Ever dreamed of running your business from a beach in Bali while serving clients in New York? But what about the legal paperwork, taxes, or even getting an U.S. bank account as an EU resident?
Here’s how to skip the confusion, avoid the traps, and set up your American company the right way.
Start with structure, not dreams
Before you start designing logos or imagining your first U.S. clients, you need to build a legal and strategic foundation. Too many digital nomads rush into launching a U.S. business without understanding the legal implications—only to face surprise tax bills, frozen bank accounts, or compliance headaches later.
Think of your business structure like the frame of a house: the stronger it is, the easier everything else becomes. Your structure determines your taxes, your legal protection, and even how credible you appear to clients. It gives you:
- Legal protection – The right structure can shield your personal assets from lawsuits and debts.
- Tax efficiency – Choosing wisely can save you thousands every year.
- Credibility – U.S. clients often prefer working with companies registered in their own country.
The five legal steps no one talks about
Most “how to start a U.S. business” guides cover the obvious—pick a name, file paperwork—but skip on important details. Here’s a couple tips you won’t see in the typical checklist:
Why I chose an LLC (and how you can too)
For most digital nomads, a Limited Liability Company (LLC) is the golden middle ground. It’s simple to maintain, flexible for international founders, and offers liability protection without the heavy tax burden of a corporation.
Three reasons an LLC works for digital nomads:
- Pass-through taxation – You’re not taxed twice like a corporation.
- Low maintenance – Fewer formalities than a corporation.
- Flexibility – Easier for non-U.S. residents (for residents also) to own and manage.
Tip: Choose your state carefully. Each has different laws and some are better for managing businesses.
U.S. taxes decoded for EU founders
If you live in the EU and own a U.S. LLC, your taxes depend on both where you earn money, not just where your company is registered. The IRS has some tools for simplifying foreign taxation, like the Foreign Income Exclusion and the Foreign Tax Credit (FTC).
Beware: You may also owe taxes in your home country under its own rules. Check your country’s rules before starting an LLC.
Key things to check:
- Whether your income is “U.S. sourced” or “foreign sourced.”
- If your country has a tax treaty with the U.S.
- Reporting obligations in both jurisdictions.
Avoiding the three biggest setup mistakes
Even smart entrepreneurs fall into these traps:
- Mixing personal and business finances – This can destroy your liability protection.
- Ignoring state-specific rules – Annual report fees, franchise taxes, and compliance vary.
- Skipping a registered agent – You need a U.S. address for legal notices; a registered agent solves this.
Avoiding these can save you from costly penalties and unnecessary stress.
Banking, residency, and the real cost of going global
One of the biggest surprises for EU founders is opening a U.S. bank account. Many banks require you to be physically present, but fintech solutions like Wise Business are changing the game. Residency is another myth to clear up—you do not need to live in the U.S. to own a company there (although it does simplify the process).
If you start with the right structure, understand your tax obligations, and avoid the common pitfalls, you can operate confidently from anywhere in the world. Your future clients will thank you. And so will your future self.
