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You've touched upon a large and complicated subject but here are couple things to get you started.

First off, you need to be very clear in your own mind about your venture vs. your consulting work.

Consulting is simple. There are three main reasons to form an LLC as a consultant: you can isolate yourself from liability; you can snag more work as some companies prefer to work corp-to-corp rather than with individuals; and finally, you can utilize various legal mechanisms (such as managing vs. passive partners for example) to minimize your tax liability.

It sounds like none of the above applies to you very much. It's too much hassle to sue someone in a foreign country, companies prefer corp-to-corp for reasons largely irrelevant to outsourced consultants (who for example cannot claim US unemployment benefits), there is not much legal maneuvering you can do with a one-person partnership, etc.

Your venture is a whole other beast. First, keep in mind that you need to foreign-qualify your LLC in every state where you do business. It's hard to know whether you will need to foreign-qualify since you did not provide much information as to the nature of your venture, but for example accepting orders in New York means you do business there and to foreign-qualify in NY will run you over $1,000 (and if you are transacting 100% virtually, I have a hard time understanding why you need a US-based LLC). Second, if you plan to raise capital or incentivize your talent via equity, it is much easier to do so with a corporation than with an LLC. Third, there are tax implications pertaining to drawing partner distributions vs. shareholder equity, etc.

As you can see, there are no quick answers and you need to provide much more detail about your plans. In any event, I really recommend that you get a preliminary 1-hour consult with a lawyer and an accountant. If you feel that you don't need to go that far at this stage, then you probably don't need an LLC either.

To your other questions, LLC paperwork could not be easier. Book keeping is easy too, you can use quickbooks online ($17/month) or clearcheckbook.com (donation). Have an accountant show you how to reconcile your bank account once per month, and you are all set.



Thanks for all the answers!

My venture would be pay-as-you-go SaaS app. But I dont think I'd be profitable right away so I'll probably keep freelancing for some time. And I sometimes get paid via ScriptLance/eLance/etc, which are US-based..

Yes, the main reasons why I want US-based LLC is that it looks much more reliable for some americans. Also, it's very expensive to form a company in my home country (Lithuania).

Now the only very unclear thing is if renting servers in US and having customers with US billing address counts as US-based incomes.

Customers probably doesnt count as 'infrastructure'. But what about servers, payment processor etc?

Does anybody know a good (and not that expensive) lawyer to advice on all that stuff?


I would say that if your plan is to provide SaaS, don't worry about it until you hit profitability. At that point, if you must have a US entity, I recommend looking into Vermont virtual corporations/LLCs.

For consulting, you could look into a Nevada LLC (cheap and low paperwork requirements) but it's not necessary. Companies that are open to outsourcing to Lithuania already know they are not working with a US-based company, while companies that want a US-based LLC will most likely have a whole bunch of "due diligence" requirements that you can't meet anyway (such as number of years in business, number of employees, etc). Trust me, your big problem is going to be getting paid as promised, not your lack of a US entity.




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