How to open an LLC as a foreign national

Many international investors ask: Can I purchase U.S. real estate under an LLC as a non-U.S. citizen? The answer is yes, and setting up an LLC offers many benefits, especially when investing in rental properties or securing financing options like DSCR loans. However, it’s essential to understand the steps involved and how to structure your LLC to align with your investment goals.

What is an LLC, and why use one for real estate?

An LLC is a legal entity that provides liability protection and tax advantages for business owners. For foreign nationals investing in U.S. real estate, an LLC can shield personal assets from potential lawsuits and offer privacy by keeping the owner’s name off public records. LLCs also simplify estate planning, making it easier to transfer ownership of properties to heirs.

Key benefits of buying real estate through an LLC

• Liability Protection – Separates personal assets from business liabilities, reducing legal risks.
• Tax Efficiency – Pass-through taxation allows profits to flow directly to owners, minimizing U.S. tax obligations.
• Privacy – Property ownership remains anonymous since the LLC’s name appears on public title records instead of the owner’s.
• Estate Planning – Makes transferring property ownership smoother by keeping assets under the LLC’s structure.

Step-by-Step Guide: How to form an LLC as a Non-U.S. Citizen

Setting up an LLC as a foreign national is straightforward, though it requires attention to detail to ensure it’s ready for financing. Here’s a step-by-step process:

1 Find a Property and Get a Purchase Agreement

• Begin by identifying a property that aligns with your investment strategy.
• Negotiate and sign a purchase agreement with the seller. This document will be necessary when applying for financing.

2 Register Your LLC

• Use an online service to register your LLC with the appropriate state and obtain your Employer Identification Number (EIN).
• Alternatively, you can register directly through the state’s business office, though this may take longer.

3 Open a U.S. Business Bank Account

• Some banks allow non-U.S. citizens to open business accounts for LLCs without a Social Security Number (SSN).
• Research banks that offer services tailored to international investors.

4 Set Up Payment Solutions

• Use international-friendly payment platforms to accept rental income and handle expenses. This simplifies cash flow management.

5 Get a U.S. Phone Number

• Use virtual phone services to establish a U.S.-based number for business communications. This helps with banking and tenant interactions.

Can I Get a Mortgage with an LLC as a Foreign Investor?

Yes, foreign investors can apply for U.S. real estate loans under their LLCs, including DSCR loans. These loans are popular among international investors because they focus on the property’s rental income rather than the borrower’s personal income.

Milo’s Loan Process

With Milo, the loan process is quick and efficient. Once your LLC is established, you can:

• Lock Your Rate in Minutes – Milo offers a seamless online experience to secure your mortgage rate.
• Fast Loan Review and Funding – The average loan process, from underwriting to funding, takes 21 days once you have all the required documentation.

Required Documents for a DSCR Loan

• LLC Formation Documents – Include your articles of incorporation and EIN confirmation.
• Purchase Agreement – Show the terms agreed upon with the seller.
• Property Income Details – Provide information on expected rental income if available.

The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.