What is a Foreign LLC?

56 comments on “What is a Foreign LLC?”

1. Great. Info. Thank you very much. Quick question. I am thinking about forming a single member LLC in Delaware for my incubator hedge fund and am currently living in NJ. I don’t plan to start my business within 2 years, but just wanted to build an investment track record using my own money through the single member LLC. That said, do I need to file this foreign qualification in NJ? I am not doing any business here within 2 years and the LLC in Delaware has only me as a member. Thank you very much!

   • Hi Jun, New Jersey is quite strict about “doing business” so it would be best to register as a Foreign LLC there after your Delaware LLC is formed. Hope that helps.

2. Hello,

   I would like to create an LLC (tax S-Corp) in Delaware being the only CEO then in Florida as a foreign qualification in Florida (this will be the place of business because I live in Florida). I know that even if the creation of the company takes place in Delaware I will pay all taxes in Florida because the activity will take place here but I would also have income from other countries (music label), for these revenues there, I would be taxed in Delaware or Florida?

   • Hi Nicolas, you’ll need to run this question by an accountant since the Delaware LLC being taxed as an S-Corp may need to file with the Delaware Division of Revenue. You may having filings due in both states. Thanks.

3. Hello, We formed our parent LLC in New Mexico, but live in PA. If this parent is only a holding company, do we have to file as a foreign LLC? Thanks!

   • Hey JJ, nope. If the parent New Mexico company is going to own a domestic LLC in Pennsylvania, the parent New Mexico company isn’t doing business in Pennsylvania, so there’s no need to file a Foreign LLC registration/qualification. Hope that helps.

4. Hello – we have a WY LLC and are trying to register as a Florida foreign LLC. We paid for a registered agent in FL., submitted the forms to Tallahassee, and they have been rejected and returned twice. We are following the instructions but apparently are not properly filling out the form. We submitted the $125 filing fee originally plus an additional $35 for certified copy (total $160). After the last rejection we asked the online registered agent if they could complete our filing and they said yes but would charge the state fee again. It appears this could be solved by just resubmitting the application correctly filled out as the state is holding our $160 waiting for the corrected form. Can you offer any suggestions?

   • Hi Delaney, bummer about the multiple rejections. You are correct about the $160 credit being used/applied. Where do things stand now?

5. I’m a resident of of New York City and lives most of the time in Connecticut. Means that I have leased properties in both states.

   Could I start a LLC in New York and register same company in Connecticut as a domestic but not as a foreign. What will be pluses and minuses if its possible.

   • Hi Kushan, there is no such thing as taking an LLC from one state and registering it as a Domestic LLC in another state. If an LLC is to be registered in a state where it was not formed, that is considered a Foreign LLC registration. Hope that helps.

6. Hi Matt,
   Thank you in advance for your help. This is a great site!
   But I’m still very confused when it comes to Foreign LLCs.
   I live in State A. I set up an LLC located in State B. I am a single member owner of this LLC. (I used Northwest, by the way.)
   This LLC is going to own property and conduct business in State B only. There will be minimal net income, but I may still chose to classify it as an S-corp for tax filing purposes.
   Are you saying that the rules dictate that I must also register this LLC as a Foreign LLC in the state where I personally reside, which is State A?
   This seems rather complicated and expensive for a small business.
   Thanks for your help.

   • Hi Eve, great question. We’ll work on doing a better job explaining things. Where an LLC should be formed/registered comes down to where it’s legally transacting business. For most people, that usually happens to be their home state. In the case of real estate investing out of state though, that happens to be the state where the property is located. Hope that helps.

     • Perfect, I actually had the same question.

       Also, what if the entity was a holding company? Let’s say it’s a Series (sub-series) of a Series LLC in NV, WY, ect. taxed as an S-Corp and we’re going to use it as a holding company for stocks or other properties of a Texas C-Corp. Is the sub-series LLC transacting business in the state that it is registered if it physically possesses the Texas C-Corps property? Are there requirements on a per state basis that specifically define what constitutes domestic business transactions?

       • Hey Mike, yes, each state has different statutes regarding doing business. It’s best practice to have a conversation about this with an attorney. Typically, just owning another company/asset isn’t doing business. But again, there’s not a black and white answer in this case. Hope that helps and thanks for your understanding.

7. Can you transfer your current LLC registered state to another state? Or do you need to create a new LLC?

   What is best to avoid foreign LLC costs for real estate property purchases in an outside/new state?

   • Hi Maria, it depends on the states. Some allow, some don’t. It’s usually referred to as a domestication or conversion. You’ll need to reach out to both states for instructions and procedures. Hope that helps.

8. Since it is so expensive annually to have an LLC based in CA, it seems wise to establish the LLC in AZ for $50 and no annual fee and then pay CA the $70 foreign LLC fee? This way the business never gets dissolved and there is no $800 annual CA fee. Am I missing something? This is for a consulting business based in CA but could do business in any state.

   • Hi Eric, foreign California LLCs are still subject to the $800 franchise tax and all other tax filings with the California Franchise Tax Board. And a foreign LLC can have its status revoked, which is the equivalent to a domestic LLC being administratively dissolved. If an LLC is doing business in California, we recommend just sucking it up and forming an LLC in California. All other “moves” to get around this end up costing a lot more money, don’t accomplish what people think, and worse, waste a lot of valuable time and can be quite stressful. Unfortunately, it’s the cost of doing business in California. Hope that helps.

     • OK, thanks. I didn’t realize foreign LLC’s would also have to pay the $800. I found there is still a small advantage to registering in NV/WY/MT/AZ. Looks like it will cost more initially with the $800+$50+$70, but the home state LLC won’t be disolved. A company in California will owe the $800 a year the entire time it is in existence. So if you shut down for a year, and travel, and don’t make a dime, unless you dissolve the company, you will still owe $800 a year. Even if you don’t send in your annual statement of information, and get administratively dissolved, you will still owe the $800 a year. So if you incorporate in another state, you can just cancel your qualification to do business in CA and thus not have to pay the $800 for that company, and then if you don’t operate the business for awhile, it is still there, building credit history, longevity, and not costing you very much money to keep it active.

       • You’re welcome Eric. Interesting scenario. One small part you may want to look into with an accountant. The LLC also has to file Form 568 (Limited Liability Company Return of Income) each year. I’m not sure how qualifying, cancelling, and re-qualifying may affect that.

9. Hi there,
   I totally understand that the LLC should be registered as a foreign LLC if doing business in another state. Does this concept also apply to E-commerce business? For example, if I register a Wyoming LLC but live in Nevada, doing amazon selling business online. Should I still register my Wyoming LLC as foreign LLC in Nevada? To make it clear, that business in Nevada is online, and it doesn’t have physical store or employee. All it may have is utilizing Amazon’s warehouse and FBA service.

   • Hi Jason, yes, this concept extends to online business, since the online business is being ran and managed from somewhere. While the business is online, all the activities you are doing on behalf of that business are taking place in Nevada. So therefore the LLC will be transacting business in Nevada. Hope that helps.

10. 3 partners have formed a holding company (A) in WY. This holding company will own a subsidiary operating company (B), which will develop apps for a Canadian owned platform. So all work will be remote/online, and no actual business will be transacting in any of the following states. 2 of the partners of (A) live in PA and will be the CEO and CMO of (B), and the other partner who lives in NC will be the COO of (B). (B) will also hire 2 initial remote developers, one lives in PA and the other CA.

    What state do you recommend we form (B) in, and would we have to file (B) as a foreign entity in each other state where a remote employee works? (aka if we filed in WY, would we need to file foreign in NC, PA, and CA as well with this setup?)

    Does it make a difference if the employee is a contractor instead? (1099 vs W2)

    • Hi George, yes, the 1099 vs W2 matters, as having W2 employees constitutes “transacting business”, so you’d need to foreign qualify Subsidiary B in all states with W2 employees. Furthermore, in order to run payroll, you’ll be registering Subsidiary B with the Department of Revenue (or equivalent agency) in each of those states where you’re running payroll. There may also be local registrations needed (county, city, town level payroll taxes). Even though the business is online, that doesn’t escape state laws of “transacting business”. Meaning, running an online business from home (in PA and NC) means that LLC is transacting business in those states. Hope that helps.

11. Does an LLC formed in State 1 whose only purpose is to fully own a different LLC in formed in State 2 need to register as a foreign LLC in State 2?

    • Hi Luis, no, not in this case. A Parent LLC doesn’t need to be registered as a foreign LLC in the state in which it owns subsidiary LLCs. Hope that helps.

      • Thanks so much Matt, very helpful the whole site is pure gold). Follow up question. LLC formed in State A is a creditor to LLC formed in State B (though not an owner/ parent). Does the first LLC need to register as foreign in State B? Thanks again!!!

        • Hi Luis, you’re very welcome. Thank you! It depends on the state laws. However, typically, to bring suit in a state, a company must be registered to do business in that state.

      • Matt,

        Regarding the question from Luis, can the Parent LLC address be in another state or must it be an address in the state in which it was formed?

        • Hi AJ, you’ll want to look at the LLC state filing form in question. Generally, there is a Registered Agent address, a Principal Office Address, and a Mailing Address. Sometimes there are more addresses. Sometimes there are less. Sometimes the addresses have different. It all depends on the state. However, based on this example, the Registered Agent address must be in the state where the Parent LLC was formed. Usually the Principal Office Address can be in any state, however, some states require that address to be in the state. And the Mailing Address can be located in any state. In what state is your Parent LLC located?

12. A friend of mine formed a Foreign LLC in State A where he resides. He then dissolved it. He says he is registered in state B, but problem is he needs a Cert of Formation in state B so he can do a real estate transaction. (In State B) . How does he get for state b? Ty

    • Hi Val, it sounds like your friend formed an LLC in state A, then registered it as a foreign LLC in state B, but then dissolved the LLC in state A. In that case, the foreign LLC registration in state B is now invalid. In order to have an LLC “registered” in state B, they either need to form a new LLC in state B or form an LLC in state A (or state X) and then register it as a foreign LLC in state B. Hope that helps.

13. We formed a c-corp in PA and now one of the employee is taking care of business from NJ. Do we need to take a tax id in NJ or do we need to register this in NJ as Foreign entity. If yes, how do we get tax id and is there any fees for the same.

    • Hi Pankaj, having an employee in NJ means the C-Corp is transacting business in New Jersey and therefore it needs to register as a foreign Corporation in New Jersey. The C-Corp doesn’t need a new Federal Tax ID Number. Yes, there are fees for the foreign qualification. And you will also have to file payroll returns in New Jersey. We recommend speaking with an accountant to get into the details.

14. Thanks for your insightful articles. We are two co-founders, one in CA and other in Utah. Most of our operations (Manufacturing) will be in Utah. We are planning to register the LLC in Utah (from your earlier articles). Some questions:
    1. For selling manufactured goods in CA, do we need to apply for Foreign LLC in CA? And if we sell good to other states, do we need to have foreign LLC for all states? We are planning to sell on Etsy to start with.
    2. Since one co-founder is in CA, does that mean we have to apply for foreign LLC in CA? OR its not required.
    Thanks Matt.

    • Hi Andy, you’re very welcome. Selling goods into another state is interstate commerce and that doesn’t require foreign LLC registration. There might be sales tax filings though. However, the co-founder being a California resident will certainly make the LLC “doing business” in California because of California’s broad rules. I actually just wrote a really in depth comment reply about this here:
      https://www.llcuniversity.com/wyoming-llc/why-you-shouldnt-form-an-llc-in-wyoming/#comment-94277

      Additionally, please see when is an LLC doing business in California?

      So if you form an LLC in Utah, you’ll need to register the LLC as a foreign LLC in California. You’ll need to pay annual franchise tax in California (although California LLC franchise tax is waived the 1st year due to a new law), pay an LLC Estimated Fee (if gross receipts are over $250k), and file an LLC Return of Income (Form 568). Hope that helps.

15. We registered a LLC in state A years ago and now moved to state B. Single member, no employees. All income has been and will be from state A and state B is only the personal residence and no business will be conducted in state B. We provide Marketing and Accounting services online only for clients in state A. Can we just change the physical address on the Annual Report from state A to state B and use a registered agent who has a physical address in state A? Do we have to register as a foreign LLC in state B although there is no income?
    thank you in advance!

    • Hi Ray, if you are running and operating the LLC from your residence in state B, state B will consider your LLC doing business in state B. Therefore, the LLC is supposed to register as a foreign LLC in state B.

16. LLC Old is registered as foreign LLC in several states. It is then acquired in its entirety by LLC New. The ‘subsidiary’ LLC Old will continue to technically exist for a while, but how do we handle the foreign registrations that exist for LLC Old. The LLC New will want to continue to do business in those states but under its own name, not the name of LLC Old. Can the registrations be ‘transferred’ or filed as a ‘name change’?

    • Hi Mary, because Old Company LLC and New Company LLC are separate legal entities, the foreign qualifications cannot be transferred. Old Company LLC would withdraw/cancel its foreign registrations and New Company LLC will foreign qualify in those states. Hope that helps.

17. hi. we are two members of an LLC. one is in columbia but the company is formed in nevada. and i m operating it from other country.
    do we have to form foreign llc in columbia??

    • HI Jamshaid, do you mean that your business partner lives in the District of Columbia? If so, I’m assuming he’s running the business from there? What kind of things to he/she do in DC for the LLC? Does he/she work from home or an office?

18. I love your site! Thank you for sharing your knowledge.

    I am starting an LLC in my state.
    The business will sell merchandise in other states at a temporary location while participating in festivals. The business will be required to collect sales tax, but does not have any employees other than the owners.
    Do I need to obtain foreign LLC status in each state that the business will sell in ?

    Thank you!

    • Thank you Jessica! You’re very welcome. If the events are not regular and recurring, you likely won’t need to register your LLC as a foreign LLC.

      • Thank you.
        Many of the state laws are so vague….
        Where can a person find the definition of “regular and recurring events”? Annually? Biannually? Does this require a state specific lawyer?
        Many Thanks!

        • Hi Jessica, no state defines what is doing business. They usually have a short list of a dozen or so things that are not doing business. The laws are written like this to give the states “wide” interpretation of what constitutes doing business. Regular and recurring isn’t defined. Speaking with an attorney is great idea. You can ask them for specific case law which can further help, too.

19. When setting up a foreign LLC you have the initial fee determined by state, but is that a reoccurring annual fee? For example if I am a resident of SD but currently live in AZ. I would register my LLC in SD and then a foreign LLC in AZ for $150. Would I need to pay annual LLC fees for both my original LLC in SD and my foreign LLC in AZ? Thank you!

    • Hi Laurie, yes, you are correct. However, there is no Arizona LLC Annual Report. There is a publication requirement though (please see Arizona LLC publication requirement). And yes, the South Dakota LLC will still need to file the South Dakota LLC Annual Report.

      You really only have 1 LLC (the South Dakota LLC), however, you have two LLC filings to maintain. Said another way, you have a South Dakota, which by default, can do business in South Dakota. And once it’s registered as a foreign LLC in Arizona, it can do business in Arizona. Hope that helps :)

20. Hi Matt,

    Would like to form an LLC in Delaware, Wyoming or Nevada for online Stock investing, do I still need to file as a foreign LLC in the state where I live?

    • Hi Chris, what state you you in/doing business in?

21. Thanks for all your awesome advice on this site! I have a social media consulting business. My LLC was formed in Illinois, but I have landed a client in GA. Will I need to form a foreign LLC in GA? I read that it’s not necessary unless I have a physical store or selling tangible goods. Is that correct?

    • You’re welcome Kim! No, you don’t need to register your LLC as a foreign LLC if you are rendering services to a client in Georgia (or any state) while you are working from Illinois. In this context, the laws of doing business (which impact where an LLC needs to be registered, if anywhere besides its home state) have to do with where you’re running the business from and engaging in business activities and not where your consulting clients are located. Hope that helps!

22. Hi Matt,

    We have a foreign company located in Libya, We conduct business in the US biding on cars online and shipping them to Libya, Our business deals with transportation & storage within the US.

    My question is : After forming an LLC, Would we be able to open a US bank account online for our company or send someone on the company’s behalf to do so.

    Thank you for taking the time to answer my question. I look forward to your respond.

    • Hi Steve, you can do either one, depending on what bank you want to use. If you’re traveling to the US, definitely speak with the bank ahead of time and email them all documents to review before visiting. We have more information here: How to open LLC bank account for non-US resident.

23. Matt, firstly, thank you for all of your insightful answers to everyone and responding so quickly. My question. I am in state A (California). Buying rental property in state B (Montana). Am I able to open a domestic LLC in state B without having to deal with state A at all? How does this effect filing taxes with both state A and B? Thanks again.

    • Hi Robert, you’re very welcome. Apologies for this delayed reply. Comments and questions have gotten backed up the past couple of weeks. Please see When is an LLC doing business in California. Because California is very strict about “doing business”, you’d either need to form an LLC in California and register it as foreign LLC in Montana or form an LLC in Montana and register it as a foreign LLC in California. Either way, the LLC will need to pay franchise tax (after its first year: see California LLCs and Assembly Bill 85) and file tax returns in California. Regarding filing taxes in both states, you’ll want to work with an accountant. They will most likely apportion the income. Hope that helps.

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