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Can A Green Card Holder Set Up A Delaware LLC?

By Matthew Dochnal | Published May 10, 2024

United States green card

Permanent residents of the United States, including US green card holders, can start businesses and form LLCs in Delaware. In fact, individuals from nearly any country worldwide (with the exception of restricted countries) are eligible to establish a Delaware LLC. 

If you’re a permanent resident aspiring to achieve the American Dream, creating an LLC for your business is a crucial initial step. While forming a Delaware LLC is straightforward, noncitizens must consider additional factors during the formation process.

How To Form A Delaware LLC As A Green Card Holder

U.S. green card holders enjoy the same rights and privileges as US citizens when it comes to starting and operating businesses in the United States. The process of setting up a Delaware LLC is identical for green card holders and US citizens alike.

Here’s how you can form your Delaware LLC:

  Step 1. Choose A Company Name

Your company name can be your own name or a more descriptive name that reflects your business activities. Make sure that the company name has a corporate ending, like “LLC”, “L.L.C.”, or “Limited Liability Company.”

It’s important to choose a unique name that doesn’t conflict with existing companies. IncNow can check the availability of your desired LLC name in Delaware before you proceed with the formation.

  Step 2.  Choose A Delaware Registered Agent

A Delaware Registered Agent is essential for receiving important legal notices on behalf of your LLC, including Service of Process documents such as lawsuits or subpoenas. Since most people who form Delaware LLCs reside outside of Delaware, the state mandates hiring a local Registered Agent. 

IncNow can act as your Delaware Registered Agent, ensuring that legal notices are forwarded to you promptly to avoid penalties or default judgments.

  Step. 3 File A Certificate of Formation

The Delaware Certificate of Formation is the crucial document that officially establishes an LLC in Delaware. The Certificate is filed with the Delaware Secretary of State’s Division of Corporations and is made part of the public record. 

Delaware only requires the company name and the address of the Registered Agent on an LLC’s Certificate of Formation.

  Step 4. Prepare An LLC Operating Agreement

The LLC Operating Agreement is the company document that outlines the structure of an LLC. It should detail who the company’s owners and managers are. The LLC Operating Agreement is vital for managing your business properly and avoiding legal issues.

Can A Delaware LLC Have Foreign Owners?

Yes, Delaware LLCs are allowed to have foreign members. In this context, “foreign” refers to foreign nationals residing outside the United States. 

The ownership structure of a Delaware LLC is versatile, allowing for both domestic and foreign individuals, foreign investors, and even domestic or foreign companies to be included as members. This flexibility makes the Delaware LLC the preferred entity type by entrepreneurs all over the world. 

Who Cannot Own A Delaware LLC?

Certain individuals are prohibited from forming US business entities, such as Delaware LLCs, primarily due to their nationality or residency in countries sanctioned by the United States government. The US Department of Treasury’s Office of Foreign Assets Control (OFAC) enforces these restrictions, which are designed to prevent US persons from conducting business with certain nations. 

Currently, some of the restricted countries include Russia, North Korea, Iran, Libya, and Syria. Individuals from these countries may face limitations or are unable to form or own a Delaware LLC due to these sanctions.

Delaware registered agent companies must follow strict rules, including not working with individuals or businesses on the Specially Designated Nationals (SDN) List. If a registered agent service learns they represent a company linked to someone on this list, they have to stop being the company’s registered agent. 

The company then has 30 days to find a new registered agent. If they don’t, the state will cancel the company’s registration. This rule helps ensure that all companies comply with U.S. laws and keeps the process of forming an LLC in Delaware reliable and lawful.

What Is OFAC?

The Office of Foreign Asset Control (OFAC) is a branch of the U.S. Department of Treasury. It manages the Specially Designated Nationals and Blocked Persons List (SDN List), which contains around 6,300 names of companies, organizations, and individuals who are banned from doing business with U.S. entities. 

OFAC usually adds individuals to the SDN List if they are connected to groups or organizations considered a threat to U.S. national security.

Do I Need A U.S. Tax ID Number To Open A Delaware LLC?

No, you do not need a U.S. tax ID number, such as a Social Security Number (SSN) or Taxpayer Identification Number (TIN), to register a company in Delaware. The only details required to be provided to the Delaware Secretary of State’s office are the name of the company and the address of its Registered Agent in Delaware.

With a Delaware Registered Agent, you have everything necessary to establish your LLC. 

ITIN vs. EIN

The Individual Tax Identification Number (ITIN) is a tax ID number issued by the IRS. It enables individuals who cannot obtain a Social Security Number to pay taxes on income earned in the United States. Conversely, an Employer Identification Number (EIN) is the tax ID number assigned to business entities, including LLCs, to identify them as tax-paying entities in the U.S.

When deciding where to form your company, consider that Delaware has advantages over your home state that may benefit you. Go