The best company structure for an IT support business.

An IT support business serving US clients has a simple commercial need: to get paid easily by those clients in USD. Most of your clients will be US small and medium-sized businesses (SMBs). They expect to pay you via ACH transfer or card, and they expect to send that payment to a US business bank account in your company's name. When they pay a foreign provider, they may face high wire fees and complex compliance paperwork. Some may simply refuse. To make your service easy to buy, you need to look like a domestic vendor.

You also need a US Employer Identification Number (EIN). When a US business pays you more than $600 in a year, they need to report it to the IRS. They will ask you for a Form W-9, which requires a US tax number. A US LLC can provide this. Without it, clients may be required to withhold 30% of your invoice. This structure is primarily about unlocking US-facing infrastructure and making it frictionless to collect revenue in USD. It positions your business inside the US commercial perimeter, even if your operations and staff are entirely overseas.

A single-member LLC owned by a non-US person is a "disregarded entity" for US tax purposes by default. This means the LLC itself is not a taxpayer. Instead, the US tax authorities look through the LLC to its owner. The structure gives you a formal US entity, a registered office, and an EIN, which solves the commercial problems of getting paid. It creates a clear legal person that can enter contracts with clients and open accounts with financial institutions.

What it does not do is eliminate your tax obligations in your own country of residence. The structure is tax-neutral, not a tax haven. You are still required to report the income and pay tax where you live and work. It also does not magically make a high-risk business low-risk. Underwriters will look at the substance of your business, not just its legal form. Banking is never guaranteed. Finally, while an LLC provides liability protection, this is limited. It separates your personal assets from business debts, but it does not protect you from liability for your own professional negligence or misconduct.

For a foreign-owned, single-member LLC, the US tax question turns on two main points: is the income "US-sourced", and is the owner "engaged in a trade or business in the United States" (ETBUS)? For an IT support business based entirely outside the US, with no US staff, office, or "dependent agent" acting on its behalf, the income is generally sourced to where the work is performed. If your team is in India, the work is performed in India, even if the client is in the US. In this case, the income is foreign-sourced and not subject to US tax.

This is a complex area of tax law and depends entirely on your specific facts. You must get advice from a qualified US tax professional to determine your status. However, even if you are not ETBUS and have no US tax to pay, a foreign-owned single-member LLC has a mandatory annual filing obligation. You must file Form 5472 to disclose the foreign ownership, attached to a pro forma Form 1120. The penalty for failing to file this, or filing it late, is a minimum of $25,000, so it is critical to get this right.

The choice of state for an online IT support business usually comes down to Wyoming or Delaware. Both states have modern, well-regarded corporate law and do not tax income at the state level for LLCs owned by non-residents with no state-based operations. The primary difference is cost and privacy. Wyoming is significantly cheaper to form and maintain, with lower annual filing fees. It also offers more privacy, as the public record does not list the names of members or managers.

Delaware is the standard for US venture-backed technology companies, but it is more expensive and requires a registered agent to file an annual report that lists the names of members. For a bootstrapped IT support business that does not plan to raise venture capital, the additional cost and administrative burden of a Delaware LLC is often unnecessary. For most non-US founders in this niche, Wyoming offers a more efficient and private solution. The choice of state has little impact on your ability to open a US bank account; the critical factors are your EIN, your business model, and your own identity verification.

A US LLC with an EIN is the key to the US financial system. With these, you can apply for a US business bank account. These accounts allow you to receive ACH and wire transfers from your US clients in your company's name, with US routing and account numbers. This is a game-changer. Instead of expensive, slow international wires to an offshore account, your clients can pay you like any other domestic vendor. This reduces friction and makes you an easier choice.

This structure also makes you eligible for US payment processors like Stripe or Shopify Payments on a domestic basis. These platforms often require a business entity and tax ID in the country of operation. A US LLC qualifies you for their US products, which typically have lower fees and better settlement terms for USD-denominated sales. For an MSP business billing clients on monthly retainers, having a reliable, low-cost rail for recurring ACH or card payments is a significant operational advantage. It professionalises your invoicing and improves your cash flow.

When a financial institution underwrites an IT support business, they are assessing its specific risks. They will look for a professional website that clearly explains your services, pricing, and team. They want to see that you are a legitimate operation, not a front for scams like remote access trojan (RAT) distribution or fraudulent "tech support" pop-ups. Your client contracts are important; they want to see clear terms of service and service level agreements (SLAs). Monthly recurring revenue from MSP contracts is viewed positively, as it shows stable, predictable cash flow.

Underwriters will also verify you, the ultimate beneficial owner. They will run KYC (Know Your Customer) checks and screen you against global watchlists. Be prepared to provide clear, high-quality copies of your passport and proof of address. Any indication that the business is involved in unlicensed activities, or facilitates payments for third parties, will lead to a decline. The cleaner your business presentation and the more transparent your operations, the higher the probability of a successful application.

For a non-US founder running a remote IT support business, the choice of state is less about nexus and more about perception. Wyoming, Delaware and Florida are the most common choices, each sending different signals to banks and payment processors.

Wyoming offers the lowest annual upkeep and strong privacy through a registered agent. Its filings are clean and minimal. This makes it the default choice for simple holding companies, but for an active IT support business, some underwriters may see it as a flag for a less substantial operation. Delaware has a higher annual franchise tax and its name carries a perception of seriousness and scale. This can be a marginal benefit when applying for payment processing or corporate accounts, as it aligns with the image of a more established firm. Florida has no state income tax, which is irrelevant for a foreign-owned disregarded LLC, but its registered agent fees are often lower. However, its public record transparency can be a drawback for founders who prioritise privacy, and it offers little perceptual advantage over Wyoming for an IT support business.

Payment processors apply their own risk models to your IT support business LLC. Stripe is the most common and accessible option, typically requesting your EIN confirmation letter (147C or CP575), articles of organization and operating agreement during onboarding. They will also verify the founder’s identity using their passport.

Reserves are uncommon for standard MSP retainers, but may be triggered by large one-off project payments, suggesting project risk a processor is not priced to carry. PayPal’s onboarding is similar, but its algorithm is more sensitive to disputes. A single client claiming non-delivery on a support contract can trigger an account limitation. Braintree and Adyen are viable for larger MSPs, but their underwriting is more intensive, often requiring processing history and clearer evidence of your service delivery model. Having template client contracts, service level agreements and detailed invoices ready is critical. These documents prove to an underwriter that your revenue is from legitimate, recurring IT support services and not from a riskier activity.

Third-party costs for a US LLC are predictable. State filing fees are a one-time expense, typically around $100 for Wyoming. Annual costs include the state’s annual report fee ($62 for Wyoming) and a registered agent service, which ranges from $100 to $250 per year. Obtaining an EIN from the IRS as a non-resident without a Social Security Number is free but takes time. The process itself is opaque, but you should budget 3 to 5 weeks for the EIN confirmation letter to be issued after filing.

The entire sequence from LLC filing to receiving your first client payment often takes 6 to 8 weeks. Week 1 involves state filing. Weeks 2-6 are typically spent waiting for the IRS to issue the EIN. Once the EIN is secured in Week 6, you can apply for a business bank account and payment processing. Bank onboarding can take another 1-2 weeks. Delays most often occur at the banking stage, where an underwriter may have specific questions about your service agreements or the nature of the software you support.

The process starts with collecting your details and running KYC checks. Once cleared, we form the LLC in your chosen state, typically Wyoming. This takes a few business days. After the LLC is registered, we file Form SS-4 with the IRS to obtain your Employer Identification Number (EIN). This is the longest part of the process. While we have established methods to secure EINs for non-US founders without a US tax ID, IRS processing times can vary from three to eight weeks.

As soon as the EIN is issued, we begin the final stage: preparing and positioning your application for a US business account. We package your corporate documents, EIN confirmation, and business model information for submission to institutions that we know have an appetite for this specific business profile. We handle the communication and follow-up. The entire sequence, from start to having an open US business account, realistically takes between five and ten weeks, with the IRS timeline being the main variable. You can start the process at xavioncapital.com/start.