Key Takeaways
- LLC is the recommended structure for most visa holder businesses — simple, flexible, and lender-friendly
- Corporations (S-Corp or C-Corp) are better for businesses seeking outside investors or pursuing certain visa strategies
- Both structures require an EIN and provide the personal liability protection non-citizen owners need
- All Bankable Funds products are available to both LLC and corporate entities
- Consult a business attorney before forming an entity if your visa situation is complex
For most visa holders, an LLC is the best business structure. The LLC (Limited Liability Company) combines personal liability protection with operational flexibility, tax efficiency, and straightforward management — all critical factors for non-citizen business owners navigating complex immigration and business environments simultaneously.
LLC vs. Corporation: Head-to-Head for Non-Citizens
| Feature | LLC | S-Corporation | C-Corporation |
|---|---|---|---|
| Non-Citizen Ownership | Yes (all visa types) | No (citizens/LPRs only) | Yes (all visa types) |
| Personal Liability Protection | Yes | Yes | Yes |
| Tax Treatment | Pass-through (default) | Pass-through | Corporate rate (21%) |
| Investor Friendliness | Moderate | Limited | Excellent (stock) |
| Formation Cost | $50–$500 | $100–$800 | $100–$800 |
| Ongoing Complexity | Low | Moderate | High |
| Lender Acceptance | Universal | Universal | Universal |
| Best For | Most businesses | Domestic-owned service businesses | VC-backed startups |
Why Non-Citizens Cannot Use S-Corporations
S-corporations have a critical limitation for non-citizen business owners: non-resident aliens cannot be S-corporation shareholders. If any shareholder of an S-corporation is a non-citizen non-resident alien, the corporation loses its S-corporation tax election. LPRs (green card holders) who live in the US can be S-corporation shareholders, but all other visa holders are excluded from S-corps.
When to Choose a C-Corporation for Non-Citizens
C-corporations are appropriate for non-citizen founders who: plan to raise venture capital (VCs prefer C-corps), intend to issue stock options to employees (common in tech startups), or are pursuing certain visa strategies that benefit from corporate structure (some self-sponsoring H-1B arrangements work better in C-corp structures).
Formation in Delaware: Why It Matters
Many non-citizen business owners form their entity in Delaware even if they operate in another state. Delaware's court system has centuries of corporate law precedent, its business-friendly regulations attract international investors, and many business contracts, especially in tech, specify Delaware law. Bankable Funds, for example, is registered in Delaware.
Frequently Asked Questions
Yes. A non-citizen can own 100% of a US LLC. There are no restrictions on non-citizen LLC ownership under federal law. Some recent state laws restrict foreign national ownership of specific property types (agricultural land), but general business LLCs are unrestricted.
No. Non-citizens can be sole members of a single-member LLC without a US citizen or resident partner. Having US partners may simplify banking and provide additional business credibility, but is not required.
Most non-citizens should form their LLC in the state where they will primarily operate. If you run a restaurant in Texas, form the LLC in Texas. If you want maximum legal flexibility for investor relationships, Delaware is commonly recommended even if you operate elsewhere (you'll pay fees in both states).
LLC formation itself does not affect immigration status. However, if you begin actively working in the LLC in a way that conflicts with your visa terms, that can affect status. E-2 holders may use LLC formation to initiate the E-2 visa process. Always consult an immigration attorney regarding the interaction between entity formation and your specific visa.
Yes. Converting from sole proprietorship to an LLC typically involves filing Articles of Organization with your state and transferring business assets and contracts to the new entity. The IRS allows you to apply for a new EIN for the LLC (recommended) or in some cases use the same ITIN-based EIN. A business attorney can handle the conversion.
State filing fees range from $50 (Kentucky) to $500+ (California, Massachusetts). Additional costs include registered agent fees ($50–$300/year), operating agreement drafting ($200–$500 with an attorney, or free online templates), and in some states, annual report/franchise fees. Total first-year cost: $200–$1,000.
Bankable Funds strongly prefers applications from LLC or corporate entities because these provide the clean business-personal separation needed for revenue analysis. Sole proprietorships may be considered case-by-case, but the application process is significantly more complex. Forming an LLC before applying is strongly recommended.
A registered agent is a person or company that receives official legal notices on behalf of your LLC. Most states require LLCs to maintain a registered agent with a physical address in the state of formation. As a non-citizen, a registered agent service ($50–$300/year) is often the most practical solution, especially if you don't maintain a consistent physical office.