provided to temporary residents. An SSN can be obtained by filing Form SS-5 with the Social Security Administration, along with required documents to establish identity and either citizenship or immigration status. An SSN is used to file taxes, and while in some cases it may be used to operate a sole proprietorship or single-member limited liability company (LLC), it is not enough to start a partnership, multiple-member (LLC), corporation, or other types of business entities.
  • Individual Taxpayer Identification Numbers: ITINs are for individuals who are not eligible to receive SSNs. Like an SSN, an ITIN is required to pay taxes in the US, although they must also file Form W-7 at the same time. As is the case with an SSN, an ITIN is not required to start a business in the U.S. and may be enough to operate a sole proprietorship or single-member LLC.
  • Employer Identification Number: The IRS issues an EIN, also known as a Federal Tax Identification Number, to an individual who intends to start a business in the U.S. Neither an SSN nor an ITIN is required to obtain an EIN, although this is a common misconception. In fact, the difference lies in the fact that both SSNs and ITINs are only required to pay taxes because of employment, while an EIN is required for anyone looking to become an employer under certain conditions, whether the business is a sole proprietorship, partnership, LLC, corporation, or another business entity.

How an EIN Enables Foreign Nationals to Start an LLC

An Employer Identification Number (EIN) is crucial for anyone looking to establish an LLC in the U.S. Foreign nationals who do not have a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) can still obtain an EIN directly from the IRS by filing Form SS-4.This number allows LLC owners to:

  • Register their business with federal and state authorities
  • Open a U.S. business bank account
  • Hire employees legally in the U.S.
  • Comply with federal tax obligations

Unlike ITINs, an EIN is specifically for business use and does not require the applicant to be a U.S. resident. However, some state-specific requirements may apply when forming an LLC, so checking with local business agencies is essential.

Understanding the ITIN

Even though an individual who cannot establish U.S. citizenship or permanent residency status and intends to earn income in the U.S. must have an ITIN, the ITIN alone is not enough to gain employment, nor does it bestow the right to Social Security benefits. The following individuals are candidates for an ITIN:

  • Citizens of foreign nations who cannot obtain an SSN, but must pay tax on earnings in the U.S.
  • An individual who does not have a green card or has not passed the substantial presence test (non-resident aliens), yet must file a tax form to receive a tax credit.
  • Green card holders (resident aliens) who have earned income in the U.S.
  • Dependents or spouses of U.S. citizens or green card holders who have earned income in the U.S.
  • Dependents or spouses of non-resident aliens who have earned income in the U.S.

There are advantages for foreign nationals to establish an LLC or corporation in the U.S. It is suggested that any foreign individual looking to start a business in the U.S. consult either a qualified tax consultant or an experienced corporate attorney. It’s important to understand the tax regulations before setting up shop.

Opening an LLC as a Non-Resident Without an SSN

Foreign entrepreneurs do not need a Social Security Number (SSN) to open an LLC in the U.S. The process typically involves:

  1. Choosing a state: Certain states like Delaware, Wyoming, and Nevada are known for being business-friendly.
  2. Appointing a registered agent: A U.S.-based agent is required to receive official documents.
  3. Filing LLC formation documents: The Articles of Organization must be filed with the chosen state’s Secretary of State office.
  4. Obtaining an EIN: As mentioned earlier, an EIN can be obtained without an SSN or ITIN, making it the most crucial tax ID for LLC owners.
  5. Complying with tax and reporting obligations: Depending on the business type, state taxes, federal taxes, and annual report filings may be required.

While an ITIN is used primarily for tax filing purposes, it is not necessary for LLC registration or EIN application.

Can You Open a U.S. Business Bank Account With an ITIN?

One of the biggest challenges for foreign business owners is opening a U.S. business bank account. While an EIN is required, banks may also request:

  • A U.S. business address
  • A passport or other official ID
  • Proof of LLC formation (e.g., Articles of Organization)
  • Operating Agreement (if applicable)

Many U.S. banks also require in-person visits, which can be an obstacle for non-residents. However, some financial institutions and fintech companies offer remote account opening services for foreign entrepreneurs.

Frequently Asked Questions

  1. Can I open an LLC with an ITIN but no SSN?
    Yes, an ITIN is not required to start an LLC. You only need an EIN, which can be obtained without an SSN or ITIN.
  2. How do I get an EIN without an SSN or ITIN?
    You can apply for an EIN using IRS Form SS-4 and indicate "Foreign" where an SSN is requested. The IRS allows non-residents to apply by fax or mail.
  3. Can I use my ITIN to open a business bank account?
    ITINs alone are not enough. Most banks require an EIN, along with additional documentation like an LLC Operating Agreement and proof of U.S. address.
  4. Which states are best for non-residents to start an LLC?
    Delaware, Wyoming, and Nevada are popular choices due to low fees, privacy protections, and favorable tax structures.
  5. Do I need a registered agent to start an LLC as a foreign national?
    Yes, most states require a registered agent with a physical address in the U.S. to handle official business correspondence.

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