The two structures work very differently for non-US owners — here's the short version of how to decide.

The key difference

An LLC (Limited Liability Company) is a pass-through entity. You pay personal income tax on profits. It's simple, flexible, and built for most business models.

A C-Corp (C Corporation) is a separate tax entity. The company pays corporate tax on profits, and you pay personal tax on dividends or salary. It's more complex but designed for businesses seeking venture capital.

For foreign founders: LLC is usually the right choice

If you're outside the US and forming your first company, an LLC makes sense because:

  • Tax efficiency: Pass-through taxation means profits flow to you personally, avoiding double taxation. This matters hugely for non-US tax residents.
  • Simplicity: Fewer compliance requirements, simpler accounting, less reporting to the IRS.
  • Flexibility: You can change ownership, add partners, or shift the business structure without major hassle.
  • Banking: US banks recognize LLCs immediately and will open accounts for non-US owners (usually).

When C-Corp makes sense

Choose a C-Corp if:

  • You're raising venture capital. VC investors expect C-Corps.
  • You're planning major reinvestment of profits into the company. A C-Corp can retain earnings at the corporate level.
  • You expect high personal income and want to split tax burden. (This is rare for early-stage founders.)
The short answer: Unless you're actively raising VC, form an LLC. It's simpler, cheaper to maintain, and more efficient for pass-through taxation outside the US.

How we help

At Foundly US, we help you pick the right structure for your business, not what's "coolest" on paper. We walk through your specific situation—revenue expectations, geographic location, long-term plans—and recommend accordingly.

Ready to move forward? Start with a quick form and we'll give you a full breakdown of costs and timeline for your chosen structure.