How to start a US LLC from UAE: Costs, catches, States that actually make sense

Over five million new businesses were registered in the United States in 2024, according to US Census Bureau data. A significant and growing number of those applications came from people who have never set foot in America.

For entrepreneurs based in the UAE, the appeal is straightforward. A US Limited Liability Company—an LLC—unlocks access to Stripe, US business banking, American clients who prefer paying domestic invoices, and a layer of credibility that a freezone licence alone cannot provide. The formation process can be completed entirely online, no visa required.

But the cost of getting it right varies dramatically depending on which of the 50 states you choose. According to LLCBuddy, a business formation platform founded by Steve Goldstein that maintains state-by-state data on LLC filing fees, registered agent requirements, and ongoing compliance costs, the range stretches from $35 in Montana to $500 in Massachusetts—before annual maintenance enters the picture.

That range matters. For a Dubai-based consultant billing American clients, or a Sharjah e-commerce seller shipping to the US market, picking the wrong state can mean hundreds of dollars in unnecessary annual fees. Picking the right one can mean a lean, compliant US presence that costs less than a single month’s coworking desk in JLT.

The first thing UAE entrepreneurs discover—and the reason the whole thing works—is that US law does not require LLC owners to be American citizens or residents. A UAE national, a British expat in Abu Dhabi, an Indian freelancer in Dubai: all can legally form and own a US LLC. No visa, no Social Security Number, no green card.

The process involves filing Articles of Organisation with the Secretary of State in your chosen state, appointing a registered agent with a physical address in that state, and obtaining an Employer Identification Number (EIN) from the IRS. The EIN functions like a tax ID for the business and is required to open a bank account. Non-residents without a Social Security Number can still obtain one—it just takes longer, sometimes several weeks by post or fax.

The registered agent requirement catches some UAE founders off guard. Because you need someone physically located in the state to receive legal correspondence on behalf of your LLC, you will almost certainly need to hire a registered agent service. These typically cost $100 to $300 per year. Budget for it. There is no workaround.

Delaware, Wyoming, and New Mexico come up in almost every conversation about US LLC formation for non-residents. Each has a reputation. Not all of those reputations are equally deserved.

Delaware is the prestige pick. Its Court of Chancery is the gold standard for business litigation, and 81 per cent of US IPOs in 2024 incorporated there, per the Delaware Division of Corporations. But prestige has a price — one that Goldstein says is rarely justified for non-resident founders who aren't raising institutional capital. The filing fee is $90, which sounds modest, until the $300 annual franchise tax arrives every June. For a startup raising venture capital, that’s pocket change. For a UAE freelancer running a one-person consultancy, it’s money spent on a legal brand name the clients will never ask about.

Wyoming offers a different equation. Formation costs $100, the annual report fee is $60, there is no state income tax, and owner information stays off public records. Privacy protections in Wyoming are among the strongest in the country. For a UAE-based entrepreneur who wants a clean, inexpensive US entity primarily for payment processing and American market access, Wyoming is difficult to beat.

New Mexico is the budget option: $50 to form, no annual report requirement, no ongoing state filing fees. The tradeoff is minimal legal precedent and fewer banks familiar with New Mexico LLCs. But for someone testing the US market before committing significant capital, the low barrier to entry has real value.

Then there are the states to avoid. California charges a $70 formation fee that looks attractive until the $800 annual franchise tax lands—due even if the LLC has zero revenue. New York requires new LLCs to publish formation notices in local newspapers, a requirement that can add $1,000 to $2,000 in costs, particularly in the New York City area. These are not states for lean international operations.

The tax situation for UAE-based LLC owners is often better than expected. A single-member LLC owned by a non-US resident, with no US employees and no physical US presence, is generally treated as a “disregarded entity” by the IRS. Foreign-sourced income—money earned from clients outside the US, or from services delivered remotely—may not be subject to US federal income tax at all.

The UAE has no personal income tax, which simplifies the other side of the equation considerably. There is no double taxation treaty between the UAE and the US, but the absence of UAE income tax means there is effectively nothing to double.

However, reporting requirements still apply. Foreign-owned single-member LLCs must file Form 5472 with the IRS annually, along with a pro forma Form 1120. The penalty for late filing starts at $25,000. This is a compliance obligation, not a tax payment, but missing it is expensive. Most cross-border accountants charge $500 to $1,500 per year to handle the filing.

The introduction of Corporate Tax in the UAE in 2023, set at 9% on profits exceeding Dh375,000, adds another layer. Income earned through a US LLC by a UAE tax resident may need to be reported under the UAE’s new framework depending on the structure. The interaction between a US disregarded entity and UAE corporate tax rules is an area where professional guidance is not optional—it is essential.

Opening a US business bank account remotely is the single biggest friction point for UAE-based founders. Traditional banks—Chase, Bank of America, Wells Fargo—almost universally require an in-person visit to a US branch. If you are already planning a business trip to New York or Miami, schedule a branch appointment and bring your passport, EIN letter, Articles of Organisation, and operating agreement.

If an in-person visit is not feasible, fintech alternatives exist. Mercury, Relay, and Wise Business have all served non-resident LLC owners, though approval is not guaranteed and policies change frequently. Having clean formation documents, a clear business description, and a professional website can improve approval odds significantly.

Forming the LLC is step one. Keeping it alive is step two — and the step where Goldstein sees most non-resident founders slip up. Most states require annual or biennial reports—a filing that confirms the LLC's details are current. Miss the deadline, and the state will revoke your LLC's good standing. Continue ignoring it, and the state will dissolve the entity entirely.

Four states—Arizona, Missouri, New Mexico, and Ohio—charge no annual report fee at all. Most others charge between $25 and $150. These are small amounts individually, but they compound alongside registered agent fees, accounting costs, and banking fees into a maintenance burden that UAE entrepreneurs should budget for upfront, not discover after formation.

The US processed over 5.2 million new business applications in 2024, per Census Bureau figures. The LLC was the chosen structure for roughly 85% of new entity formations in 2023. The system is built for volume, and the process is genuinely accessible to non-residents. What it is not built for is hand-holding. Nobody at the Wyoming Secretary of State’s office will remind you that your annual report is due. Nobody at the IRS will nudge you about Form 5472.

That responsibility falls on the founder. And in a market where the cost of entry is low but the cost of non-compliance is steep, knowing the numbers before you file is the difference between a useful business tool and an expensive mistake.