How To Start Arizona LLC as a Non-Resident (Clear Guide)

Arizona LLC non resident

Forming an Arizona LLC as a foreigner is an excellent choice if you’re looking to start a business. An LLC, or Limited Liability Company, offers limited liability protection and pass-through taxation benefits.

Establishing an Arizona LLC allows you, as a non-resident, to leverage these advantages and take advantage of the state’s business-friendly environment.

In this guide, I’ll explain how to form an LLC in Arizona as a non-resident.

Key Highlights: Arizona LLC as a Non-Resident

Starting an Arizona LLC as a non-resident involves appointing a registered agent with an Arizona address and obtaining a Foreign LLC Qualification if your LLC is from another state. Among all the services, I found Northwest Registered Agent the best for this.

My favorite part about forming an LLC in Arizona is that the state has a straightforward and streamlined process for LLC formation, making it accessible for non-residents.

Arizona LLC Non-resident Requirements

If you are a non-resident looking to start an LLC in Arizona, you must meet certain requirements.

I explained these requirements below:

Registered Agent

Every LLC in Arizona is required to have a registered agent. A registered agent is a person or entity that receives legal and official documents for your LLC.

As a non-resident, you can hire a registered agent as a point of contact between your LLC and the state. You can find a registered agent online or through an LLC formation service.

Foreign LLC Qualification

If you are an LLC formed in another state and want to do business in Arizona, you must qualify as a foreign LLC. You can do this by filing a Foreign LLC Registration with the Arizona Corporation Commission. This process involves submitting the necessary documents and paying a fee.

Tip

You don’t need to live in Arizona, maintain a physical office, or possess extensive local business experience to set up and run an LLC, which is cool! However, it’s important to meet Arizona’s legal requirements for seamless LLC operation.

Employer Identification Number (EIN)

An EIN is a unique nine-digit number issued by the IRS to identify your LLC for tax purposes. You can apply for an EIN online through the IRS website as a non-resident. You will need an EIN to open a business bank account, hire employees, and file taxes.

Business License

Depending on the nature of your business, you may need to obtain a business license to operate in Arizona. The requirements for a business license vary depending on the industry and location of your business. You can check with the Arizona Department of Revenue to determine if your business needs a license.

Tax Registration

As an LLC in Arizona, you are required to register for state taxes. This includes sales tax, income tax, and other applicable taxes. You can register for taxes online through the Arizona Department of Revenue.

Critical Note: Here’s What You Do Not Need Initially as a Non-resident Business Owner

Firstly, you don’t need to reside in or have an office in Arizona to establish your LLC. You can manage it remotely from anywhere globally.

Secondly, LLC members or managers don’t need to be Arizona residents. You can operate your Arizona LLC without living in the state.

Thirdly, while helpful for transactions, a local bank account isn’t required initially. Use your existing account until needed.

Lastly, no prior business experience in Arizona is needed. The state offers a supportive environment for all entrepreneurs.

Steps on How to Form an LLC in Arizona as a Non-resident

Step 1. Selecting Your Business Name (new or existing)

First, I would begin by searching the name on the Arizona Corporation Commission website to ensure it’s unique and available. You can choose a new name or use an existing one.

Arizona Business Name Search

Ensure that another Arizona business does not already use the name you select.

You can check your desired name’s availability by searching on the Arizona Corporation Commission website.

Step 2. Appointing Arizona Registered Agent (I use Northwest)

Arizona law requires all LLCs to have a registered agent. As I highlighted earlier, the registered agent is a person or company that receives legal documents and other important correspondence on behalf of your business.

I recommend using Northwest Registered Agent as your registered agent.

Read my Northwest Registered Agent Review here.

You can start with them for as little as $39, and they ensure that all legal documents and important correspondence are handled promptly and efficiently.

Northwest registration

Their reliable service guarantees compliance with Arizona law, giving me peace of mind while I focus on growing my business.

Step 3. Sign up For Northwest Registered Agent

To sign up for Northwest Registered Agent services, go to their website and click on the “LET’S GET YOU STARTED” button. This will take you to a page where you can select the services you need.

Choose your business entity as LLC and select Arizona (of course!) as your preferred state.

Northwest agent Arizona

Step 4. Enter Your New/Existing Company Details

After selecting your services, you must enter your new or existing company details. This includes your business name, address, and other essential information. You can choose the physical and mailing addresses you want for the business.

LLC Company details Northwest

If unsure about your business purpose, toggle “Use Generic Business Purpose.”

Northwest Registered Agents allows you to use their address as your business address, eliminating the hassle of securing a separate US address for your company in Arizona.

Step 5. Enter The Management For Your LLC

You’ll also need to enter the management for your LLC. This includes the members or managers who will run your business. If your business is a one-person show, just stick with one member and use your name.

LLC management Northwest

Step 6. Fill in Your Contact Details

Next, you’ll need to fill in your contact details, including your email address, phone number, and other information.

LLC contact details Northwest
Note

These details will serve as your primary communication between you and Northwest, and NOT with Arizona State. So, it is safe to use your local address.

Step 7. Setup Your Account with Northwest Registered Agent

After entering all your information, you must set up your account with Northwest Registered Agent using your email and preferred password. This will allow you to access their services and complete the following steps to form your Arizona LLC.

account set up Northwest

Step 8. Get Your Business Identity (optional)

You can toggle this on to add the Northwest Business Identity option for your LLC.

It includes the following, free for 90 days:

  • Domain name registration – 1 Free Year
  • Website – hosted by us, owned by you
  • Business email address
  • Business phone
Business Identity Northwest

Step 9. Getting Your Tax ID or EIN – optional

If you want your LLC’s tax ID (EIN), you can do so through Northwest Registered Agent. They will help you complete and submit the necessary forms to the IRS. It’s pretty easy to get this on your own, but if you’d like to include it in your order, that’s also great!

Just toggle on the “Tax ID” and select “Do NOT Have Social Security Number.

Tax ID or EIN Northwest

Step 10. Checkout/Payment (Congratulations!)

Finally, you’ll need to check and make payment to complete the process of forming your Arizona LLC.

Once you’ve done this, congratulations! You can now open a Stripe account and start.

payment information Northwest

Enter your valid card information, then click Done!

Arizona LLC Non-resident Benefits

If you are a non-resident business owner looking to start an LLC, Arizona has several benefits that make it an attractive option.

Here are some of the benefits and why they matter:

No Corporate Income Tax on LLCs

Arizona does not impose a corporate income tax on LLCs. Instead, profits pass through to the members, who report them on their personal income tax returns.

This tax structure simplifies tax obligations and can lower overall taxes for non-resident business owners. This benefit is especially relevant for non-resident business owners who may have to deal with complicated tax laws in their home country.

Limited Liability Protection

Forming an LLC in Arizona protects owners with limited liability, safeguarding personal assets from business debts and liabilities. This protection is crucial for non-resident business owners as it minimizes personal financial risk, ensuring that personal assets such as homes and savings are not at risk if the business incurs debt or legal issues.

Limited liability protection is especially important for non-resident business owners who may not be familiar with local laws and regulations.

Ease of Formation and Maintenance

Arizona offers a straightforward and efficient process for forming and maintaining an LLC, with relatively low filing fees and minimal ongoing compliance requirements. This benefit is especially relevant for non-resident business owners who may not have the time or resources to navigate complex legal and administrative procedures.

Tip

Arizona’s streamlined processes mean lower administrative burdens and costs for non-resident business owners, making it an attractive option to run a business from abroad without extensive local bureaucracy.

Strong Asset Protection Laws

Arizona has robust asset protection laws that protect the assets of businesses and their members from creditors. These laws benefit non-resident business owners by providing an additional layer of security against legal claims and creditors, safeguarding business assets.

This benefit is especially relevant for non-resident business owners who may not have a physical presence in Arizona and may be vulnerable to legal claims and lawsuits.

No Residency Requirements

Arizona does not require LLC members or managers to be state residents. This benefit allows non-resident business owners to form and manage an LLC without needing to relocate or maintain a physical presence in Arizona.

This benefit is especially relevant for non-resident business owners who may not want to uproot their lives or businesses to move to Arizona.

Privacy Protection

Arizona allows LLCs to be formed without disclosing member names in public records. For non-resident business owners, maintaining privacy can be a significant concern. Arizona’s privacy protection helps keep personal information confidential, reducing the risk of identity theft and unsolicited attention.

This benefit is especially relevant for non-resident business owners who may not want their personal information publicly available.

Flexibility in Management

Arizona LLCs offer flexibility in management structures, allowing members to decide how the business will be managed by the members themselves or appointed managers. This flexibility benefits non-resident business owners who may prefer to delegate management responsibilities.

This benefit is especially relevant for non-resident business owners who may not have the time or resources to manage their businesses’ day-to-day operations.

Favorable Legal Environment

Arizona’s legal environment is generally favorable to businesses.

With well-defined business laws and a judiciary that understands corporate matters, this supportive legal environment gives non-resident business owners confidence that their business dealings will be conducted fairly and that any legal disputes will be resolved efficiently.

This benefit is especially relevant for non-resident business owners who may not be familiar with local laws and regulations.

Ease of Foreign Qualification

An Arizona LLC can easily register for business in other states or countries through foreign qualifications. This flexibility is important for non-resident business owners who may want to expand their operations beyond Arizona, allowing for smooth entry into new markets without forming a new legal entity in each jurisdiction.

This benefit is especially relevant for non-resident business owners wanting to take advantage of new business opportunities in other states or countries.

How Much Does it Cost in Total to Form an LLC in Arizona as a Foreigner?

The total cost of forming an LLC in Arizona as a non-resident includes the state filing fee, registered agent fee, and any additional services you choose.

The state filing fee is $85, and the registered agent fee is $125 per year. If you use Northwest Registered Agent, the initial cost to form your non-resident LLC is $124 (excluding an EIN/Tax ID). If you opt for an EIN, the total cost is $324, with the EIN service being a one-time fee.

Arizona LLC Taxation/Taxes for Non-US Residents – How Does it Work?

If you are a non-US resident planning to start an Arizona LLC, it is important to understand the taxation system. Arizona LLCs have a default tax status as pass-through entities, which means the LLC’s income is reported on the member’s tax returns. This means that as a non-US resident, you will be taxed on the profits and losses of your LLC in the same way as US residents.

However, the tax rate for non-US residents may differ from that of US residents. The corporate tax in the United States is 21%, and the personal income tax can be between 10% and 37%.

LLC owners may also take periods drawn from the company’s net income and pay taxes. It is important to note that the tax rates for non-US residents may vary depending on their country of origin, so it is advisable to consult with a tax professional.

In addition to the state income tax, LLCs pay transaction privilege tax, local city/county taxes, and occasionally industry-specific taxes. As a non-US resident, you must also comply with any tax requirements in your country of origin.

Keeping up with all tax filings and payments is important to avoid penalties or legal issues.

When starting an Arizona LLC as a non-US resident, it is important to understand the operating agreement, members, management structure, contributions, profits and losses, voting rights, and ownership percentages.

Disadvantages of Forming an LLC as a Non-resident in Arizona

While forming an LLC in Arizona as a non-resident can have benefits, there are also some disadvantages.

Here are a few things to keep in mind:

Registered Agent Requirement

Arizona requires LLCs to have a registered agent with a physical address. As a non-resident, you must hire a registered agent to act as your LLC’s point of contact with the state. This can add an extra expense to your LLC formation.

Additional Taxes

As a non-resident, you may be subject to additional taxes beyond the standard LLC taxes. For example, if you have employees or own property in Arizona, you may be subject to state and local taxes. You must also consider federal taxes, which can be more complicated for non-residents.

Difficulty Opening Bank Accounts

Some non-resident LLC owners may have difficulty opening bank accounts in the United States. This can be due to stricter banking regulations for non-residents, and many banks prefer to work with customers who have a physical presence in the United States.

Limited Liability Protection

While an LLC can provide limited liability protection, this protection may not extend to non-residents in certain situations. For example, if you are personally involved in the LLC’s operations in Arizona, you may not be protected from personal liability.

What’s The Best Bank for Non-US-residents?

Choosing the right bank can be crucial when starting an Arizona LLC as a non-resident. You need a bank that can provide the necessary services and support to run your business smoothly. Among the notable options for non-US residents are Mercury, Wise, Relay, and Bluevine.

Mercury is my favorite and the best bank for non-US residents.

I have used it for over five years and can attest to its reliability and efficiency. Mercury offers services tailored to non-US residents’ needs, including free wire transfers, no monthly fees, and no minimum balance requirements.

Mercury also provides a user-friendly online platform to manage your account anywhere. Using the platform, you can easily transfer funds, pay bills, and monitor transactions. Additionally, Mercury offers excellent customer support, and you can reach their team via email, phone, or live chat.

In addition to Mercury, several other banks are worth considering. Wise is a popular choice for non-US residents due to its low fees and ability to hold multiple currencies. Relay and Bluevine are also worth mentioning, offering various services designed specifically for small businesses.

Frequently Asked Questions

Can a non-resident open an LLC in Arizona?

Yes, non-residents can open an LLC in Arizona.

What are the steps for a non-resident to establish an LLC in Arizona?

The steps for a non-resident to establish an LLC in Arizona are similar to those for a resident. You must choose a name for your LLC, appoint a registered agent, and file the Articles of Organization with the Arizona Corporation Commission.

Can I use a registered agent for my Arizona LLC registration as a non-resident?

You can use a registered agent for your Arizona LLC registration as a non-resident. Having a registered agent in Arizona is required by law.

What are the annual costs associated with maintaining an Arizona LLC for non-residents?

The state fee for LLC formation in Arizona is $50. Most LLCs also need to pay to publish an announcement of their LLC formation in a local newspaper, which can cost anywhere from $60 to $300. LLCs in Arizona don’t file annual reports, so you won’t need to pay an annual report fee.

Is a physical presence required in Arizona to form an LLC as a non-resident?

No, a physical presence is not required in Arizona to form an LLC as a non-resident. You can complete all the necessary paperwork and filings online.

What’s the best method to open an Arizona LLC non-resident bank account?

The best way to open an Arizona LLC non-resident bank account is to use a bank specializing in serving non-resident LLCs, such as Mercury.

What are the best states to form an LLC as a non-resident?

New Mexico, Wyoming, Delaware, and Nevada are often considered the best states to form an LLC as a non-resident due to their favorable tax laws and business-friendly regulations.

Can a non-resident Arizona LLC owner hire employees in the US?

Yes, a non-resident Arizona LLC owner can hire employees in the US. However, certain tax and legal implications should be considered before doing so.

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