Forming a U.S. company can open doors to global markets, investor credibility, and smoother payment processing—but many entrepreneurs underestimate the true cost of doing business in America. At MyUSAService, we often hear from international founders who expected to pay only the basic state filing fees, only to later face unexpected compliance requirements, maintenance costs, and penalties.
While forming a U.S. LLC or Corporation can be an excellent move strategically, it’s essential to look beyond the upfront registration fee. In this post, we’ll uncover the hidden costs of forming and maintaining a U.S. entity, so you can make well-informed decisions and avoid common (and costly) surprises.
State Filing and Annual Report Fees Vary Widely
One of the first hidden costs you’ll encounter is that not all U.S. states are created equal. While Delaware, Wyoming, and Florida are popular for their business-friendly environments, each state has its own filing fees, annual report fees, and franchise taxes.
For example:
Delaware charges $90 to form an LLC, but corporations must pay a minimum $225 annual franchise tax—potentially much more depending on share structure.
California requires an $800 annual franchise tax, even if your LLC earns no income.
Nevada offers privacy protections but has higher fees than many other states.
Hidden Costs Alert: Entrepreneurs often choose a state based on low formation fees without realizing that ongoing costs and filing requirements can be significantly more expensive over time.
Registered Agent Fees Are Recurring
Every U.S. business entity must appoint a registered agent—a designated person or company to receive legal and tax documents on behalf of the business. If you don’t live in the U.S., you must hire a professional registered agent service.
These services typically cost between $100 and $300 per year, depending on the provider and level of service. Choosing the cheapest provider can lead to poor service, missed legal notices, or non-compliance.
Hidden Costs Alert: Many budget services offer low first-year rates and raise prices in the second year—often without clear notice. Always review renewal terms carefully.
Compliance and Reporting Requirements Add Up
After your U.S. entity is formed, you’re legally required to file various reports and maintain proper records. These requirements can include:
Annual reports with the state
IRS Form 5472 (for foreign-owned LLCs)
Franchise tax filings
Beneficial Ownership Information (BOI) filings under the Corporate Transparency Act
Employer Identification Number (EIN) applications
Operating agreements or bylaws
Failure to file on time can result in penalties, interest, or administrative dissolution of your company.
Hidden Costs Alert: You may need to hire a compliance expert or accountant to handle these tasks—adding $500–$1,500+ in annual costs depending on your structure and filing obligations.
U.S. Tax Filings—Even If You Don’t Owe Anything
Many founders incorrectly assume that if they don’t live in the U.S. or don’t generate income there, they don’t need to file U.S. tax returns. This is not true.
Foreign-owned LLCs and corporations often must file:
Form 1120 (for corporations)
Form 5472 with Form 1120 (for single-member LLCs)
Form 1040-NR or other informational forms depending on ownership and business activity
Even if your company made no income, these forms are required. Late or missing filings can trigger IRS penalties starting at $25,000 for Form 5472 violations.
Hidden Costs Alert: Hiring a qualified U.S. tax preparer can cost $400–$2,000 per year depending on the complexity of your business—even if you have no U.S. customers or sales.
Opening and maintaining a U.S. Business Bank Account
A U.S. bank account is essential for smooth payment processing, especially for SaaS businesses, e-commerce brands, and freelancers. However, many banks require in-person visits, SSNs, or U.S. addresses to open accounts.
To navigate this, many international founders:
Work with fintech platforms (which may charge monthly or transaction fees)
Hire an agent or attorney to assist in opening an account
Travel to the U.S. themselves (an often-overlooked travel cost)
Once open, banks may charge:
Monthly maintenance fees
Wire transfer fees
Currency conversion fees
Hidden Costs Alert: If you don’t maintain a minimum balance or generate regular activity, your account may be closed, resulting in disruptions or further compliance issues.
State and Local Taxes (Even Without U.S. Presence)
In addition to federal tax compliance, you may owe state income taxes or sales taxes depending on where your customers are located—even if your company is 100% remote and non-resident.
For example:
Selling products to customers in California, New York, or Texas may create sales tax obligations.
Hiring U.S.-based contractors can create a “nexus” that triggers tax filings in their state.
Sales tax compliance requires software tools or accounting services to track, collect, and remit taxes correctly.
Hidden Costs Alert: Many e-commerce sellers discover too late that they owe back taxes, interest, and penalties in multiple states. Resolving these issues can cost thousands in legal and accounting fees.
Bookkeeping and Accounting Complexity
U.S. bookkeeping requirements are more involved than those in many other countries. If your U.S. entity receives income, you must track all business transactions and be able to provide organized records for tax filings and audits.
You may need to:
Use accounting software like QuickBooks or Xero
Hire a bookkeeper or CPA familiar with U.S. GAAP (Generally Accepted Accounting Principles)
Prepare and reconcile monthly financial statements
Hidden Costs Alert: Basic bookkeeping for a small U.S. LLC may cost $100–$300 per month, and accounting or end-of-year tax services can add another $1,000+ annually.
Bonus: Currency Exchange and Payment Processing Fees
If your business receives international payments or converts foreign currency into USD, you’ll encounter additional fees from:
Payment processors (Stripe, PayPal, etc.)
Currency exchange services
U.S. banks charging wire reception fees
While these fees may seem small individually, they add up over time and impact your bottom line—especially if you’re dealing with high transaction volumes.
Hidden Costs Alert: If you’re scaling globally, optimizing your payment structure and currency strategy can significantly reduce these costs.
Conclusion
Forming a U.S. LLC or Corporation offers credibility, growth potential, and access to a strong financial ecosystem—but only when properly maintained. The hidden costs of compliance, tax filings, banking, and state obligations can sneak up quickly and eat into your profits. To avoid surprises, refer to our U.S. Business Compliance Guide for Non-Residents for step-by-step insights and best practices.
