Some providers sell founders abroad an ITIN as if it were a step in forming a company. It isn't. An ITIN is a personal tax number for people who have to file, or be reported on, a US tax return and can't get a Social Security Number. Most owners of a foreign-owned LLC never need one. Some do later, and this guide helps you tell which you are.
What you don't need one for
- Forming the company. No state asks for one.
- Getting the EIN. Form SS-4 takes "foreign" or N/A in place of the number. The EIN guide explains.
- Opening an account at Mercury or Wise Business. Both verify you with your passport.
- Claiming a treaty rate on a W-8BEN, as long as you give the tax number your own country issued you. Without one, you'd generally need an ITIN.
- Filing Form 5472. It asks for the owner's foreign tax number, if they have one, rather than a US number.
When you actually need one
- You have effectively connected income and have to file Form 1040-NR. A return needs a taxpayer number on it.
- You're a partner in a US partnership with effectively connected income, so the partnership has to withhold and report against your number.
- You own US property and choose to be taxed on the net rental income, or you sell it and apply for reduced withholding.
- A bank or platform insists. Relay asks owners for an SSN or ITIN; most others don't.
- You're claiming a treaty rate on a W-8BEN and your country doesn't issue you a tax number.
How to apply
You apply on Form W-7, with proof of identity and foreign status, which for most people means a passport. The IRS wants either the original passport, posted to its office in Austin, Texas and returned afterwards, or a copy certified by the agency that issued it. A Certifying Acceptance Agent can also check your original passport and send the application without it. The application usually has to go with the tax return that needs the number, unless one of the IRS's listed exceptions applies, which is why applying just in case often fails. The IRS says to allow seven weeks, or nine to eleven weeks in the busy season or when you apply from abroad.
What it doesn't change
An ITIN doesn't speed up an EIN, make you a US person, give you any right to work, or open a bank account on its own. It's a number for tax returns. If nobody has asked you for a US return, you probably don't need one.