Why Canadians Form US LLCs
Canadian entrepreneurs form US LLCs for several concrete reasons:
- Sell on Amazon.com without 24-30% tax withholding
- Accept USD payments through Stripe/PayPal at domestic rates
- Access US venture capital and business credit
- Separate US business activities from Canadian tax reporting
- Credibility with US clients (many prefer working with US entities)
What You Need to Apply
As a Canadian, you need:
- Valid Canadian passport (driver's license not accepted)
- A formed US LLC (Wyoming, Delaware, and New Mexico are popular choices)
- US registered agent address (included with most LLC formation services)
- Your Canadian home address
- Email for communications
Banking: Options That Work for Canadians
Canadians have good options for US business banking:
- Mercury: Opens accounts 100% online, no US visit required, popular with Canadian founders
- Relay: Similar to Mercury, good integration with accounting software
- Wise Business: Not a US bank but provides US account details, easiest option
- RBC Bank (Georgia): Canadian-owned US bank, may be easier if you have RBC Canada relationship
- TD Bank: Has US presence, some branches work with Canadian LLC owners
Tax Implications: Canada-US Treaty
The Canada-US tax treaty affects how your LLC income is taxed. Key points:
- Single-member LLC is 'disregarded' for US tax — income passes through to you
- You must file US Form 5472 annually (foreign-owned LLC disclosure)
- You must file a pro-forma 1120 with the 5472
- Canadian residents report worldwide income to CRA, including US LLC income
- Foreign tax credits may apply to avoid double taxation
- Deadline: Form 5472 is due April 15 (US) — separate from your Canadian return
Common Canadian Use Cases
Most Canadians getting EINs through us fall into these categories:
- Amazon FBA sellers accessing the US marketplace
- E-commerce businesses wanting US payment processing
- Freelancers/consultants with US clients
- SaaS founders raising US venture capital
- Real estate investors purchasing US property