The best company structure for a mobile game studio.

A mobile game studio's primary requirement is a simple, recognised entity that can contract with Apple and Google for app store distribution. Both platforms require developers to onboard as a legal entity to access full developer features, manage tax documentation (like the W-8BEN-E), and receive payouts. The entity must have a tax identification number from its country of formation. Without a formal structure, you are forced to operate as an individual, which complicates payouts and presents a less professional image.

Critically, the business needs a bank account in the name of the entity that can receive USD payouts from these US technology companies efficiently. Relying on personal accounts or certain e-money services can lead to blocked transfers or compliance holds, as these platforms are designed for corporate, not personal, receipts. A proper US entity with a US Employer Identification Number (EIN) opens the door to US-based business bank accounts, which simplifies receiving revenue from US sources and paying for US-based services like servers or marketing agencies. The structure must achieve these commercial goals without creating an unnecessary administrative or tax burden.

A single-member LLC owned by a non-US person and treated as a disregarded entity meets the core needs of a mobile game studio. It is a formal US business entity, legally separate from its owner, which satisfies the requirements of the major app stores. It can obtain a US Employer Identification Number (EIN), which is the key that unlocks access to US business banking and payment processors.

This structure is popular because of what it does not do. For tax purposes, a disregarded entity is not considered separate from its owner. Its income is treated as the owner's income. This means the LLC itself does not pay US corporate tax. The tax question shifts to the owner, but as we will explain, many non-US founders operating remotely may not have a US tax liability. It is important to be clear: this structure does not eliminate tax obligations in your country of residence. All profits must be declared according to your local laws. It is a tool for accessing US financial infrastructure, not for tax avoidance. It also does not make a high-risk game concept low-risk; banking is never guaranteed.

For a foreign-owned single-member LLC, the US tax question has two parts: is the income US-sourced, and is the owner 'engaged in a trade or business in the United States' (ETBUS)? Revenue from games sold to US customers on the App Store and Google Play is generally considered US-source income. However, being ETBUS depends on your operational facts. If you have no employees, office, or dependent agents in the US managing your business, your activity may not rise to the level of ETBUS. If you are not ETBUS, your US-source income is generally not subject to US tax.

This is a fact-specific determination that must be confirmed with a qualified US tax adviser who understands your exact situation. Critically, even if no tax is due, a foreign-owned single-member LLC has a strict reporting obligation. It must file Form 5472 and a pro forma Form 1120 with the IRS annually to report transactions with its foreign owner. The penalty for failing to file this form on time is significant, starting at USD 25,000. This filing makes the structure transparent to the US tax authorities, and compliance is not optional.

For a mobile game studio owned by a non-US founder, the choice of state is primarily about administration and legal precedent, not tax. Neither Wyoming nor Delaware levies state income tax on an LLC whose only activity is holding assets or conducting business outside the state. Both states have strong privacy protections and well-regarded, business-friendly legal systems.

Wyoming is often preferred for its simplicity and lower annual fees. Its administrative requirements are minimal, making it a cost-effective choice for a straightforward online business like a game studio. The filing process is fast and efficient. Delaware is the standard for venture capital-backed technology companies that intend to issue stock and have multiple investors. Its Court of Chancery has a deep body of corporate case law, which is valuable for complex governance matters. However, for a single-member LLC funded by its owner, these benefits are less relevant, and Delaware's annual franchise tax is higher. For most bootstrapped game studios seeking a US entity for platform access, Wyoming provides the necessary benefits with less overhead.

The primary commercial reason for a game studio to form a US LLC is to access better financial infrastructure. With a US company and EIN, you can apply for a business account at US-based banking institutions. This includes fintech platforms that are fronted by community banks, which are often more accessible to international founders than traditional high street banks. Having a US account in the LLC's name allows you to receive USD payouts directly from Apple and Google without costly conversion fees or the risk of rejection by intermediary banks.

This structure also makes you eligible for US payment processors like Stripe or Shopify Payments by entity country, which are essential if you sell merchandise or direct-to-consumer digital goods. When you provide a W-9 form to the app stores using your LLC's name and EIN, you are treated as a US entity for payout purposes. This avoids the 30% backup withholding that can sometimes be applied to non-US entities if their tax forms (like the W-8BEN-E) are incorrect. It provides a clean, domestic rail for your US-sourced revenue.

When you apply for a business account, a compliance underwriter will review your business. For a mobile game studio, their assessment focuses on specific risks. They will look at your games directly on the App Store or Google Play. They are screening for content related to gambling, even simulated gambling with no real money payout, which is a high-risk category that many institutions will not support. They will also look for intellectual property risk; games that appear to use characters, art, or music from well-known franchises without a clear license will be declined.

Underwriters will also assess the founder's background and country of residence. Sanctioned countries are an immediate red flag. They want to see a clear business model. In-app purchases, cosmetic upgrades, and one-time game purchases are standard and well understood. Business models that are unclear, rely on user-generated content that is hard to moderate, or involve play-to-earn crypto mechanics are much harder to place. A professional website and clear privacy policy are essential to show that you are running a legitimate operation.

For a non-US owned mobile game studio, the choice of state is primarily between Wyoming and Delaware. Florida is a distant third, often considered only for specific operational reasons not applicable to most remote studios. The core difference lies in perception and annual cost.

Wyoming offers the lowest annual upkeep, with a small state report fee and competitive registered agent costs. Its privacy protections are robust, shielding member details from the public record. For a straightforward mobile game studio whose revenue comes from the Apple App Store or Google Play Store, a Wyoming LLC is clean, cost-effective and perfectly suitable. It projects no specific nexus and is well understood by payment processors.

Delaware commands a higher annual franchise tax and typically higher registered agent fees. Its primary benefit is its Chancery Court system, which is irrelevant for a single-member LLC. However, some founders perceive Delaware as more prestigious, which can be a marginal factor if seeking venture capital. For App Store revenue, this prestige is not a functional advantage. Onboarding teams at financial institutions treat both states as standard for this business model.

A foreign-owned US LLC's main challenge is connecting its US bank account to receive payouts. For a mobile game studio, the key gatekeepers are Apple and Google. When you update your developer account to the new LLC's details, they will require the EIN confirmation letter (CP 575), a bank account verification letter or voided cheque, and a completed W-8BEN-E form. A mismatch between the legal entity name on the LLC documents, the EIN letter, and the bank account is the most common reason for payout delays.

For studios also selling merchandise or direct-to-customer items, Stripe is the most common processor. Stripe will ask for the founder's foreign passport, the EIN letter, and proof of a US business address (typically the registered agent's address is insufficient here; a virtual address is needed). Stripe is sensitive to chargeback rates. Game studios with high refund rates on direct sales may see reserves of 5-10% applied for 30-90 days. PayPal requires similar documentation but is quicker to limit accounts if it detects any connection to a previously banned account. For most studios, the primary focus should be a clean pass of Apple and Google's entity verification.

Setting up a US LLC for a mobile game studio involves predictable third-party costs and a sequence of potential delays. State filing fees are a one-time public cost. Annual costs include the state's report or franchise tax (ranging from around $60 in Wyoming to $300 in Delaware) and registered agent services, which typically cost $100-$250 per year.

The critical path is obtaining the Employer Identification Number (EIN) from the IRS, which is required for both the app stores and opening a US business account. Without a Social Security Number (SSN), this process can take anywhere from 15 to 45 business days. Once the EIN is issued, opening the US business account can take another 1 to 3 weeks, depending on the institution's backlog and compliance checks.

Updating Apple and Google developer accounts with the new LLC, EIN, and bank details can take a few days to a week for review. A realistic timeline from starting the LLC formation to receiving the first payout from an app store into the new US bank account is 6 to 9 weeks. The most common stall point is the wait for the EIN confirmation letter from the IRS.

The process is sequential and takes time. First, the LLC is formed in the chosen state, typically Wyoming or Delaware. Once the state confirms the formation, we file Form SS-4 with the IRS to obtain the Employer Identification Number (EIN). This step can take several weeks, as processing times at the IRS vary. The EIN confirmation letter (CP 575) is the key document required for the next stage.

With the formation certificate and EIN letter in hand, Xavion prepares and submits your banking applications. We do not send applications to just one institution. We position your file across a vetted portfolio of US fintech BaaS institutions and certain EMIs in other jurisdictions, selected based on their risk appetite for the gaming industry and international founders. We manage the entire application process, responding to compliance queries and providing documentation until an account is successfully opened. Finally, we guide you on updating your developer accounts with Apple and Google to link the new LLC and its bank account for payouts. For a consultation on your specific needs, visit xavioncapital.com/start.