Why forming it is the cheap part
An LLC is registered in a single state. The registration itself is a form, the fee is typically in the low hundreds of dollars depending on the state, and plenty of providers will handle it for very little.
That is exactly the problem. The part that gets advertised is the cheapest and the most harmless one. What comes after it rarely appears on the same page.
Three things keep running from the day of registration:
- A registered agent in the state, with a service address. A running cost, not a one-off fee.
- The state’s annual duties, which depending on the state means a report, a fee, or both.
- The filing to the US tax authority, and that is the expensive one.
Form 5472, and why it reaches almost everyone
An LLC with a single member does not exist for US tax purposes. It is a disregarded entity: it files no return of its own, and the result lands with the member.
Many people conclude from this that there is nothing to file. That is wrong, and the mistake costs 25,000 $.
The instructions to Form 5472 require a foreign-owned US disregarded entity to file once it has had reportable transactions with related parties. A pro forma Form 1120 must be attached, with only the name, the address and two fields completed.
What missing it costs
25,000 $. A substantially incomplete filing counts as a failure to file, so submitting something is not enough.
If the filing stays outstanding more than 90 days after a notice, a further 25,000 $ falls due for each 30-day period and each related party. The legal basis is sections 6038A and 6038C of the Internal Revenue Code.
For comparison: forming the same LLC costs a fraction of that. The ratio between what is advertised and what can go wrong is rarely this lopsided in any other company form.
The state: no general answer
Online there is almost always a name. Sometimes Wyoming, sometimes Delaware, sometimes New Mexico, depending on who wrote the text and what they sell.
The states differ in the registration fee, in the annual duties, in how much is disclosed about the people behind the company, and in what a registered agent costs there. What fits depends on what the LLC actually does, where it appears and who runs it.
Anyone naming a state without those three details is guessing. That is not a dig at the industry but an observation: the same recommendation cannot be right for two people with different businesses at the same time.
The EIN, and why it does not come along for the ride
The EIN is the LLC’s tax number. Without it there is neither a filing nor a business bank account. It has to be applied for rather than issued automatically, and for applicants without a US social security number the application runs differently than it does for Americans.
That is a separate step with its own timeline, and it does not overlap with the registration. Anyone planning the formation around the registration date is planning too short.
The question everything hangs on: where do you run it from?
This is where the American topic ends and the Cyprus one begins.
Cyprus income tax law ties a company’s residence to whether management and control are exercised in Cyprus. Not to where it was registered. Anyone holding an LLC in Wyoming and making the decisions from a desk in Limassol has to reckon with Cyprus treating the company as resident here.
The rate has been 15 % since tax year 2026, up from 12.5 %. How a company’s residence is determined in Cyprus is in the guide to tax residence, and the rates are in the overview of taxes in Cyprus.
This principle is not a Cyprus peculiarity, it is close to universal. What follows from it differs from country to country, which is why there is no rule of thumb here.
Two duties that sit side by side
The most common error in thinking: if Cyprus taxes it, the American side is settled.
It is not. Form 5472 is a reporting duty, not a tax payment. It exists regardless of which state ends up levying. Anyone pulling the LLC into Cyprus for tax and dropping the US filing has not solved one problem but created two.
What we could not verify
- The exact fees per state. They change, and a list that goes stale here would be worse than none. The authoritative figure is with the relevant Secretary of State.
- Whether the filing duty catches every single case. The instructions tie it to reportable transactions with related parties. That contributions and distributions count is stated there; an official statement that no conceivable LLC gets by without such transactions is not something we found.
- How long an EIN application takes for applicants without a US social security number. The figures quoted vary widely and we found no official timeframe.
- Whether a Cyprus director moves the management. This gets sold as a solution. Judging it depends on the individual case and belongs in advice.
Who sorts this out for you
The formation itself is administration. The question of where the LLC is taxed, and what follows from that for your Cyprus company, is advice. You get both from one place through us: setting up a US LLC. We are a software company and give no advice ourselves, we put the partner on it who can.