What Is an LLC in the USA? A Clear Guide for Argentinians
An LLC can help you operate an international business from Argentina, but it does not eliminate tax obligations or guarantee banking access. We explain how it works and what you should validate before creating one.
An LLC in the USA is a business entity created under the law of a US state that generally separates the business’s obligations from those of its owners. LLC stands for Limited Liability Company. For a founder residing in Argentina, it can facilitate certain international operations, but it does not guarantee a bank account, access to payment processors, or lower taxes.
How an LLC Works
An LLC is a flexible structure regulated primarily by each state, rather than an identical legal form throughout the United States. Therefore, its formation, maintenance, fees, and reporting requirements depend on the state you choose.
According to the IRS, in its official explanation of LLCs, owners are called members. An LLC can have one member or multiple members.
Limited liability is intended to separate business assets from personal assets for certain debts or obligations. However, that protection is not absolute: it may depend on the members’ conduct, documentation, separation of funds, and applicable law. An attorney should assess specific situations.
The LLC and Its Federal Tax Treatment
One important characteristic is that “LLC” describes a state legal entity, but does not by itself determine a single federal tax classification.
According to the IRS, a domestic single-member LLC is generally treated by default, for certain federal taxes, as an entity disregarded as separate from its owner. An LLC with two or more members is generally classified as a partnership for federal tax purposes unless it makes a valid election to receive different treatment.
These rules have nuances and do not determine how a person residing in Argentina will be taxed. The business activity, clients, location of management, type of income, and possible tax elections can change the analysis.
What It Can Offer an Argentinian Founder
An LLC can be useful as an operating vehicle for software businesses, consulting firms, agencies, content businesses, e-commerce businesses, or other international services. Its possible uses include:
- Entering into commercial agreements through a US entity.
- Issuing commercial documentation from the company.
- Separating business operations and records from personal transactions.
- Applying for business banking or financial services compatible with nonresident owners.
- Connecting payment processors when the company and its activity are eligible.
None of this implies automatic approval. Banks and processors apply their own identity, activity, residency, risk, and compliance policies, which may change. An LLC also does not guarantee credit, confidentiality, growth, or a lower tax burden.
What You Normally Need to Create One
The exact procedure depends on the Secretary of State or equivalent agency in the state you choose. In general, it usually includes:
- Choosing a state and checking name availability.
- Appointing a registered agent with a valid address in that state.
- Filing the state formation document.
- Preparing an operating agreement to organize management and ownership.
- Applying for the identifiers needed to operate and comply.
- Maintaining the required reports, fees, and records.
State fees are paid separately and become nonrefundable once the application is filed. Before moving forward, you should verify requirements and costs directly with the authority in your chosen state. The SBA explains business structures, although the relevant state authority will be the decisive source for formation.
If you would like us to assist you with the administrative side, you can review our plans. We cannot guarantee outcomes from authorities, banks, or third-party providers.
EIN, ITIN, and Other Concepts You Will Encounter
The EIN (Employer Identification Number) is a business’s federal tax identification number with the IRS. It is not equivalent to a bank account and does not prove that an activity is authorized. You can learn more in our guide on what the EIN is and how to apply for it from outside the United States.
The ITIN (Individual Taxpayer Identification Number) is a tax identification number that the IRS issues to certain individuals who need federal tax identification and are not eligible to obtain a Social Security number. Not every LLC owner needs one: it depends on the applicable filings, elections, and obligations.
You may also encounter Form 5472, an IRS information return used in certain cases to report transactions involving certain US corporations with foreign owners or related parties. A foreign-owned single-member LLC may be subject to specific rules. Applicability should be confirmed with a US tax professional because it depends on the classification and the transactions conducted.
Obligations in the United States and Argentina
Creating an LLC does not end with state approval. Depending on the case, there may be:
- Periodic state fees and reports.
- Federal information returns or tax returns.
- Accounting records and transaction documentation.
- Registered agent renewal.
- Requirements related to licenses, activity, or presence in other states.
- Periodic reviews of current federal and state rules.
Since March 2025, FinCEN has exempted entities created in the United States, including domestic LLCs, from filing beneficial ownership information (BOI) under the Corporate Transparency Act. Entities formed abroad and registered to operate in the United States may still be subject to these requirements. Because these rules can change, check the current official information from FinCEN when forming or maintaining the company.
In addition, if you retain your tax residency in Argentina, the existence of a US entity does not eliminate your local obligations. Ownership of the LLC, income, distributions, assets, international transactions, and the way you manage the business may be relevant. ARCA includes individuals domiciled in Argentina who own interests in foreign entities within its reporting regime for equity interests.
You should not automatically apply explanations prepared for residents of Spain, Mexico, or other countries. Argentinian regulations and ARCA criteria must be analyzed separately with an accountant or tax advisor familiar with US structures.
How to Choose the State
There is no universally “best” state for every founder. To decide, you should compare:
- The company’s actual activity.
- Where it will have a presence, employees, inventory, or operations.
- State formation and maintenance costs.
- Reporting frequency.
- Available record privacy and its legal limits.
- The need to register in another state where it actually operates.
Choosing a state only because it is popular can create additional costs or registration requirements. The decision should be based on the planned operation and validated with professional advice when there are legal or tax implications.
Common Mistakes When Evaluating an LLC
Thinking It Automatically Reduces Taxes
The tax burden depends on the owner’s residency, the source and type of income, the tax classification, and other factors. An LLC alone does not guarantee tax savings.
Mixing Personal and Business Funds
Separating accounts, contracts, invoices, and records helps maintain order and support the entity’s independence. It also makes it easier to prepare returns and respond to reviews.
Opening It Without Planning for Maintenance
Before forming it, estimate the recurring obligations and determine who will track deadlines and documents. Forming the entity is only the first step.
Assuming Stripe or a Bank Will Approve the Application
Each provider conducts its own assessment and may request additional documentation. We do not guarantee approvals from banks or payment processors.
Does It Make Sense for Your Business?
It may make sense if you already have a specific international operation, clients who require a business entity, or a clearly defined operational need. You should also consider the costs, compliance in the United States, and the tax impact in Argentina.
Before deciding, define what problem the LLC would solve, which external services you need, and how much maintenance work you can take on. We can help you with the administrative side of the process, but the legal and tax suitability must be reviewed individually.
Notice: we are not a law firm or accounting firm, and we do not provide legal, tax, or investment advice. Each case must be validated with qualified professionals in the United States and Argentina before forming, choosing, or using an LLC.
Frequently asked questions
What is an LLC, and what legal effects does it have in the United States?
An LLC is an entity created under the law of a US state to own assets, enter into contracts, and conduct activities through one or more owners called members. Its legal existence begins when the state formation document is filed and approved, not when the EIN is obtained. Limited liability generally separates certain business obligations from personal assets, although it does not protect personal guarantees, fraud, or a person’s own actions. The SBA describes business structures, while the IRS clarifies that LLC is not a single federal tax classification. Therefore, forming one legally organizes the business, but does not guarantee tax savings, a bank account, financing, Stripe, or immigration rights.
How do you form an LLC from Argentina?
A person residing in Argentina can generally form an LLC without traveling to the United States, subject to the rules of the chosen state. The usual sequence consists of selecting a state and name, appointing a registered agent, filing the articles of organization, obtaining state approval, preparing the operating agreement, and applying for the EIN. Annual reports, fees, licenses, and possible registrations in other states must then be reviewed. The SBA explains business registration, but the state authority controls formation. A passport, contact address, member information, and description of the activity are generally required. Being a foreign member does not turn the LLC into an automatic tax solution or ensure access to US banks or payment processors.
How does an LLC affect the worldwide income of an Argentinian resident?
An LLC does not exclude its results from the Argentinian tax system. A person who retains tax residency in Argentina is generally subject to income tax on income from Argentinian and foreign sources, in accordance with Article 1 of the Income Tax Law. The Argentinian characterization of the LLC, the timing of income recognition, the activity conducted, distributions, compensation, and taxes paid in the United States must be analyzed. Where decisions are made and where services are actually performed may also have an impact. The US classification as a disregarded entity, partnership, or corporation is relevant background, but does not by itself determine the Argentinian treatment or the tax period in which it must be reported.
How are ownership interests and LLC assets reported to ARCA?
The ownership interest must be analyzed in the applicable Argentinian returns of the member, especially income tax and personal assets tax, taking into account ownership, valuation, distributions, credits, and balances held abroad. You should not assume that reporting only the money received reflects the entire tax position. You must also verify whether any reporting regime administered by ARCA applies; the agency publishes the covered persons and requirements of the reporting regime for equity interests. Basic documentation includes articles of organization, operating agreement, account statements, contributions, withdrawals, US returns, and details of taxes paid. The specific scope depends on the Argentinian classification of the LLC and current regulations; US forms do not replace the filings required by ARCA.
What taxes or forms might the LLC have in the United States?
The outcome depends on the number of members, the tax election, the activity, and the source of income. By default, a single-member LLC is generally a disregarded entity and a multi-member LLC is generally classified as a partnership, unless a different election is made, according to the IRS. A US single-member LLC with a foreign owner files Form 5472 attached to a pro forma Form 1120 when it has reportable transactions, in accordance with the official instructions. A partnership generally uses Form 1065. There may also be withholding, taxes on income connected with a US trade or business, payroll taxes, and state obligations. Having no federal tax due does not mean there are no information returns, fees, or recordkeeping requirements.