Do I really need a U.S. LLC?

11 years ago

Will you be shipping from within the US? If not, I don't think you have a problem.

If you use a US website and get paid via PayPal you can get you money to Germany by that means.

I think your real problem might be getting US buyers to order if they know what country the goods are coming from, although more and more are now prepared to buy offshore.

Thanks
1 reply

Signature

Use emotions and perceptions to build a great brand. Ask me about my book LabelsThatExploit. For safe sourcing and easy importing from 41 countries globally, see https://provenglobalsourcing.com

{{ DiscussionBoard.errors[7765346].message }}

CarstenK

11 years ago

Originally Posted by Importexport

Will you be shipping from within the US? If not, I don't think you have a problem.

If you use a US website and get paid via PayPal you can get you money to Germany by that means.

I think your real problem might be getting US buyers to order if they know what country the goods are coming from, although more and more are now prepared to buy offshore.

Sorry forgot that point... I'm looking to get into contact with U.S.-based wholesalers. So the items will be sent from the United States to the United States (or international if that should occur)!

Thanks

{{ DiscussionBoard.errors[7767153].message }}

magiceyes

11 years ago

For any case, to protect yourself and your future business it would be a good idea to get your US LLC. It will also add credibility and trust to your business.

Carsten, it is not as expensive as you may think. There are many on-line sources that can help you with that, check for example:

https://www.incorporate.com
Limited Liability Company USA | Delaware LLC | Delaware Inc | Company Formation | Corporation Setup & Tax
https://www.myusacorporation.com/art...n-wyoming.html
Why Delaware? - IncPlan (USA)
Starting a Business in the U.S. as a Foreign National | SBA.gov

You have to be aware of taxes and fees involved. I'd recommend to do some research/consultations to get a better understanding on how this will work out for you.
As for the US bank account and address, many providers will help you with that as well.
Since you're form Germany, you should have no problems with getting your money from your US account (or transferring via PayPal).

Good luck

Meg

Thanks
1 reply

{{ DiscussionBoard.errors[7767263].message }}

CarstenK

11 years ago

Originally Posted by magiceyes

For any case, to protect yourself and your future business it would be a good idea to get your US LLC. It will also add credibility and trust to your business.

Carsten, it is not as expensive as you may think. There are many on-line sources that can help you with that, check for example:

https://www.incorporate.com
Limited Liability Company USA | Delaware LLC | Delaware Inc | Company Formation | Corporation Setup & Tax
https://www.myusacorporation.com/art...n-wyoming.html
Why Delaware? - IncPlan (USA)
Starting a Business in the U.S. as a Foreign National | SBA.gov

You have to be aware of taxes and fees involved. I'd recommend to do some research/consultations to get a better understanding on how this will work out for you.
As for the US bank account and address, many providers will help you with that as well.
Since you're form Germany, you should have no problems with getting your money from your US account (or transferring via PayPal).

Good luck

Meg

Thanks so much for the info, magiceyes =)

Thanks
1 reply

{{ DiscussionBoard.errors[7768898].message }}

lawboy22 11 years ago

I would definitely form a LLC for this. If you need assistance there are a lot of good websites out there that will help you in forming a U.S. LLC for relatively cheap and they do the work very quickly. Should not take the risk when it comes to liability.
- Thanks
{{ DiscussionBoard.errors[7769163].message }}

motley

11 years ago

Hey all,

I'm also interested in this information. I live in Denmark and consider opening a dropshipping store selling goods from US based wholesalers to US buyers.

There is an opinion that the US wholesalers won't approve a store run by a non-US company because of possible tax reporting issues. Can anyone confirm this information?

Another question is about the sales tax. Different states have different sales tax rates. How to deal with it? I read here that some sellers "have a policy that we do not collect tax for foreign governments, and our website indicates that any sales or use tax (if any) is the responsibility of the customer." Could it be the solution?

Thanks
2 replies

{{ DiscussionBoard.errors[7769564].message }}

dave_hermansen 11 years ago

Is it better to have a U.S. LLC, a federal tax ID and a U.S. bank? Absolutely! It makes getting suppliers easier and allows you to take something besides PayPal (or similar), which definitely boosts your conversion rate. Is it, mandatory? Not necessarily.

We have quite a few members of our program who have successful eCommerce dropship websites that are not from the U.S. but are selling to the USA. Some of them have had to form U.S. LLC's and others have not. It really comes down to the supplier.

Part of the problem is a lack of communication. Some suppliers don't understand that they will be paid immediately for orders in U.S. dollars and that they will be shipping only to the United States. Once they understand that, some of them are a little more open minded. Then again, there are other suppliers who will not work with a foreign entity, for whatever reason - maybe they are xenophobes! Perhaps it's because there is a blank on their form that requires a federal tax ID number and they don't know how to fill out a form without filling in that blank.

I say try to get a supplier without the LLC and make sure they understand that they will only be shipping to the United States and will be paid in U.S. dollars. If you can't find one, you can either explore the U.S. business identity options or move onto another niche and try again.
- Thanks
Signature

BizSellers.com - The #1 place to buy & sell websites!
We help sellers get the MAXIMUM amount for their websites and all buyers know that these sites are 100% vetted.
{{ DiscussionBoard.errors[7770521].message }}

EfanBruder

11 years ago

Originally Posted by motley

Hey all,

I'm also interested in this information. I live in Denmark and consider opening a dropshipping store selling goods from US based wholesalers to US buyers.

There is an opinion that the US wholesalers won't approve a store run by a non-US company because of possible tax reporting issues. Can anyone confirm this information?

Another question is about the sales tax. Different states have different sales tax rates. How to deal with it? I read here that some sellers "have a policy that we do not collect tax for foreign governments, and our website indicates that any sales or use tax (if any) is the responsibility of the customer." Could it be the solution?

In general, you only pay sales tax to the state you're "based" in. In other words, if you have a Nevada LLC, you would (generally) only pay sales tax on orders shipped to Nevada. If you have a South Dakota LLC, on orders shipped to South Dakota. A few states are trying to charge sales tax on on anything shipping to their states, but they're facing constitutional challenges as well as enforcement challenges.

Thanks
1 reply

{{ DiscussionBoard.errors[7799524].message }}

york 11 years ago

What is wrong with droshipping all over the EU?, there must be drop ship suppliers, or manufacturers over there that you could easily work with, you might do even better owning the market over there, the US is currently dominated by Amazon, so to beat Amazon's prices and make a lot of profit, you have to sell in high volume, that is why it is seems important to offer thousands of products, that way you can sell something to everyone, then again, you will need you webstore to be currently updated to your dropshipper's inventory data.

Maybe in the EU there isn't so much pressure from Amazon?, not sure.

Or you could become the dropshipper, open up a warehouse and be a distributor.
- Thanks
{{ DiscussionBoard.errors[7799790].message }}

rana1863

11 years ago

I was searching for the same info in the recent part and according to my research meting all these requirements is not easy. Forming an LLC is simple and can be done straight away online. But to get a US based merchant account, US bank account is a must. And here comes the real problem. US bank account for foreigners is very difficult nowadays. They will require you to come to US or simply refuse your application.

Thanks

{{ DiscussionBoard.errors[7782605].message }}

bizgrower

11 years ago

You could probably solve a lot of the issues by hiring a carefully vetted, legitimate US based business agent. Legalzoom.com and US law schools (as in hiring a future lawyer as agent) would be a good place to research. Also, I second the motion to search sba.gov - our government's department for helping small businesses.

Dan

Thanks

Signature

"If you think you're the smartest person in the room, then you're probably in the wrong room."

{{ DiscussionBoard.errors[7782852].message }}

imsas

11 years ago

Yes, most likely you will need a US based company given that you will need a merchant account and most important a EIN (employer identification number) which will be used to generate a sales use tax certificate which is requested by suppliers and manufacturers. Without this certificate you most likely won't be able to buy products to re-sell. How do you get a sales use tax certificate? It varies by state - but you can usually apply online for one.

Thanks

Signature

GablesFurniture.com
furniture deals - home decor blog

{{ DiscussionBoard.errors[7783985].message }}

Green Moon

11 years ago

Forming an LLC in the U.S. is simple and inexpensive (depending on the state you choose, of course). But as rana1863 points out, getting a bank account in the United States is very difficult because the bank needs to verify the person behind the LLC.