The best company structure for a business coaching practice.

A business coaching practice primarily sells high-ticket programmes and courses to individuals, often with high-pressure sales tactics and promises of specific business outcomes. The company structure must support this model. Commercially, the main requirement is the ability to take payments from a global client base, primarily in USD, via mainstream payment processors like Stripe and PayPal. This means appearing as a US-based merchant, which is what a US LLC provides.

The structure also needs to manage the specific risks of this business. Chargeback risk is significant. Clients may dispute charges months later if they do not see the results they were promised. The business entity needs to be robust enough to hold processor accounts that can withstand this scrutiny. Finally, the structure must be simple to administer from abroad. The owner is not in the US, has no US staff, and needs a low-maintenance entity that does not create an excessive compliance burden. A simple pass-through entity usually meets this need better than a C Corporation, which is a separate US taxpayer.

A single-member LLC owned by a non-US person is a ‘disregarded entity’ for US tax purposes. The LLC itself does not pay US tax. This makes it an administratively simple vehicle. Its primary function is commercial: it creates a US-domiciled entity with a US EIN, which opens the door to US-based banking and payment services. This allows your coaching business to operate as a US entity in the eyes of platforms, clients, and payment networks. It lets you sign a W-9 for US clients and receive payments cleanly.

However, it is crucial to understand what this structure does not do. It does not eliminate tax obligations in your home country. You are still required to report the income and pay tax where you reside and operate your business. The LLC is not a magic shield against your local tax authority. It also does not make a high-risk business model low-risk; it simply provides a legitimate US container for it. Banking and payment processing are never guaranteed and depend entirely on the specific risk profile of your coaching practice.

For a foreign-owned, single-member LLC, the US tax question turns on two main points: whether your income is US-sourced, and whether you are ‘engaged in a trade or business in the United States’ (ETBUS). For many online coaching businesses operated entirely from outside the US, with no US office, staff, or dependent agents, the income may not be considered ETBUS. If you are not ETBUS, you generally do not owe US federal income tax on that income. However, this is a complex determination based on the specific facts of your business.

Even if no tax is due, there are reporting requirements. A foreign-owned single-member LLC must file Form 5472 and a pro forma Form 1120 annually to disclose transactions with its foreign owner. The deadline is typically April 15th. Failure to file carries a significant penalty, starting at $25,000, so this obligation must be taken seriously. You must consult a qualified US tax adviser to assess your specific situation, confirm your ETBUS status, and ensure you meet all filing requirements.

The two most common states for non-US founders to form an LLC are Wyoming and Delaware. Both offer strong privacy protection and have a well-developed body of corporate law. For most online business coaching practices, Wyoming is often the more practical and cost-effective choice. It has lower annual fees and a simpler administrative process than Delaware. The filing fee is low and the annual report fee is minimal. Wyoming's privacy features are also robust, keeping the owner's name off the public record.

Delaware is a prestigious jurisdiction, known for its Court of Chancery, which is highly respected for resolving complex corporate disputes. While this is critical for venture-backed startups or companies planning an IPO, it is usually overkill for a single-owner business coaching practice. The higher formation and annual franchise tax costs in Delaware do not typically provide a corresponding benefit for this specific business model. For these reasons, a Wyoming LLC is generally the default, lean option for a non-resident-owned coaching business.

A US LLC with an EIN is the key to US financial infrastructure. Without it, you are reliant on services like Payoneer or Wise, which are useful but not the same as having a US business bank account in your company's name. A proper US entity allows you to apply to US-based banking-as-a-service (BaaS) fintech platforms, which partner with community banks to offer accounts to global businesses. These accounts provide an ABA routing number and account number, allowing you to receive USD payments, including ACH transfers and wires, as a domestic entity.

This is transformational for payment processing. With a US entity and US bank account, you can apply for a Stripe or Shopify Payments account as a US business. This often provides access to better pricing, faster payouts, and a higher level of trust than using an account based in your home country. For a business coaching practice that relies on processing high-value card payments from clients globally, operating through a US merchant account is a significant commercial advantage. It professionalises your payment stack and reduces cross-border friction.

When you apply for a bank account or payment processor, a compliance underwriter assesses your business. For a business coaching practice, they focus on specific risks. The main one is chargeback and refund exposure from high-ticket sales. Underwriters will scrutinise your sales pages, marketing materials, and client agreements for misleading claims or unrealistic promises of success. They are wary of phrases like ‘guaranteed results’ or ‘six-figure income in 90 days’.

They will also look for a clear, fair, and prominently displayed refund policy. A business with a ‘no refunds’ policy on a $10,000 coaching programme is a major red flag. Your client onboarding process, contracts, and service delivery must be professional and transparent. Underwriters want to see that you are managing client expectations and delivering a real service, not just selling an ebook for a high price. They will also verify that you are not offering regulated financial or legal advice. Being clear that you provide education and coaching, not licensed advisory, is critical for approval.

For a business coaching practice, the choice between Wyoming, Delaware, and Florida is less about state tax and more about perception and cost. Wyoming and Delaware have no state income tax for LLCs, which is irrelevant for a foreign-owned disregarded entity not conducting business in the US. The real difference is how your filing state is perceived by payment processors and banking underwriters.

Wyoming offers the lowest annual upkeep, with a $62 annual report fee. Its privacy protections are robust, keeping member details off the public record. This combination makes it the default for most online businesses. Delaware's 'corporate haven' reputation can sometimes lend an air of seriousness, but this is rarely a deciding factor for a coaching practice. Its annual franchise tax is a flat $300, a significant jump from Wyoming for no practical gain in this context. Florida is often considered due to its popularity, but for a non-resident founder with no US presence, it introduces unnecessary complexity. It offers no privacy, and its filing can create a perception of 'nexus' (a taxable presence) that, while likely untrue for your structure, may trigger needless questions from compliance teams.

Processors view high-ticket coaching services with caution due to the risk of customer disputes and chargebacks. When you apply for Stripe, Shopify Payments, or PayPal with a new foreign-owned US LLC, underwriters will scrutinise your operating model. Be prepared for them to ask for your passport, EIN confirmation letter (CP 575), and evidence of your business model, like a detailed website with clear terms of service.

A common trigger for a hold or reserve on your account is a sudden influx of large payments, especially if your coaching programme promises specific income or life outcomes. Stripe may place a rolling reserve, holding 20-30% of your revenue for a period of 90-120 days to cover potential chargebacks. PayPal is known for placing holds on funds for up to 180 days if your account activity is deemed unusual or if a client files a dispute. To minimise this risk, your client agreements must be explicit about the service delivered and the refund policy. Vague promises on your sales page are a significant red flag for underwriters.

The core third-party costs for your US LLC are predictable. State filing fees are a one-time expense, around $100 for Wyoming. Annual costs include the state's report fee ($62 for Wyoming) and your registered agent service, which typically ranges from $100 to $250 per year depending on the provider. Obtaining an EIN from the IRS as a non-resident without a Social Security Number (SSN) is free but takes time; expect a 4 to 8 week wait for the confirmation letter to be issued and delivered.

The critical path from LLC filing to your first settled payout often stalls during bank account opening and processor onboarding. While the LLC can be formed in days, a financial institution may take 2 to 3 weeks to approve an application from a non-resident founder in the coaching space. Payment processors can then take another 1 to 2 weeks for their own underwriting. A realistic timeline is 8 to 12 weeks from starting the process to having a fully operational structure ready to accept and withdraw payments without immediate holds.

The setup process follows a logical sequence. First, we form the LLC in the chosen state, typically Wyoming. This takes a few business days. Once the LLC is formed, we apply for the Employer Identification Number (EIN) from the IRS. This is the longest part of the process; the IRS timeline for non-residents can vary from a few weeks to several months. We manage this application process and follow up with the IRS on your behalf.

Once the EIN is issued, we can begin the process of applying for a US business bank account and payment processor accounts. Xavion prepares a comprehensive brief for the financial institution, presenting your coaching business, its operating model, and its compliance posture in the best possible light. We guide you through the application and know-your-customer (KYC) process. The entire sequence, from LLC formation to having an operational bank account, realistically takes between two and four months, with the main variable being the IRS processing time for the EIN. We manage the entire administrative path, allowing you to focus on running your practice.