I have always wanted to open a US LLC to receive payments. If you work or sell anything online, you know that collecting and receiving payments in India from abroad is extremely difficult.
First, you go about getting registered on PayPal as a business as that is the only way to receive payments. Then you find out you can't hold money and it will get transferred automatically. Then you head on to Stripe and find out you can only register as Sole Proprietorship to receive international payments and you need an IEC to actually start receiving the payments. But I did all that. It was simpler than setting up a US LLC or so I thought then.
I had that all set up for the past decade. It was March of 2023 when I started having issues with PayPal. Stripe was working great, but due to Indian laws, I had to collect the names and addresses of each of my clients even though I sell services that are delivered completely online. Making the customer fill 12 lines of personal information for a simple service that does not require a thing might have spooked so many people who do not complete checkout. Eventually, my IEC expired as well and that was the last straw.
There is a lot of noise on the internet about how to open an LLC, with a lot of people saying conflicting things. It was looking very complicated for an average person. After plenty of research, I dived in to actually start doing things.
You need 3 things to actually start receiving payments from Stripe and 4 things if you need to receive payments from PayPal. I was only interested in Stripe though, as PayPal is horrible to work with and expensive as well.
• LLC Registration
• EIN (Employee Identification Number)
• US Bank Account
• ITIN (In case of PayPal)
It took some elaborate manual work and about 40 days which could have been taken care of much easily using the 'Start' service from FirstBase, who does all the work for you professionally. But we will see how the process goes anyway.
A US LLC Registration
You need to select a state for opening your LLC. I wanted the cheapest possible option but also the minimum hassle as well. There are a lot of options for a foreign LLC. The best option I found with the least complicated application was Wyoming. It was a little expensive than the cheapest options, but what most people forget is that you also have to pay Annual Report Fees to the state. Wyoming came out to be cheaper with the least annual compliance requirements.
Now I needed to do the filings for the LLC which would cost me $100. The state requires a Registered Agent from that state to be on record and file for you. Looking for that, I came across WyomingAgents. Their fee was a simple $25 after which they would give me their details and I could use them to file the LLC documents online.
Halfway during registration, I found that they also have another package for $150, that will take care of the filings with the Registered Agent details, as well as provide mail forwarding along with a limited free trial US Phone number.
Considering it was only a little more expensive than what I was paying to do it all myself, I decided to go with the $150 package. I filled all my details along with a copy of my passport.
My LLC was formed in a couple days and I got all the required documents on my email. First step done!
Employee Identification Number (EIN)
An EIN is mandatory to open a US Bank Account and a Stripe Account. WyomingAgents also offers a service to get an EIN issued on your behalf but I did not want to pay for the service considering that the EIN form is very simple and its free to file.
I downloaded the EIN form and filled it. There are two ways to file for EIN. Either you call a paid US phone number in which you read the form you filled on your end and they will fill it on their end and dictate you your new EIN at the end of the call.
The other is you fax them the filled form. Its much easier to do. All I did was sign up for a free trial at HelloFax. I sent the form along with the Articles of organization of my LLC to +1 855-215-1627 and now it was time to wait. I had read that it can take a few weeks to a month to receive a response. They also mail you the EIN physically at the registered address of your LLC.
Thankfully, in about 10 days I received an email from WyomingAgents who had received my EIN documents, scanned them and forwarded it to me. Step Two, completed! Now all I needed to do, was open a new bank account.
A US Bank Account
There is only one bank in the USA that will let you open a bank account seamlessly from the comfort of your home completely free of cost. Its Mercury Bank. The easiest of all the steps.
I signed up, filled all of my details along with a copy of my passport. I entered my LLC details along with its EIN which was instantly verified. They also have a spot to describe your business which I did in detail. Make sure to fill all details accurately.
I had heard about Mercury putting a hold on the accounts for some users pending additional details. After I completed the formalities, the account went for verification and was approved in 1 day without any hold.
Finally, I had my own US-based LLC with a Bank Account all without leaving my couch or spending an extravagant amount of money.
The next day, I opened a Stripe account which was activated instantly as they have instant verification of bank and LLC details for Stripe USA. I have been receiving the money in that account smoothly which gets transferred to my Mercury account whenever I choose to. All my clients need to do is enter their payment details, no other information is needed. I can also receive money in the Stripe account from services like Medium who don't support India due to local restrictions.
Overall, it took me a month to form the LLC, but only a few hours of actual work. It's much easier than I thought and it was completely worth it. As always, you can also get it done with FirstBase, who will do it all for $399 (you can get a 10% discount using coupon code 'PARTNER10') without you having to do anything.
So if you are thinking about opening your own LLC, go ahead!