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10 Mistakes Non-Residents Make With a US LLC (and How to Avoid Them) (2026)
After forming LLCs for 22,000+ clients worldwide, we see the same problems again and again: the wrong state, missed filings and rejected bank or Stripe applications. Here are the ten we see most, and how to avoid each one.
The mistakes that cost non-resident founders the most are skipping the yearly Form 5472, picking a costly state they do not need, applying to banks that do not serve their country, and using details that do not match across documents. Most are easy to avoid with the right state, consistent paperwork and a yearly filing calendar.
1. Choosing a state for the wrong reason
Picking Delaware or Nevada because big companies do, then paying higher yearly fees without needing what those states offer. For most online businesses run from abroad, Wyoming or New Mexico keeps yearly costs low. See our guide: best state for an LLC.
2. Skipping Form 5472 because the LLC made no money
Foreign-owned single-member LLCs file Form 5472 every year, even with zero income. Missing it can cost $25,000. See our guide: Form 5472 filing.
3. Applying to a bank that does not serve your country
Some popular banks decide by country of residence. Applying anyway wastes weeks. See our guide: bank comparison.
4. Mismatched names and addresses
Small differences between the passport, LLC documents, EIN letter and bank details are a top reason for bank, Stripe and Amazon rejections. See our guide: why Stripe rejects applications.
5. Using the registered agent address everywhere
The registered agent address is for legal mail; many banks and platforms want a separate business address. See our guide: registered agent vs business address.
6. Forgetting the state’s yearly filing
Missing the annual report or franchise tax can get the LLC dissolved, which freezes banking and payments. See our guide: annual report by state.
7. Losing the EIN letter
Banks and Stripe ask for the CP 575 or 147C. A lost letter delays everything. See our guide: 147C letter.
8. Applying for Stripe with an unfinished website
Stripe checks that the website shows what you sell, prices, contact details and policies. See our guide: Stripe and PayPal setup.
9. Assuming a US LLC removes tax at home
Your home country may still tax the income, and some activity can create US tax too. See our guide: how an LLC is taxed.
10. Leaving an unused LLC open
An LLC you no longer need keeps generating fees and filings until it is closed properly. See our guide: how to close an LLC.
Common Mistakes: FAQs
What is the most expensive mistake?
Usually missing Form 5472, because the penalty is $25,000 per form. Missing a state filing can also lead to dissolution and frozen accounts.
Can these mistakes be fixed?
Most can: late filings can be made, dissolved LLCs can often be reinstated, and bank or Stripe applications can be corrected and resubmitted. Acting early keeps the cost down.
How do I avoid them?
Choose the state for your real needs, keep every document consistent, set reminders for yearly filings, and apply to banks and processors that serve your country.
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