Using Stripe and PayPal with a US LLC

Why founders form an LLC for this

Many founders form a US LLC because a payment provider, marketplace or app store works better, or only, with a US business. With a US LLC, an EIN and a US bank account you can usually open a US account with Stripe or PayPal and receive payouts in US dollars.

Approval is the provider's decision, not ours, and it depends on you and your business as much as on the company.

What you will usually need

• The LLC's legal name and EIN, exactly as on the IRS letter.
• A US business address. A PO box or the registered agent address is often refused.
• A US bank account in the LLC's name for payouts.
• Details about the representative, the person opening the account. Providers typically ask for a date of birth, home address and an ID document. Owners without an SSN are usually verified with a passport, though the provider decides case by case.
• A website with a clear product, prices, contact details, a refund policy and terms.

The order that works

1. LLC approved by the state.
2. EIN issued. See getting an EIN without an SSN.
3. US bank account opened. See opening a US bank account.
4. Website live with policies.
5. Payment account opened and verified before you start selling.

Skipping ahead, for example applying before you have the EIN letter, is the most common cause of delays.

Avoiding holds and frozen accounts

• Describe your business accurately in the application. A mismatch between the description and what customers buy triggers reviews.
• Start with normal volumes. A sudden spike from a new account is a common reason for a hold.
• Keep refund and dispute rates low, and answer disputes quickly.
• Check the provider's restricted business list. Some industries are not allowed at all.
• Keep the same name, address and EIN on every form.

Tax forms from providers

Payment providers may issue US information returns, such as Form 1099-K, to the LLC's EIN. You may also be asked for a Form W-9 because the LLC is a US company, even though its owner is foreign. Your tax preparer will take these into account when preparing the Form 5472 filing.

This is general information. Provider requirements change; always check their current documentation.

PayPal specifics

A US PayPal business account is tied to the country of the business, so the LLC's US details are used. PayPal usually asks to link a US bank account in the LLC's name to withdraw funds, and may ask for documents about the company and the person who controls it.

Marketplaces and app stores

Marketplaces and app stores that pay out to US companies ask for much the same: legal name, EIN, a US bank account and tax forms. Amazon, for example, runs its own identity verification, which can include a video call. App store developer programmes that accept organisations typically show the company's legal name as the seller, so get it right on the Articles.

Currency and getting money home

Payouts land in your US account in dollars. Moving money from the LLC to yourself is a distribution: record it, and keep it out of everyday personal spending. How that distribution is taxed where you live is a question for your local tax adviser, and every transfer between you and the LLC is something your US preparer needs for the yearly filing.