How to Form an LLC in Kentucky

For US Individuals and International Investors

Kentucky, also referred to as the Bluegrass State, showcases the splendid intersection of Southern hospitality and business potential. Aside from horse racing, Kentucky is also well-known for its bourbon distilleries and its stunning, gently rolling hills. Furthermore, the state is earning recognition as a business friendly location in the US.

In recent years, both international and US based entrepreneurs have flocked to Kentucky due to its cost-effective supportive state programs and its logistics.

If you are launching a store, manufacturing, logistics, or a service based business, Kentucky is an optimal state to incorporate a Limited Liability Company, or LLC.

In America, LLCs are one of the most popular business structures due to the combination of legal protections, operational flexibility, and tax benefits.

In this guide, we are going to show you the benefits to form an LLC in Kentucky, the step by step guide to starting one, the costs involved, and the critical compliance steps required to maintain active status for your company.

Why Start An LLC in Kentucky?

Outside of its gorgeous landscapes and welcoming people, Kentucky has some unique business opportunities. Many people use Kentucky for its LLC for these following key reasons:

1. Low Costs

With the lowest filing fee of $40, Kentucky leads the pack for the most cost-effective LLCs in the country. Along with a $15 maintenance fee, which dwarfs California’s $800 fee, this is a goldmine for new businesses and startups.

2. Easy and Fast Shipping

Being one of the only business hubs, Kentucky’s location is integral for industries which require constant shipments. Kentucky is a distribution center for major shipping companies like UPS, DHL, and Amazon. With the state being a days ride for over half the country’s population, this is a dream come true for shipping, manufacturing, ecommerce, and other businesses.

3. Business First

In Kentucky, there are a plethora of incentive programs for the business workforce which other states simply do not provide. Programs like the Kentucky Business Investment Program reward businesses which stimulate the Kentucky economy and the workforce with job creation funding and grant funding.

4. Pass-Through Taxation

An LLC in Kentucky automatically qualifies as a pass-through entity for taxation. This indicates that the LLC will not be subject to pay state income tax. Profits and losses will be reported on the owners tax returns thus avoiding double taxation.

5. No Residency Requirement

To have and operate an LLC in Kentucky, you don’t have to be a resident of the state, not even the US. This is quite useful to foreign business owners who wish to tap the US market without having to move physically.

Step-By-Step Guide to Form an LLC in Kentucky

Step 1: Choose a Name for Your LLC

As with any business, an LLC will also have a name and in Kentucky, the name has to be unique and meet the state guidelines:

• It has to bear one of the following: “Limited Liability Company,” “LLC,” or “L.L.C.”
• It cannot bear words like “FBI,” “Treasury” and other words that would make one think that it is a government agency.
• Words like “Bank,” “Attorney,” or “University” and others would need to be vetted as they would need special approval or a license.

To check the name availability, you can use the Kentucky Secretary of State’s Business Name Search Tool. If you wish to reserve a name, you can do so for 120 days by filing a Name Reservation form and a fee of $15.

💡 Tip for International Owners: For owners of LLC who operate under a different name in their home country can register that as a DBA in Kentucky after forming their LLC.

Step 2: Appoint a Registered Agent

Every LLC in Kentucky is required to have a Registered Agent. This is an individual or a company that will receive legal documents, tax notices, and any relevant government mail on your company’s behalf.

Requirements:

• Must be a Kentucky resident or a business entity authorized to operate in Kentucky.
• Must have a physical street address in Kentucky. P.O. Boxes are not acceptable.

For non-residents or those without a physical office in Kentucky, hiring a professional Registered Agent service is a must. Many of them also offer compliance calendars so that you will not miss any important deadlines.

Step 3: File the Articles of Organization

The Articles of Organization is the legal document for your LLC. You can file it:

• Online: Through the Kentucky One Stop Business Portal, which is the fastest method.
• By Mail: Complete the form and send it to the Kentucky Secretary of State’s office.
• Filing Fee: $40 (as of 2025).

Information to provide includes:

• Name of the LLC and the principal address of the office
• Name and address of the registered agent
• Type of management (member-managed or manager-managed)
• Effective date (immediate or scheduled)

Your LLC is officially recognized by the state after your articles are approved.

Step 4. Create an Operating Agreement (Highly Recommended)

An operating agreement is not required by law in Kentucky, but it is very important to explain how the LLC will function.

It usually addresses:

• Ownership shares of each member and their corresponding voting rights
• Procedures and rights to make business decisions
• How profits and losses will be allocated
• Processes to admit new members or remove current members
• Dissolution rules

An operating agreement is important even for single-member LLCs, as it demonstrates the steps taken to protect the business in case of legal issues and supports maintaining the liability protection by showing the separation between personal and business affairs.

Step 5. Obtain an EIN (Employer Identification Number)

An EIN is a business’s equivalent to a Social Security Number and will be required to:

• Open a US business bank account
• Hire employees
• Submit federal and state taxes
• Apply for accounts as a seller and for payment processors (Stripe, PayPal, Amazon Payments)

An EIN can be obtained for free from the IRS.

• U.S. residents can apply online and receive it instantly.
• Non-U.S. residents: Applying via Form SS-4 is possible through mail or fax, even in the absence of SSN or ITIN.

Step 6: Register for Kentucky State Taxes and Licenses

Based on your business functions, the following may apply:

• Sales & Use Tax Permit: For merchants selling physical goods in Kentucky, this is a must.
• Employer Taxes: Mandatory for businesses hiring staff.
• Local Business Licenses: Certain counties or cities issue their own business licenses.

All tax registrations can be completed via the Kentucky One Stop Business Portal.

Step 7: Open a U.S. Business Bank Account

Separating business and personal financial matters is crucial for the protection of personal assets.

You’ll typically need:

• Approved Articles of Organization
• EIN confirmation letter
• Operating Agreement
• Valid identification (passport, driver’s license, etc.)

💡 For Non-Residents: Certain physical banks may require in-person visits, but some online banks and fintech companies specialize in serving non-resident business owners. At Bizstartz, we help you with the entire process.

Step 8: Maintain Your LLC

Post-LLC formation, compliance requirements include:

• File an Annual Report: Submit by June 30 annually with a $15 fee.
• Maintain a Registered Agent: Update their address if changed.
• Renew Licenses & Permits: In some cases, this is required based on the Adjustments industry and Geolocation.

Not following the rules can lead to losing your LLC or getting fined.

Cost Breakdown of Forming a Kentucky LLC

Advantages For International Entrepreneurs

Kentucky is appealing for international entrepreneurs:

• Reduced Costs: One of the most affordable states for LLC creation or upkeep.
• Logistics Advantage: Quick shipping and distribution access to American markets.
• No Physical Presence Required: Business operations can be conducted entirely remotely.

Kentucky’s infrastructure and tax policies are advantageous for the e-commerce and manufacturing sectors, as well as Amazon FBA.

In Summary

Kentucky provides international and domestic entrepreneurs a straightforward LLC formation process, low costs, and access to a well-positioned, business-friendly environment-ideal for expansion.

For those looking to establish a robust business presence in the United States, the process of setting up an LLC is uncomplicated, the costs reasonable, and the potential benefits considerable.

Bizstartz offers full-service solutions for both citizens and non-residents. We manage the entire process, filing the LLC paperwork, obtaining the EIN, providing registered agent services, setting up compliant bank accounts, and fulfilling all jurisdictional obligations.

Frequently Asked Questions (FAQs)

1. Is a non-US citizen able to form an LLC in Kentucky?

Absolutely. There is no citizenship or residency requirement to form an LLC in Kentucky.

2. How long does it take to form an LLC in Kentucky?

If you submit your application online, it can be approved within 1 to 3 business days. For mailed filings, the processing time is 5 to 7 days.

3. What’s the ongoing annual cost?

Applicants can simply pay $15 for the Annual Report alongside any Registered Agent or licensing fees, making it the lowest in the market.

4. Do I need an Operating Agreement?

Not a requirement for you to file, but for maintaining your liability status, it is easy to follow a Operating Agreement.

5. Can I run my Kentucky LLC from outside the U.S.?

Certainly. Many foreign business owners operate LLCs in Kentucky from abroad.