How to Set Up a US LLC as a Taiwan Company Selling on Amazon

Selling on Amazon as a foreign company is legally permitted, but it creates friction at every stage of your US business. Without a US entity you cannot open a US business bank account, which forces you to rely on third-party payment processors like Payoneer or Airwallex that charge 1–2% per transfer. On USD 500,000 in annual Amazon revenue that fee amounts to USD 5,000–10,000 a year in avoidable cost — enough to fund a year of Amazon PPC advertising for a mid-size brand.

A US LLC also creates legal separation between your Taiwan assets and US product liability. If an American customer files a product injury lawsuit, the claim targets the US entity rather than your Taiwan factory directly. This separation is not absolute — courts can pierce the corporate veil if you commingle funds or ignore corporate formalities — but maintaining a separate US bank account, formal Operating Agreement, and clean bookkeeping provides meaningful protection that operating as a bare foreign seller does not.

From a tax perspective, a single-member LLC owned by a foreign company is treated as a disregarded entity for US federal income tax, meaning its profits flow through to the Taiwan parent. However, the LLC must still file Form 5472 and Form 1120 annually with the IRS to report transactions with its foreign owner. Missing these filings carries a USD 25,000 penalty per form per year — a consequence that surprises many first-time Taiwan exporters who assumed the LLC had no US tax obligation because it had no US employees.

Beyond Amazon, a US LLC is required or strongly preferred by US wholesale distributors, retail buyers at Walmart and Target who need a domestic vendor number, and US trade show organizers whose exhibitor contracts require a US-registered entity. The one-time formation cost of USD 300–1,500 is typically recovered within the first few months through payment fee savings and unlocked distribution channels.

For the vast majority of Taiwan Amazon sellers, a single-member LLC is the right choice. It offers pass-through taxation, requires only one formation document (Articles of Organization), costs USD 50–300 per year in state fees to maintain, and allows flexible profit distribution among multiple Taiwan partners regardless of ownership percentage. There is no US corporate income tax at the LLC level — profits are taxed only at the owner level under Taiwan's tax rules or via withholding on US-sourced income.

A C-Corporation is necessary only if you plan to raise US venture capital or issue equity to US employees via stock options. US institutional investors strongly prefer Delaware C-Corps because US securities law and deal structures are built around that format. If your five-year plan includes a USD 5M+ Series A from a US fund, form a Delaware C-Corp from the start — restructuring later triggers complex tax events under both US and Taiwan law.

The practical operational difference most Taiwan sellers encounter is tax treatment of distributions. A C-Corp pays 21% US corporate income tax on US-sourced profits before distributing dividends to foreign owners, who then pay a 30% US withholding tax on dividends (reduced to 10% under the US-Taiwan bilateral tax agreement). An LLC avoids the 21% corporate layer entirely, making the effective tax rate substantially lower for a profitable Amazon business.

Whatever structure you choose, draft a proper Operating Agreement (for LLCs) or Bylaws and Shareholder Agreement (for C-Corps). Banks require these to open a business account, and courts look to them when determining whether proper corporate separation was maintained. A US business attorney charges USD 500–1,500 to draft a standard foreign-owned LLC Operating Agreement — money well spent to avoid having a court later rule that your LLC was a mere alter ego of your Taiwan company.

You can form a US LLC in any state regardless of where your customers or Amazon warehouses are. Wyoming is the practical choice for most Taiwan Amazon sellers: the formation fee is USD 100, annual maintenance is USD 60, there is no state income tax, no franchise tax, and the state does not require the owner's name to appear in public records. Wyoming also has some of the strongest charging order protections of any US state, making it harder for creditors to attack your LLC ownership interest.

Delaware is preferred when investor relations matter. Its Court of Chancery has centuries of corporate law precedent that makes disputes predictable, and US private equity firms and strategic acquirers expect target companies to be Delaware entities. Delaware charges a flat USD 300 annual fee for LLCs and has no state sales tax. If you plan to exit to a US buyer or raise institutional capital within five years, start in Delaware and avoid a costly conversion later.

Nevada is marketed aggressively as a tax-friendly formation state but charges higher annual fees (USD 200+) than Wyoming with no additional practical benefit for foreign-owned e-commerce businesses. California, New York, and Washington require companies registered there to file state income tax returns and pay additional fees even if the business has no employees or office in those states — making them poor choices for a US formation entity.

Important: where you form your LLC does not determine where you owe sales tax. Amazon FBA stores your inventory in fulfillment centers across 20+ states, creating sales tax nexus in each of those states regardless of your LLC's formation state. Use TaxJar (USD 19–99/month) or Avalara (USD 50–200/month) from your first FBA shipment to collect and remit sales tax automatically in every nexus state. The Wayfair v. South Dakota (2018) Supreme Court ruling means you likely have nexus in states like California, Texas, and Florida even without physical inventory there.

Step one is engaging a registered agent in your chosen state — a service that receives legal documents on behalf of your LLC. Northwest Registered Agent, ZenBusiness, and Registered Agents Inc. each charge USD 49–150 per year and send annual report reminders. Their address becomes your LLC's registered address; your Taiwan office address appears as the principal business address. File Articles of Organization with the Wyoming Secretary of State online at wyomingllc.com; the USD 100 fee is paid by credit card and the Certificate of Organization arrives within 1–3 business days.

Apply for a US Employer Identification Number (EIN) from the IRS immediately after receiving your Certificate of Organization. As a foreign owner without a US Social Security Number, you must file Form SS-4 by fax or mail — the telephone application method is unavailable for foreign owners. IRS processing takes 4–8 weeks by mail. Third-party EIN services (USD 100–200) use a US-address intermediary to accelerate this to 2–4 weeks. You cannot open a US bank account without the EIN.

Mercury Bank is the most practical US business bank for foreign-owned LLC e-commerce sellers: fully remote account opening, no monthly fees, ACH integration with Amazon Seller Central, and API connections to QuickBooks and Xero. Relay Financial and First Internet Bank are solid alternatives. You will need your EIN, Certificate of Organization, Operating Agreement, and passport. Mercury typically approves accounts within 3–7 business days. Once the account is open, update your Amazon Seller Central banking information under Account → Deposit Methods.

Total cost to go from idea to operational US entity: registered agent first year USD 100–150, Wyoming state filing USD 100, EIN service USD 100–200 (or free in 6–8 weeks direct), Operating Agreement from attorney USD 500–1,500, US bank account USD 0. Budget USD 1,000–2,000 all-in for a properly documented setup. Annual ongoing costs: registered agent USD 100–150, Wyoming annual report USD 60, US CPA for Form 5472/1120 USD 1,500–3,000, sales tax software USD 300–600.