US LLC for Canadian residents
Canadian sellers on Amazon.com, consultants with US clients and e-commerce brands often ask for a US LLC because it is cheap and simple. For Canadians specifically, the answer needs care: the Canada Revenue Agency treats a US LLC as a corporation, while the IRS treats a single-member LLC as transparent. That mismatch can cause double taxation on profits that are taxable in the US.
At a glance for Canadian founders
Incofile forms LLCs and C-Corporations in all 50 states and will tell you plainly which fits. For many Canadian businesses with no US-taxable income, an LLC still works well; for US-taxable profits, a C-Corporation or a US LLP/LP structure is usually better.
The Canadian LLC problem, explained
Because the CRA sees the LLC as a corporation, US tax you pay personally on the LLC's income may not be creditable in Canada the way you expect, and distributions can be taxed again as dividends. The Canada–US treaty's "fiscally transparent entity" rules help in some cases but not all. The result is that an LLC with US-taxable profits can cost a Canadian owner more tax than a C-Corporation would.
- No US-taxable income (services from Canada, no US warehouses): LLC usually fine
- US-taxable profits (FBA inventory, US contractors, US office): compare C-Corp or LLP first
- Owned by a Canadian corporation: a US C-Corp subsidiary is the conventional structure
When an LLC still makes sense for Canadians
Holding a US bank and Stripe account, qualifying as a US seller on marketplaces that require a US entity, or giving US clients a domestic counterparty — where the actual work happens in Canada and no US permanent establishment arises. In that case the LLC is a convenient shell with an annual Form 5472 obligation and little else.
US filings for a Canadian-owned entity
LLC (single-member): Form 5472 with pro-forma 1120 by April 15 each year ($25,000 penalty if missed), state annual report and registered agent renewal. C-Corporation: Form 1120 annually, Delaware franchise tax or state equivalent, and Form 5472 if 25%+ foreign-owned. Canadian side: T1134 foreign affiliate reporting may apply to either structure.
Banking and payments
Canadians have the smoothest onboarding of any non-US group: Mercury, Relay, Wise, Stripe and PayPal all accept Canadian-resident owners. Cross-border transfers between the US entity and your Canadian accounts should be documented as distributions, salary or inter-company charges.
Which state should Canadian founders choose?
What Incofile does for you
- Form the LLC in your chosen state
We prepare and file the formation documents, act as organiser and provide the registered agent in that state — your home address stays off the public record.
- Obtain the EIN without an SSN
As an IRS third-party designee we apply for your Employer Identification Number without a Social Security Number. Typical issue time is 1–3 weeks.
- US business address and mail scanning
A real US street address for banks, marketplaces and payment platforms, with every letter scanned to your portal ($155/year).
- Operating agreement and banking resolution
The documents banks, Amazon, Walmart and payment processors ask for, prepared in your company's name.
- Compliance calendar in your client portal
Annual report deadlines, registered agent renewal and tax-filing dates, with reminders before each one — plus 24/7 access to every document.
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US LLC from Canada — frequently asked questions
Should a Canadian form an LLC or a C-Corp?
If the business will have US-taxable profits, usually a C-Corp (or an LLP/LP with advice). If it will not — services delivered from Canada, no US presence — an LLC is simpler. Speak with a cross-border accountant; Incofile forms whichever you choose.
Can my Canadian corporation own the US entity?
Yes. A Canadian corporation commonly owns a US C-Corp subsidiary; owning an LLC is possible but has the same treatment issues.
Do I need an ITIN?
Not to form the entity or get an EIN. An ITIN is needed only if you have to file a personal US return.
What about sales tax for Amazon FBA?
Amazon collects sales tax for marketplace sales in nearly every state; inventory in US warehouses can still create income-tax nexus, which is exactly the situation where the LLC-vs-C-Corp choice matters.
How long does formation take?
State approval 1–5 business days in most states; EIN 1–3 weeks without an SSN.