The best company structure for a no-code tool business.

A no-code tool business sells software, usually on a subscription basis. Your primary needs from a corporate structure are commercial: a stable, recognised entity that can open a business bank account and integrate with the key payment processors in the software-as-a-service (SaaS) world. Specifically, you need an entity that qualifies for a Stripe or Shopify Payments account in a supported country, ideally the US, to handle recurring card payments efficiently. Without this, you are often left with less integrated, higher-friction alternatives that can hurt conversion and retention.

You also need a structure that allows you to receive payouts from app stores and marketplaces like the Bubble Marketplace or the Webflow Marketplace, which often require a formal business entity and may have an easier time paying out to a US company. Finally, if you sell to US businesses, they will expect to receive a Form W-9 and pay a US entity. The legal and tax characteristics of the structure are in service of these commercial goals. It must be simple to maintain, credible to counterparties, and tax-efficient for your specific situation as a non-resident founder.

A single-member LLC is a distinct legal entity, but for US federal tax purposes, it is ‘disregarded’. All income and activity are deemed to be those of the single owner. If that owner is a non-US person, the structure is often tax-neutral from a US perspective while still providing the commercial benefits of a US entity. It gives you a registered US company with an Employer Identification Number (EIN), which is the key that unlocks US business banking, payment processing, and other commercial infrastructure. This is why it is the default choice for so many non-US founders in your position.

However, it is important to be clear about what this structure does not do. It does not eliminate your tax obligations in your country of residence; you are still required to report your income and pay taxes according to your local laws. It does not make a high-risk business model low-risk in the eyes of a bank. It is not a tool for anonymity. And forming an LLC does not guarantee a bank account will be opened. Banking access is subject to each institution’s risk appetite and due diligence process, which we will cover later.

Because a single-member LLC is a disregarded entity, the company itself does not pay US federal income tax. The tax question becomes about its foreign owner. A non-US person is generally only subject to US tax on income that is ‘effectively connected with a US trade or business’ (ETBUS). Many purely online businesses, including no-code tools operated entirely from outside the US with no US staff, offices, or dependent agents, may not be considered ETBUS. If the business is not ETBUS, its foreign-source income is not taxed by the US, and its US-source income from sales to US customers is also generally not taxed. This determination is fact-specific and must be confirmed with a qualified US tax adviser.

Even if no tax is due, a foreign-owned disregarded entity has a mandatory annual filing requirement. You must file Form 5472, ‘Information Return of a 25% Foreign-Owned US Corporation or a Foreign Corporation Engaged in a US Trade or Business,’ along with a pro forma Form 1120. This is an informational return, not a tax return, but the penalty for failing to file it on time is a significant $25,000. This non-negotiable compliance step is part of the trade-off for using the LLC structure.

For most non-US founders of online businesses like a no-code tool, Wyoming and Delaware are the most common and suitable states for formation. Both have established, reliable corporate law systems and are efficient to deal with. The choice between them is less critical than many believe, as the federal tax treatment of the LLC is the same regardless of the state of formation.

Wyoming is often favoured for its simplicity, lower annual fees, and strong privacy protections for members' personal information. For a founder focused on straightforward compliance and cost-effectiveness, it is an excellent choice. Delaware is the standard for venture-backed technology companies, with a deep body of corporate case law and a specialised court. While this is more relevant for companies raising equity financing from VCs, some founders choose it for its brand recognition. For a bootstrapped or self-funded no-code business that does not plan to raise institutional capital, the practical benefits and lower running costs of a Wyoming LLC often make it the more logical starting point. We can, of course, form entities in either state.

The primary commercial purpose of your US LLC is to serve as a credible, verifiable counterparty for US financial institutions. With a registered US entity, a US address, and a federal EIN, you can apply for US business bank accounts and payment processing. This unlocks the ability to collect revenue in USD directly, avoiding forced conversions and high fees from platforms like PayPal or Payoneer. You can hold a USD balance in your company's name.

Crucially, it makes you eligible for a US Stripe account, the gold standard for SaaS subscription billing. A US Stripe account provides access to better pricing, more features, and higher acceptance rates on US-issued cards compared to Stripe accounts in many other countries. For marketplaces, a US company and US bank account can simplify receiving payouts from platforms built on US payment rails. This access to core US financial infrastructure is often the single most significant growth accelerant for a non-US-based no-code founder selling to a global or US-heavy market. It professionalises your cash management and reduces operational friction.

When you apply for a business account for your no-code tool, bank and fintech compliance teams will assess the specific risks of your business. They will look for a clear, publicly accessible website that transparently explains what your tool does. Terms of service and privacy policies must be in place. Underwriters want to understand who your customers are and how you find them. Is it a B2B tool or a B2C tool? Your marketing should be professional and verifiable.

For subscription models, they look at churn and refund rates. High refund rates can be a red flag for poor product-market fit or deceptive marketing. They will also scrutinise the nature of the tool itself. A tool for project management is seen as lower risk than a tool that could be used for web scraping, bulk email, or other activities that border on acceptable use policy violations for many platforms. Be prepared to explain exactly what your product does and what it is used for. Clear, honest communication about your business model is critical for a successful application. They are underwriting you, the founder, as much as the business.

For a non-US founder running a no-code tool business, the choice of state comes down to specific trade-offs in cost, privacy and perception. Wyoming, with its low annual fee and strong privacy, is often the default. Its filing is inexpensive, and ownership information is not public. This is a significant advantage when your personal details are otherwise exposed online.

Delaware offers a different kind of credibility. Its long-established corporate law and respected Court of Chancery are seen by some payment processors and institutional partners as a mark of seriousness, which can be a subtle advantage. However, this comes at a higher annual cost through its franchise tax, and privacy is less absolute than Wyoming’s.

Florida is a less common choice but has its place. It carries no state income tax, which is irrelevant for a foreign-owned disregarded LLC, but its annual report fee is moderate. Crucially, it is a high-population state with a large economy, which can sometimes appear more conventional to underwriters at certain US financial institutions who may be less familiar with the specifics of entities formed for non-residents.

Each payment processor has its own underwriting quirks for foreign-owned US LLCs in the no-code space. Stripe is the most common and generally has a smooth onboarding process, asking for the LLC's formation documents, EIN confirmation letter (CP 575), and the founder's foreign passport. Sudden spikes in subscription volume can trigger automated reviews or reserves.

PayPal's business accounts have more stringent onboarding for non-resident owners. They often require the same documents as Stripe but may also ask for proof of address for the business or founder. Their reserve policies can be aggressive, particularly for new accounts selling digital products, sometimes holding 20-30% of funds for up to 90 days. Selling on marketplaces like Bubble or Webflow may mean using their integrated payment solutions, which simplifies initial setup but can mean less control over payout timing and dispute resolution.

Braintree and Adyen are typically better suited to larger, established businesses. Their underwriting is more manual and may involve direct interviews and a deeper look at your business model, processing history and customer service workflows. Having clear, accessible terms of service and refund policies is critical for all processors.

Setting up a US LLC involves several third-party costs. State filing fees are a one-time expense, typically $100 in Wyoming or $90 in Delaware. Annual costs are more significant: Wyoming's annual report is about $60, while Delaware's franchise tax is a flat $300. A commercial registered agent, which is required, will range from $100 to $300 per year. There is no government fee for the EIN itself, but obtaining it without a Social Security Number can take 8-15 weeks.

The entire sequence, from filing the LLC to receiving your first customer payout, realistically takes 3-4 months. Week 1: LLC filing. Weeks 2-3: State confirms formation. Weeks 4-15: EIN application is processed by the IRS. Only with the EIN can you apply for a business bank account, which can take another 1-3 weeks for approval and onboarding. Integrating the account with Stripe or another processor takes a few days, but the first payout is often delayed by 7-14 days for verification. The most common stall point is the wait for the EIN confirmation letter.

The process of setting up your US structure follows a specific sequence. First, we form the LLC in your chosen state, typically Wyoming or Delaware. This takes a few business days. Once the state confirms the formation, we immediately file Form SS-4 with the IRS to obtain your Employer Identification Number (EIN). EIN processing times vary, but as of late 2023 and early 2024, it typically takes 15 to 20 business days for a foreign-owned entity. The EIN is the critical document required for bank account applications.

With the approved formation documents and EIN in hand, Xavion prepares and positions your application with suitable US banking institutions. We manage the application process and communication with the institution's compliance teams. Opening the account can take anywhere from a few days to several weeks, depending on the institution's backlog and the complexity of your case. A realistic total timeline from starting the company formation to having an open bank account is typically five to eight weeks. Our role is to manage this entire sequence efficiently, ensuring each step is completed correctly to maximise the probability of a successful outcome. You can start the process at xavioncapital.com/start.