Why do non-US residents need an LLC to sell on Amazon USA?

Content updated in January 2024*

Selling products on Amazon USA is a profitable opportunity for business owners around the globe. Creating an Amazon seller account is relatively easy, however, for non-US residents, there are several things to consider. In fact, in this article, we will explore why having an Limited Liability Company (LLC) can be crucial for non-US entrepreneurs looking to sell there. We’ll dive into tax benefits, compliance needs, and aspects related to the operation.

Advantages for non-US residents to open an LLC and sell on Amazon USA?

By default, an LLC is treated as a pass-through entity for tax purposes. Therefore, profits and losses go through to the owners’ personal tax returns. And it can help non-US residents avoid double taxation and reduce your tax liability.

Through your LLC, you can benefit from reduced withholding rates on income earned from Amazon USA sales. All in all, can lead to tax savings and make your e-commerce business even more profitable.

How does it help your brand and your reputation in the US?

Compliance is a critical aspect of selling on Amazon USA. Non-US residents must meet certain legal responsibilities to operate your business smoothly. Forming an LLC ensures that you fulfill these requirements. An LLC offers a legal structure that separates your personal assets from your business liabilities, shielding your personal finances from potential legal disputes.

Moreover, Amazon requires sellers to have an US-based bank account to receive payments. Establishing an LLC enables you to open a business bank account in the United States, which leads to a smooth financial operation. In result, having a US bank account also makes the payment simple. And the same goes for reconciliation processes, allowing non-US residents to better manage their finances.

How can the LLC improve your operations?

Having an LLC legitimizes your business and instills trust among potential buyers, eventually, boosting your sales.

But more importantly, having your own LLC simplifies the process by establishing a formal business entity to assume the role of the importer of record. It can help you comply with customs regulations, handle necessary documentation, and manage the payment of duties and taxes more efficiently.

In conclusion, opening an LLC in the US can facilitate the importing process for non-US residents, saving you valuable time and effort. Do you want to register your own LLC 100% online?