Amazon Dropshipping with LLC: The Ultimate Guide for Non-U.S. Entrepreneurs

Amazon dropshipping is one of the most lucrative options for anyone seeking a location-independent online business.

Entrepreneurs from different parts of the world are getting onto it due to low initial investment, access to a large number of consumers, and the model being easily scalable.

However, if you intend to grow, specifically as a non-U.S. resident, you will require more than just a seller account. Operating a U.S. business entity, such as an LLC, is crucial.

This thorough guide will cover:

• What is Amazon dropshipping?
• Why you should create an LLC for Amazon dropshipping.
• Benefits of an LLC for non-residents.
• How to start Amazon dropshipping with an LLC (step-by-step).
• Legal compliance and Amazon policies.
• Taxes and ongoing obligations.
• Expert tips for success.

So let’s get started.

What is Amazon Dropshipping?

In Amazon dropshipping, the seller does not keep any inventory of the products being sold. Instead, upon receiving an order from his/her store on Amazon, the seller notifies a supplier who ships the purchased product directly to the buyer.

As a middleman, you earn the difference between the selling price and the supplier’s cost.

Here’s how it goes:

• You create listings for products on Amazon.
• A customer orders the product.
• You purchase it from a supplier, for example, CJ Dropshipping or a private wholesaler.
• The supplier then directly ships the product to the customer.
• You keep the profit the margin.

Advantages of Amazon Dropshipping.

✅ No Inventory Required.

✅ Low Initial Costs

✅ Simple To Expand/Scale Business

✅ Massive Customer Base (> 300 million on Amazon)

✅ Amazon takes care of payment processing & manages website.

Nonetheless, Amazon is known for enforcing rigorous policies regarding dropshipping, which often requires operating under a verified LLC for legal credibility and compliance reasons.

Why Start Amazon Dropshipping with LLC?

An LLC (Limited Liability Company) will provides you with flexibility, professionalism, and legal protection. If you live in Nepal, India, or any other place outside the U.S., having an LLC will give you a strong upper hand in business.

Here’s the key benefits of an LLC that makes it so recommended.

1. Protects Against Legal Liability

Your business and your personal finances are separated when you create an LLC. Therefore, if anything goes wrong with the Amazon store, whether it’s a lawsuit or a debt, your personal belongings such as your home, savings, and car are secure.

2. Amazon Seller Central Compliance

• To complete the signup on Amazon Seller Central, the business account needs to have:Business verification documents
• Tax identification (EIN)
• Bank account details
• A U.S. address and phone number.

An LLC helps you meet all these requirements.

3. Professional Image & Trust

Many banks and suppliers tend to avoid doing business with unregistered individuals. Your LLC will make your business stand out concerning supplier relations, payment processors, and even with Amazon shoppers.

4. Access to U.S. Bank Accounts and Payment Tools

With an LLC, you can open a U.S. bank account such as Mercury, Relay, and Wise. This is necessary to receive payments from Amazon and to handle transactions.

5. Tax Benefits

Non-residents can take advantage of favorable U.S. tax laws by forming an LLC. If you have no U.S. office, employees, or physical presence, your LLC may pay zero U.S. federal income tax. (Always consult a CPA.)

Top States for LLC Formation (with Fees)

Here’s a comparison of popular states for dropshipping LLCs:

✅ Bizstartz Recommendation: For non-residents, Wyoming or New Mexico are the best states due to low costs, no state income tax, and privacy.

Step-by-Step: How to Start Amazon Dropshipping with an LLC

Step 1: Choose a State and Register Your LLC

• Choose an LLC name that is not already registered.
• Select your state (Wyoming and New Mexico recommended).
• Appoint a registered agent in that state.
• File Articles of Organization.
• Receive Certificate of Formation.

👉 Bizstartz handles all of this for you, including free registered agent for one year.

Step 2: Get an EIN (Employer Identification Number)

You will need an EIN to:

• Open a business bank account
• Register with Amazon
• File taxes

Non-residents can fill out Form SS-4 or have Bizstartz obtain it without an SSN or ITIN.

Step 3: Get a U.S. Address and Phone Number

For Amazon verification, you must have:

• A U.S. business address, which can be a virtual registered agent address
• A U.S. phone number, which can be obtained from OpenPhone or Sonetel

Step 4: Open a U.S. Business Bank Account

To receive payments, Amazon requires you to link a U.S. bank account. You can open an account with:

• Mercury (virtual bank for startups)
• Relay Financial
• Wise Business (multi-currency support)

Remember to bring your LLC documents and EIN.

Step 5: Register for Amazon Seller Central

Subscribe for Amazon Seller Central’s Professional Plan ($39.99/month) and prepare the following documents for submission:

• LLC name and details
• EIN
• U.S. address and phone
• U.S. bank account and debit/credit card
• ID verification (passport for non-residents)

Step 6: Find Compliant Dropshipping Suppliers

Amazon prohibits retail arbitrage, so make sure your supplier ships unbranded goods and allows for blind shipping (no invoices or logos).

Recommended Options:

• CJ Dropshipping (U.S. warehouse available)
• Alibaba or AliExpress (with customization)
• Print-on-demand services: Printful, Printify
• U.S. wholesalers found through SaleHoo or Inventory Source

Checklist:

• Shipping: Fast (2–7 days)
• Business-name custom invoices
• Return handling policies

Step 7: List Products and Start Selling

Improve your product listing for visibility and sales.

• Use relevant keywords in title and description
• Add high-quality images
• Offer competitive prices
• Provide fast and trackable shipping

While customers pay through Amazon, you must manage the order, shipping, tracking, and customer service.

Stay Compliant: Amazon Dropshipping Policy Overview

To stay compliant, you need to:

• Be the seller of record
• Remove third-party branding
• Invoices must show your branding and packaging
• Manage returns
• Provide customer service
• Maintain accurate inventory and shipping records

Break these rules with Amazon:

• Shipping products from another retailer
  
• Invoices or packing slips showing another business
  
• Late shipping and tracking issues

Tip: Facing a violation will risk suspension or a permanent ban. Work with proper wholesale suppliers.

Ongoing Compliance and Taxes for a Dropshipping LLC

While you operate an Amazon dropshipping business through a U.S. LLC as a non-resident, here is a simple breakdown of the compliance and tax obligations:

Federal Taxes:

• Based on your LLC’s structure, if you lack U.S. sourced income, it qualifies as zero U.S. tax exposure.
• Your LLC will need to file Form 5472 and pro forma 1120 on an annual basis. These forms are necessary for foreign held LLCs.

State Taxes:

Depends on the state. For example:

Sales Tax

• Amazon collects and remits sales tax in most states on your behalf
  
• You do not need to register for sales tax in most cases

BOI Filing (Beginning 2024):

Each LLC will file one Beneficial Ownership Information (BOI) report to FinCEN. If there are no changes in ownership, it is a one-off filing.

👉 Full-service compliance solutions including BOI, 5472, and tax filings are provided by Bizstartz.

Long-Term Success Tips

✅ Start with a niche: Focus on a category like home decor, fitness gear, or pet accessories.

✅ Use software tools: Tools like Helium10, JungleScout, or AutoDS can help with research, automation, and fulfillment.

✅ Optimize your listings: Use A/B testing and keyword-rich content.

✅ Stay compliant: Avoid sourcing from Amazon or retail stores. Work with private suppliers.

✅ Reinvest profits: Scale slowly. Test new products, invest in branding, and consider private labeling.

Final Thoughts: Is Amazon Dropshipping with an LLC Worth It?

Of course it is. With the right methods, forming an LLC can shift you into a serious global e-commerce powerhouse.

You can:

• Maintain a legal and formal business presence
• Open bank accounts in the U.S.
• Receive approvals from Amazon
• Legally pay lower taxes
• Get quality suppliers

Start Your Amazon Dropshipping LLC Today with Bizstartz

At Bizstartz, we help international entrepreneurs form U.S. LLCs, and launch Amazon businesses successfully.

We offer:

• Business formation services (LLC in WY, NM, DE, etc.)
• Tax identification number request
• American bank account establishment
• Phone number and address for Amazon
• BOI submissions, 5472 disclosures, and others

👉 Create your Amazon LLC immediately with Bizstartz

Frequently Asked Questions (FAQs)

1. Is it possible for me to start Amazon dropshipping from outside of the USA?

Of course. Amazon permits international sellers on their platform, but you need to fulfill certain criteria. The most vital is to have an American company typically an LLC alongside a business address, phone number, bank account, and tax ID (EIN). Companies like Bizstartz assist overseas business owners with everything through virtual means.

2. Can I use LLC for Amazon dropshipping?

Absolutely, as long as you adhere to the guidelines set by Amazon. Your LLC must be the “seller of record,” meaning all sales invoices must be issued in the name of the business. Also, your supplier must not use their own branded packaging or invoices for shipping. You are liable for managing customer support and returns as well. Also don’t resell products from Walmart, Target, or other stores because Amazon doesn’t allow that.

3. As a non-resident, what are the tax duties for my dropshipping LLC?

If you are a non-US resident without a US office, employees, or physical presence, you might not be liable for US federal income taxes. That said, you still need to:

• Submit Form 5472 and a pro forma 1120
• Complete the BOI (Beneficial Ownership Information) report
• State-specific reporting, if needed

Amazon does most sales tax collection and remittance automatically as well. It’s still recommended to get in touch with a tax compliance specialist or let Bizstartz handle your compliance.

4. How long does one have to wait for the formation of an LLC and start selling in Amazon?

The overall timeline estimate ranges within 7 to 21 days. This varies based on how fast each step is completed:

• LLC Formation: 1–3 business days (with Bizstartz)
• EIN: 1–5 business days
• U.S. address and phone: Same day
• Bank account: 3–7 business days
• Amazon Seller Central approval: 1–14 days post application

Bizstartz streamlines this process so most clients can get fully set up in under 14 days.