Selecting a suitable business structure is among the first considerations for any entrepreneur looking to expand internationally.
Freelancers, e-commerce sellers, founders of SaaS companies, and worldwide investors all encounter variations of this consideration. The business structure you choose helps shape the taxes you will incur, the degree of credibility you will attain, and the business interactions you will draw.
International founders often attracted to the U.S. Limited Liability Company (LLC) and the UK Private Limited Company (LTD) options.
Both U.S. LLC and UK LTD offer limited liability, significant dependence internationally, and remote registration for non-residents, but they significantly differ in compliance, privacy, structure, and taxation.
This guide will assess the structure in detail, contrasts their facets, and assist in deciding on the most appropriate business vision.
1. Overview: US LLC vs. UK LTD
Before diving deep, let’s understand what these two structures represent and how they differ at a glance.
| Criteria | U.S. LLC | UK LTD |
| Full Form | Limited Liability Company | Private Limited Company |
| Jurisdiction | State-level (each U.S. state has different rules) | Nationwide (governed by Companies House) |
| Legal System | Common Law (state-specific statutes) | Common Law (Companies Act 2006) |
| Reputation | Highly respected globally, especially in tech and e-commerce | Strong credibility across Europe, Middle East, and Asia |
| Ownership Type | Members (can be individuals or companies) | Shareholders (issue shares upon incorporation) |
| Management | Member-managed or manager-managed | Director-managed |
| Formation Time | 1–3 business days | 1–2 business days |
| Formation Cost | $100–$300 (depending on state) | £12–£100 (depending on filing method) |
| Annual Compliance | Low to moderate (varies by state) | Moderate (accounts + confirmation statement) |
| Taxation Model | Pass-through (profits taxed at owner level) | Corporate tax system |
| Public Disclosure | Some states allow privacy | All directors and shareholders public |
| Banking Access | Easy access to U.S. fintechs and international banks | Excellent access to UK/EU banking and fintech services |
Both structures serve global founders well—but choosing the right one depends on where your clients are, how you plan to withdraw profits, and what level of compliance you’re comfortable with.
2. What is a US LLC?
A US Limited Liability Company (LLC) serves as a hybrid, flexible, and simple structure business design that permits one to operate commercially like a sole proprietor while providing corporate liability protection.
While it is true that each LLC is subject to the laws of the state in which it is incorporated—Wyoming, Delaware, Florida, New Mexico, etc.—the benefits of each remain largely the same.
Core Features of U.S. LLCs
- Limited Liability Protection: Members of the LLC are protected from any personal liability for debts of the company. Their liability is limited to what they personally invested in the business.
- Pass-Through Taxation: LLCs do not pay taxes on profits made, nor do they pay taxes on revenue generated for the business. Instead the profits and losses “pass through” to the members where they are reported on each member’s tax return. Non-U.S. members that qualify will not owe U.S. taxes if their income is not “effectively connected.”
- Operational Flexibility: LLCs are not required to have a board of directors, annual meetings, or any of the other bureaucratic structures that other business entities must have.
- Privacy: In states such as Wyoming and New Mexico, you can have anonymous ownership which means you can conceal your identity from public record.
- Ease of Formation: You can form an LLC on the internet and in as little as 1-3 business days, you can have an LLC with very little paperwork.
Advantages of Forming a U.S. LLC
- Tax Efficiency for Non Residents: Non-U.S. residents that conduct their business outside of the U.S. and do not have U.S. employees can be exempt from U.S. federal taxes.
- Worldwide Trust: Having a U.S.-registered business gives you trust and credibility in global markets, especially for U.S-based customers and even for payment processors and marketplaces like Amazon and Stripe.
- Access to Premium Payment Solutions: Setting up a U.S. LLC and integrating with Stripe, Wise, PayPal and other U.S. fintech companies becomes a straightforward process.
- Minimal Upkeep: Compared to other corporate structures, countries do not give you corporate structures.
- Suitable for Digital Enterprises: The LLC and its tax system focus on providing flexibility and simplicity to American e-commerce, SaaS, and online service businesses.
Most Applicable To:
- Amazon sellers, dropshippers, and Shopify store owners.
- Freelancers and consultants serving U.S. or international clients.
- SaaS and tech startups.
- Non-U.S. residents looking to access payment gateways in the U.S.
- Entrepreneurs seeking limited liability and reduced tax exposure.
3. What Is a UK LTD?
A UK Private Limited Company (LTD) is a separate legal entity registered under the Companies Act 2006, which means the company itself is legally responsible for its debts and obligations, not its owners.
UK LTDs are widely used by entrepreneurs in the UK, Europe, Asia, and Africa, and are particularly favored for their credibility, structured accounting, and strong legal protection.
Key Features of a UK LTD
- Independent Legal Entity: The company is separate from its shareholders and directors. It can own properties, open bank accounts, and sign contracts in its own name.
- Corporate Structure: In a UK LTD, there are shareholders and directors. One person can take on both roles.
- Fixed Corporate Tax System: Profits are taxed at a flat rate of 25% and dividends can be paid out afterward.
- Public Transparency: The UK maintains a transparent registry. Company information, including directors and shareholders, is publicly accessible at Companies House.
- Professional Reputation: A UK LTD offers a strong corporate image. This is especially important in industries such as consulting, finance, and other service-based businesses that rely on professionalism and trust.
Advantages of a UK LTD
- Global Trust: The UK offers a stable legal system and strong regulatory environment, which boosts the international credibility of its companies.
- Access to UK and EU Banking: UK LTDs can open accounts with traditional banks such as HSBC and Barclays, as well as with fintech platforms like Wise, Revolut, and Monzo.
- Double Tax Treaties: The UK has a tax treaty with over 130 countries, which helps reduce or eliminate double taxation on cross-border business activities.
- Easy and Fast Registration: A company can be incorporated online through Companies House in as little as 24 hours.
- Ideal for European Operations: Although the UK withdrew from the EU, UK entities are maintaining strong business relations with EU clients and suppliers.
Best Suited For
- Consulting and professional service companies.
- Businesses operating or targeting customers in the UK, or the EU.
- Businesses requiring VAT registration.
- Entrepreneurs reinvesting profits within the company.
- Founders seeking corporate credibility and a structured legal framework.
4. Taxation Comparison: US LLC vs. UK LTD
Understanding taxation is critical, especially for non-resident founders who want to minimize double taxation and optimize profit retention.
| Tax Aspect | U.S. LLC | UK LTD |
| Corporate Tax | None (pass-through) | 25% Corporation Tax |
| Owner-Level Tax | Personal tax on distributed profits (if any) | Dividend tax applies to distributed profits |
| Double Tax Treaties | Limited (LLCs are not always recognized as treaty entities) | Over 130 tax treaties globally |
| VAT / Sales Tax | State-based sales tax (if applicable) | VAT applicable if turnover > £90,000 |
| Accounting Method | Simple cash or accrual-based | Formal accounting with audited statements for large companies |
| Tax Reporting | IRS filing optional for disregarded entities | Annual tax filing mandatory with HMRC |
Tax Example
If a non-U.S. resident forms a Wyoming LLC that earns $100,000 from clients in Europe or Asia with no U.S. presence, they may owe no U.S. federal or state tax.
In contrast, a UK LTD earning £100,000 will pay 25% corporate tax (£25,000) before distributing dividends. However, the LTD can deduct business expenses, salaries, and reinvestments before calculating tax, offering flexibility for growth-focused entrepreneurs.
5. Compliance & Maintenance
Compliance refers to the ongoing legal responsibilities after formation. While both entities are simple to manage, the UK LTD requires more structured reporting.
| Requirement | U.S. LLC | UK LTD |
| Annual Reports | State-level report (cost $50–$300) | Confirmation Statement (£13) |
| Financial Accounts | Not required for small LLCs | Annual accounts to Companies House |
| Registered Agent / Office | Required in the state of formation | UK address required as registered office |
| Public Disclosure | Optional (depends on state) | Mandatory (public record) |
| Bank Account Opening | Fintech and U.S. banks supported | UK/EU banks and fintech supported |
| BOI / PSC Filing | BOI report mandatory (for U.S. LLCs) | PSC register required (for UK LTDs) |
For non-residents, companies like Bizstartz simplify this process by offering registered agent services, compliance monitoring, EIN/UTR assistance, and bank account setup.
6. When to Go for a U.S. LLC
You will want to opt for a U.S. LLC if you:
- Run a digital or online business with international customers.
- Want uncomplicated access to U.S. payment processors like Stripe or PayPal.
- Seek lower taxes with little to no tax reporting.
- Don’t plan to relocate to the U.S. or employ people there.
- Want operational privacy and flexibility.
Perfect Use Cases:
- Amazon FBA, SaaS, affiliate marketing, dropshipping with Shopify.
- Remote services or consulting.
- Any online software, crypto, or fintech business.
Best States:
Wyoming, New Mexico, Florida and Delaware are all non-resident-friendly, have low business fees, and maintain business privacy.
7. When to Go for a UK LTD
You will want to go with a UK LTD if you:
- Plan to target the UK or EU market.
- Want to obtain a VAT registration and trade with EU partners.
- Plan to open bank accounts in the UK or EU.
- Want a formal, corporate persona for B2B engagements.
- Plan to employ local staff or subcontractors.
Perfect Use Cases:
- Consulting, IT, and professional service agencies
- UK/EU-based e-commerce and import-export businesses
- Businesses that reinvest profits for growth
Bonus:
Multi-director ownership works seamlessly with UK LTDs, making them great for co-founders and investors.
8. Cost Summary
| Expense | U.S. LLC | UK LTD |
| Formation | $100–$300 (depending on state) | £12–£100 |
| Registered Agent | $49–$100/year | £50–£150/year (virtual office) |
| Annual Report | $50–$200 | £13 |
| Accounting & Tax Filing | $0–$300 (varies) | £150–£500 (with accountant) |
| EIN / Tax ID | $0–$95 | Automatically provided (UTR) |
| Bank Account Setup | Free with fintechs | Free or low-cost with fintechs |
Overall, both are cost-effective for international entrepreneurs, but the U.S. LLC generally has lower ongoing costs and simpler management.
9. Conclusion: Which One Is Right for You?
In the end, whether to set up a U.S. LLC or a UK LTD is a matter of the area of your client base, the way you want to manage your business taxes, and the location of your prospective customer base.
✅ Choose a U.S. LLC if:
- You work with clients all over the world, particularly the U.S., or have an online business.
- You want to have a business and have less tax obligations and less compliance.
- You want to access U.S. payment methods and want world customers to trust you.
✅ Choose a UK LTD if:
- You work with customers located in the UK or in the European Union.
- You want to have a business and obtain a VAT number or need local trust.
- You prefer having orderly corporate books and legal esteem.
💼 Need Expert Help Choosing?
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