If you’re an international entrepreneur looking to start a business in Texas and sell your products or services in the US, consider a Limited Liability Company (LLC). In this guide, we’ll show you how to start an LLC in Texas. The process occurs online, it is safe and agile. From the from the comfort of your own home, just choose one of our plans to get things going.
Even non-US citizens can set up an LLC in Texas without having to travel to the US. Before we dive into details, let’s explore what LLCs are and how they work in the US.
What is an LLC?
Opening your business under the LLC setup will allow you to establish some key management aspects autonomously. Ownership percentage depends on initial capital investment or equity. As for the profits, the distribution takes places however and whenever you specify in the company’s internal protocol documents.
LLC owners are called members. They can decide whether they form a board of directors to run the company or if they hire an external, non-member manager.
One of the most appealing aspects for entrepreneurs is that LLCs do not pay federal or state corporate income taxes. The profits pass through directly to the members whenever they’re distributed. Income taxes are levied on an individual basis only.
It is easy to start an LLC in Texas
With Globalfy, you can do the entire process from home. There’s no need for an American visa, US residency, or US tax ID. You can open and run your Texas LLC without leaving your home country. It only takes 3 steps:
- Select the state which you already opted for Texas;
- Decide the type of company structure. LLC is already the option in this case;
- Select one of our plans: Scale, Essential, or Starter.
After that, leave the rest to us. We will keep you informed every step of the way as we complete the business formation process.
How long does it take to register an LLC in Texas?
Check out how long it takes for the Texas Secretary of State to review and approve LLC submissions.
- In-person filing: 7 weeks.
- Online registration: 4 business days.
Time is crucial for everybody but especially for entrepreneurs.
How taxes work for LLCs in Texas?
All profits generated by the LLC pass directly to the members. In that case, profits are not being taxed on a corporate level, however, you still must report your gains.
If you open a single-member LLC , you must fill out and submit Form 1040, Schedule C to the IRS. In addition to paying for the company’s income on an individual level. In case the LLC yields losses during a fiscal year, they may be deducted from your income tax or carried forward to the next year.
If you open a multiple-member LLC, the company must file a 1065 U.S. Return of Partnership Income form to the IRS. There is no tax payment for the LLC since it’s just an informative return. The LLC will also provide a Schedule K-1 to each member. Therefore, they can fill out and submit their individual income tax returns and pay taxes based on their share of the profits.
At a state level, Texas LLCs don’t have to inform anything regarding income or losses. However, they must submit the Public Information Report to the Texas Comptroller’s office annually.
Is a single-member LLC in Texas the best option for you?
Did you know that if you open a Texas LLC by yourself, with no other partners, and your operations are oriented on providing services in the US from abroad, you can enjoy tax reductions? That’s right! If you open a single-member LLC in the United States to provide digital services from your home country you will not have to pay federal individual income taxes.
Does Texas offer more protection to LLCs?
In Texas, LLCs benefit from a robust charging order protection policy that shields their assets from liabilities incurred by individual members. This extra layer of protection, in addition to the inherent liability protection offered by all LLCs in the US, provides peace of mind for LLC members in Texas. So if you’re considering forming an LLC in Texas, rest assured that the state has some of the strongest policies in place to safeguard your assets and financial interests.
What are the differences between LLCs and Corps?
Contrary to LLCs, Corporations are a more rigid structure in which owners (shareholders or stockholders) have responsibilities and limitations dictated by law.
Raising capital and getting investment is also very different for Corps than it is for LLCs. Corporations are able to issue stocks or shares and participate in stock exchanges to get external investments. Public stock trading is very appealing to venture capitalists and investors, for which raising capital can be less challenging for Corps than for LLCs. On the other hand, LLCs can offer equity or debt to collect funds from external sources.
Nevertheless, Texas LLCs are still able to offer unique benefits that C Corporations do not possess such as pass-through taxation and charging order protection.
More benefits of opening an LLC in Texas
By having a presence in the American market, you will be able to do business in the world’s most profitable environment. The US alone is responsible for a third of the global revenue in the IT sector.
Meanwhile, projections show the e-commerce industry is expected to enjoy accelerated growth in the next 2 years, with the American sector positioned at its forefront.
Texas’ low tax rates and the foreign-friendly of business and financial institutions, also make the state more than appealing to international entrepreneurs and companies of all sizes. With Globalfy, you will get an all-in-one service for your venture to thrive in the American and global markets: An LLC in the US from abroad, an American business bank account, a Virtual Address, a Registered Agent, over US$200,000 in discounts from our Rewards program, and more!
Here are some aspects for you to see how starting an LLC in Texas. It can be more beneficial than in other popular states.
| Florida | Delaware | Texas | New Mexico | Wyoming | |
| LLC state formation fee | $125 | $160 | $300 | $50 | $104 |
| Annual report or franchise tax | $138.75 | $ 300 | $ 0 | Not required | $62.25 |
| Privacy | Public | Private | Public | Private | Private |
Globalfy’s subscription plans were made to handle the bureaucracy while you focus on growing your business. By subscribing to the Essential plan, your company’s tax obligations are secured, including the Tax Season. As for Scale, our complete package, you will also rely on a bookkeeper to handle all your business banking transactions. Starter is a great option if you need support with key business formation and administrative matters.
