Foreign LLC Fees by State

25 comments on “Foreign LLC Fees by State”

1. Hi Matt,

   I am a foreigner owning a software development company in Wyoming State. We will soon receive clients from all 50 states. Do We need to register a foreign LLC? If yes, how many? What is the fee and how long does it take to obtain?

   I have read that if the business doesn’t have a bank account, office space, or employees in other states, they don’t need to register a foreign LLC. Is that correct?

   Thanks a lot.

   Best,
   Hazha

   • Hi Hazha, no, you don’t need to worry about doing any Foreign LLC registrations. Just having clients or customers in a state doesn’t mean a Foreign LLC registration is needed.

2. I am a military member. Currently in Mississippi, but moving to Washington State soon. I am originally from Texas. I am wanting to open an LLC for multiple business endeavors which are dropshipping on Amazon and selling clothes on my own website. At this point I’m not sure where I should register my business. Initially I was going to incorporate in Texas and be a foreign LLC in Washington, because I’ll probably only be in Washington for 2 years and ultimately move back to Texas after the military. But the big question is – if I’m not actually doing any operating in Texas for the first 2 years, is it worth the time and money? Not too excited to pay taxes in both states and I also don’t want to later become a foreign LLC in Texas. I want Texas to be my business home state when I move back. How should I go about this or what are my options?

   • Hi Ciara, if it were me, I’d do exactly as you said. Form an LLC in Texas, and then register it as a foreign LLC in Washington. Then when I leave Washington, I’d cancel/withdraw that foreign qualification. While you do have to maintain 2 LLC flings (a Registered Agent for each LLC and file Annual Reports in both states), you will not pay taxes in both states. This is because Texas doesn’t have a personal income tax. You’ll still need to file a Texas LLC Franchise Tax Report, however, it’s just “informational”. You won’t owe any tax. You’ll just file a state income tax return while in Washington.

3. I have a question. I have an llc in one state but I am considering doing business in another state as well. I may be moving. I was trying to make a decision of whether to dissolve it in one state and form it in another or just file a foreign entitiy. My question is; do you pay taxes in both states? Like if I operate in anther state and do nothing in the formation state. Do I pay taxes on the same income twice for both states? Or is it just reporting but no actual business was done in one state?

   • Hi Bailey, generally speaking, from a state income tax perspective, the income is apportioned to the state (or states) where it’s made. So no, you wouldn’t be taxed twice. Depending on the state, typically there are 3 ways to “move” an LLC. What state is your LLC formed in? And what state might you be moving to? And do you want to keep the same EIN, company history, and bank account… or would you not care about “starting over” with those?

     • It was formed in Ga and will possibly move to La. I wouldn’t care about starting new if need be.

       • Hi Bailey, the first option is to keep the Georgia LLC open and then register that LLC as a foreign LLC in Louisiana. This is still one LLC; it’s just registered to do business in two states. EIN number and bank account will stay the same. This is more expensive, since you’ll need to maintain two LLC fillings, maintain two Registered Agents, and maintain two LLC Annual Report filings.

         The second option is to dissolve the Georgia LLC and form a new LLC in Louisiana. This is less expensive than option 1, however, you’ll need a new bank account and EIN. Since you said you didn’t mind starting over, this may be the one most worth considering.

         Option 3 is called domestication. It’s kind of like “converting” the Georgia LLC into a Louisiana LLC. This is the most expensive option among the three. However, its advantages are over the long run, it may be less expensive (you just need to maintain the LLC filing in Louisiana). And you also get to keep the same EIN and bank account. We recommend working with an attorney if you choose domestication, as the filing is more complex than a regular LLC filing.

4. So I am running a staffing company. If I am sending W-2 employees to work in Wisconsin but have the business LLC filed in Illinois would I then need to file as a foreign LLC in Wisconsin as well? Or is this a situation similar to Iman and the E-commerce question or my business is still being ran in Illinois. Please help.

   Thank you,

   Tanner

   • Hi Tanner, this certainly sounds like the LLC is transacting business in Wisconsin. Therefore, it’s supposed to register as a foreign LLC in Wisconsin. Hope that helps.

5. Is there a yearly fee the foreign LLC has to pay? And is the foreign entity subject to taxes in both states one is doing business (the home state and new state)?

   • Hi Adada, yes, an LLC with a foreign registration has to file the Annual Report (or similar requirement) in the foreign state (if such a requirement exists). It’s just one LLC (not 2). It’s an LLC formed in its original state (still has one EIN) with authority to transact business in its home state plus another state. Taxes are based on where and how the income is made. We recommend speaking with an accountant about any tax obligations. Hope that helps.

6. What about annual fees for foreign LLCs, are they also different from regular (local) LLC annual fees?

   • Hi Geri, the annual fees may differ. It depends on the state. Since we don’t currently have those annual fees on this page, you’ll want to get in touch with the Secretary of State’s office for the details.

7. So any e-commerce business that sells in all 50 states has to register for foreign qualification in the other 49 states if their operations and the LLC are based in one state? That could be ~$9,500 in filing fees!

   • Hey Iman, an LLC should be formed/registered in the state(s) where it’s doing business. Selling to customers in this context usually doesn’t constitute doing business, but rather, it’s interstate commerce. Most people are running e-commerce businesses from their home, and are therefore doing business in their home state. Hope that helps.

8. I have a llc that was formed in Wisconsin … I now live in Kansas and will do business in both Kansas and Wisconsin . What do I need to do ?

   Thanks
   Jeff long

   • Hi Jeff, since you formed your LLC in Wisconsin, your LLC is already authorized to do business in Wisconsin. If you would like to “extend its authority” into Kansas, you can register your Wisconsin LLC as a foreign LLC in Kansas. Keep in mind, you’ll still have 1 LLC, A Wisconsin LLC… it would just also be allowed to do business in Kansas. Hope that helps.

     • Hi Matt,

       First of all thank you for this enormous information you have provided to the people who are interested in forming or operating legal entities, all of them are very much helpful.

       My question is if planning to form LLC and also planning, assuming that this LLC will possibly be operating in other states rather than its registered state, will it be proper to form a foreign LLC? or still go with a local one and later get a permit or transform into foreign one?

       I might not have read the information about it, so if you have one and i missed it, sorry about that, and please indicate where I can get information about my questions.

       Also, if i may ask, do you have any comparison of fees and expenses between local and foreign LLCs?

       Thank you very much in advance.

       Regards,
       Lasha

       • Hi Lasha, we have the domestic LLC filing and annual fees here: LLC filing fees by state. You can use that page and compare it with this page. Most states (Texas is an exception) have similar fees for domestic and foreign LLCs. To answer your initial question, let me first explain something: an LLC that is formed in one state (a domestic LLC) and is registered to do business in another state (foreign LLC) is still just 1 LLC. It’s not 2 LLCs. It’s 1 LLC (with 2 filings) that is authorized to do business in its home state and the foreign state (or foreign states if multiple registrations). So you never “form” a foreign LLC. The verb “form” is used for domestic LLCs. And the verb “register” is used for foreign LLCs. So you can form an LLC in your home state and later when your business expands to another state, you register your LLC as a foreign LLC in that new state. Hope that helps!

         • Thank you Matt!

9. In-regards to a business owner that lives in one state yet its assets are in another would it be best to register with the home state or the state the assets are in, (it has not been registered in either state yet)? How would one go about registering a business that does mainly online sales with ocassional sales at events? Would it need to register in each of the states that it is doing events?

   • Hi Indy, it comes down to where the LLC is transacting business. You’d need to look at the statutes and/or speak with an attorney. Usually, isolated transactions are not considered transacting business, but things vary from state to state.

10. If a foreign owned single member Wyoming/Delaware LLC wants to open a bank account, but the business doesn’t have any ECI and has no US tax obligations – what states/banks are the best options for bank accounts? Assume the single member can travel to any state.

    Does the LLC have to register as a “foreign LLC” in that state before opening a bank account there? Even if it has no business or ECI in the US?

    If the foreign owned LLC really has to register as a”foreign LLC” in that state in order to open a bank account, does it need to buy a mailing address in that state and have proof of address docs sent there?

    How long does it take to for foreign owned single member Wyoming/Delaware LLC to register as a foreign LLC in the newly desired state? What is the timeframe and how long does this usually take to complete this (ie obtain the form that the bank needs to see in order to open the account)?

    • Since banks are governed by state regulations (in addition to federal regulations), they can only open an account in the state where the entity was formed or is qualified as a Foreign LLC. Some banks require a proof of address, some don’t. We recommend calling a few banks ahead of time to check on their requirements for opening an account. We also recommend looking into a TransferWise account. If you need to register as a Foreign LLC, the approval time depends on the state where you’re looking to qualify. Usually though, it’s between 3 to 8 business days. We have more info on banking for foreigners here: foreigners opening US LLC bank account. Hope that helps.

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