Foreign-owned single-member US LLCs must file IRS Form 5472 annually. Penalty for non-compliance: $25,000 per violation.
UK Ltd: Associated Company rules divide the £50,000 small-profits threshold between all entities under common control — splitting profits across two UK companies does not automatically reduce tax.
UK standard VAT rate: 20%. US sales tax: 0%–10.25% by state. Five US states have zero sales tax. Many US states exempt SaaS from sales tax entirely.
Corporatee pricing: US LLC from $699 · UK Ltd from $599 · Annual compliance from $299/yr
01 — OverviewThe Core Choice: US LLC or UK Ltd?
The two most common structures for international founders are a US LLC — registered in Delaware, Wyoming, Florida, or New Mexico — and a UK Private Limited Company registered with Companies House, typically within 24 hours.
Both offer limited liability protection. Both can be owned 100% by a non-resident. Both can accept international payments. The differences lie in taxation, banking access, investor expectations, and compliance obligations.
For most early-stage founders, one entity is enough. Choose a US LLC if your customers and investors are primarily in the United States. Choose a UK Ltd if your market is the UK or EU and you need VAT compliance. If you sell on Amazon in both markets or have operations in both countries, a dual structure is the professional standard.
- Recommended: US LLC (Delaware or Wyoming)
- Access to Stripe /PayPal under a US entity, US banking via Mercury or Relay, investor-ready structure for US angels or VCs
- Key obligation: File IRS Form 5472 annually — penalty for non-filing: $25,000 per violation
- Recommended: UK Private Limited Company (Ltd)
- Straightforward corporation tax (19% up to £50,000 profit), VAT compliance for UK/EU sales, access to Wise, Revolut, Payoneer, WorldFirst
- Key obligation: Annual Confirmation Statement + statutory accounts to Companies House; Corporation Tax return to HMRC
- Recommended: US LLC or C-Corporation (Delaware)
- Most US investors require a Delaware entity as the investee vehicle
- If you also have UK operations: UK Ltd subsidiary under a US parent is the standard dual structure
02 — US LLCWhen a US LLC Alone Is Enough
Choose a US LLC if: your primary market is the US, you need US banking or payment processing, you are raising from US investors, or you are a non-resident founder who wants maximum flexibility with no residency requirement.
A US LLC is the right single-entity choice if your primary customer base pays in USD and is located in the United States, you need access to US payment processors — Stripe, PayPal, Square — under a US-registered entity, you want US banking infrastructure via Mercury, Relay, or Airwallex, you plan to raise from US-based angel investors or venture capital, or you are a non-resident founder (a US LLC has no residency requirement, no minimum share capital, and no mandatory director structure).
A single-member US LLC owned by a non-US person is treated as a disregarded entity by the IRS — but it is not exempt from filing. IRS Form 5472 must be filed annually, alongside a pro-forma Form 1120. The penalty for failure to file is $25,000 per violation, and the IRS has enforced this aggressively since 2017. This filing obligation applies even if the LLC has zero US-source income.
Corporatee handles full formation-to-compliance for non-resident US LLC founders: EIN registration, Registered Agent, business address, operating agreement, corporate bylaws, and ongoing annual filing support. Formation: $699. Annual compliance (Stay Active plan): $299/yr.
03 — UK LtdWhen a UK Ltd Alone Is Enough
Choose a UK Ltd if: your primary market is the UK or EU, you sell to consumers who expect VAT-inclusive pricing, you need UK banking, or you want a simple and predictable corporate tax structure.
A UK Private Limited Company is the right single-entity choice if your primary revenue comes from UK or EU customers, you sell physical goods or digital services to UK consumers (VAT compliance is mandatory above £90,000 annual turnover), you prefer UK banking infrastructure — Monzo Business, Wise, Revolut, Payoneer, WorldFirst — or you want a predictable corporate tax structure.
| UK Corporation Tax Rate | Profit Level | Effective Rate |
|---|---|---|
| Small profits rate | Up to £50,000 | 19% |
| Marginal relief band | £50,001 – £250,000 | 19%–25% (can reach 26.5% in the tapering band) |
| Main rate | Above £250,000 | 25% |
If you own multiple companies under common control, HMRC divides the £50,000 and £250,000 thresholds between all associated entities. Splitting profits across two UK companies does not automatically reduce your effective tax rate — it divides the thresholds proportionally.
Corporatee's UK Ltd formation ($599) includes: UTR registration, business address, mail scanning, GOV.UK account access, Certificate of Incorporation, Memorandum and Articles of Association, share certificates, statutory registers (directors, shareholders, PSC), statement of capital, and bank account support with Wise, Revolut, Payoneer, and WorldFirst.
04 — Dual StructureWhen You Need Both
You need both a US LLC and a UK Ltd if: you have employees or inventory in both countries, you are raising US investment while serving UK customers, or you sell on Amazon in both markets (see Section 05 for the platform risk reason).
Requires Dual Structure
- Raising US VC funding — most US investors require a Delaware LLC or C-Corp as the investee entity
- Employing staff in both countries — payroll and tax withholding are jurisdiction-specific; running UK employees through a US LLC creates HMRC exposure
- Selling physical goods in both markets — import duties, UK VAT, and US sales tax are managed most cleanly through separate entities
- Amazon marketplace accounts in both regions — see Section 05
Optional but Recommended
- IP holding strategy — separating IP ownership (trademarks, patents, copyright) from trading operations is a standard, legitimate structure for dual-market founders
- Revenue split approaching 50/50 across both markets
- Significant banking or payment processor concentration in one jurisdiction
- Future plans for employees or physical presence in either country
Corporatee is one of a small number of providers that manages dual-market formation — US LLC and UK Ltd — under a single engagement, including cross-jurisdictional compliance calendars and IP registration with both the USPTO and UK IPO.
05 — Amazon SellersThe Amazon Seller Case: One Account Is a Single Point of Failure
Amazon allows a single seller account to access multiple international marketplaces — Amazon US, Amazon UK, Amazon EU — from one Seller Central login. It is convenient until it is not.
One intellectual property complaint, one policy violation, one payment verification failure — and every marketplace you operate goes dark on the same day. Revenue from all markets stops simultaneously. An Amazon seller operating US and UK marketplaces from a single account has a single point of failure. Separate legal entities are the only structural protection against total platform revenue loss.
Amazon accepts separate registered companies with distinct legal structures as a legitimate justification for operating multiple seller accounts. If one account is suspended, the other continues trading.
Amazon's policy permits multiple accounts where there is a legitimate business reason — and separate legal entities in separate jurisdictions qualifies. The operational requirements are strict:
| Requirement | US LLC (Amazon US) | UK Ltd (Amazon UK/EU) |
|---|---|---|
| Bank account | Separate US account — Mercury, Wise, Airwallex | Separate UK account — Wise, Revolut, WorldFirst |
| Tax ID | EIN from the IRS | UTR from HMRC |
| Registered address | Distinct US registered address | Distinct UK registered address |
| Login credentials | Unique email and login per account | Unique email and login per account |
| Contact person | Different contact per account | Different contact per account |
Corporatee structures dual-entity setups specifically for e-commerce sellers, including the compliance documentation Amazon requires to demonstrate genuine entity separation.
06 — Tax ComparisonVAT vs US Sales Tax: The Real Margin Difference
UK VAT: 20% Standard Rate
UK VAT rate (2026): 20% standard rate on most goods and services. Mandatory registration threshold: £90,000 annual turnover. A £100 sale to a UK consumer nets the seller £83.33 — £16.67 passes through to HMRC.
UK VAT applies at every stage of the supply chain and is ultimately borne by the end consumer — but collected and remitted to HMRC by the business. Key rates:
US Sales Tax: 0%–10.25%, State by State
US sales tax (2026): ranges from 0% to 10.25% depending on state and locality. Five states have zero sales tax. Many states exempt SaaS entirely. A $100 US sale nets the seller $89.75–$100 depending on jurisdiction.
US sales tax differs fundamentally from UK VAT: it is collected only at the point of final sale, and rates vary by state, county, and city — creating over 13,000 distinct tax jurisdictions.
Side-by-Side Comparison (2026)
| UK Ltd — VAT | US LLC — Sales Tax | |
|---|---|---|
| Tax type | VAT — 20% standard rate | Sales tax — 0%–10.25% (state-dependent) |
| Who bears it | End consumer (VAT-inclusive pricing) | End consumer (added at checkout) |
| Registration trigger | £90,000 annual taxable turnover | $100,000 sales or 200 transactions per state |
| Input tax reclaim | ✓ Yes — VAT on purchases reclaimed from HMRC | ✗ No equivalent mechanism |
| SaaS treatment | 20% VAT — digital services fully taxed at standard rate | Often exempt or reduced — many states do not tax SaaS |
| Zero-tax jurisdictions | None — VAT applies nationally | 5 states: Alaska, Delaware, Montana, New Hampshire, Oregon |
| Compliance complexity | Predictable — one national rate, quarterly HMRC returns | Complex — 13,000+ jurisdictions, varying nexus rules |
| Net on a £/$100 sale | £83.33 (£16.67 remitted to HMRC) | $89.75–$100.00 (depending on state) |
UK VAT at 20% applies to every digital service sold to a UK consumer, with no exemption. In the US, many states either exempt SaaS or apply reduced rates. The per-sale margin on US SaaS revenue is materially higher than the equivalent UK sale in most scenarios. A UK consumer paying £100 for software has already paid £16.67 in VAT — the seller receives £83.33. A US consumer paying $100 in a zero-sales-tax state receives the full product for $100. This is a real pricing and margin difference that belongs in every dual-market revenue model.
07 — PricingCorporatee Full Cost Comparison (2026)
All prices reflect Corporatee's current service packages available at corporatee.pro.
| Service | US LLC | UK Ltd | Both |
|---|---|---|---|
| Company formation | $699 | $599 | $1,298 |
| Jurisdictions | Delaware, Wyoming, Florida, New Mexico | Companies House (England & Wales) | Both jurisdictions |
| Formation includes | Company formation, EIN, Registered Agent (yr 1), business address, mail scanning, operating agreement, corporate bylaws, minutes & board resolutions | Company formation, UTR, business address, mail scanning, GOV.UK access, Certificate of Incorporation, Articles of Association, share certificates, statutory registers, statement of capital, bank account support | All of the above in both jurisdictions |
| Annual compliance (Stay Active) | $299/yr — Registered Agent, annual report, compliance calendar, reminders | $299/yr — Business address, Confirmation Statement filing | $598/yr |
| Tax filing (Fully Compliant) | Single-Member LLC: $649 · Partnership LLC: $450 · C-Corp: $649 · ITIN: $400 · Personal Tax Return: $550 · Bookkeeping: $500 | Annual accounts + bookkeeping: $399 (personal manager included) | All services available for both entities |
| Banking access | Mercury, Wise, Payoneer | Wise, Revolut, Payoneer, WorldFirst, Barclays | Both banking ecosystems |
| IP protection | USPTO trademark registration — $699 | UK IPO trademark registration — $699 | Dual registration recommended |
08 — Decision Framework4 Questions Before You File
Answer these four questions in order. The first question that gives a clear answer determines your structure. If questions 1 and 2 point to different jurisdictions, you likely need both entities.
09 — SummaryKey Takeaways
Trademark and IP registration should happen in every jurisdiction where your business operates — at incorporation, not after. A registered company name does not protect your brand. Only a registered trademark does. Corporatee provides USPTO trademark registration ($699) and UK IPO trademark registration ($699) as part of the formation package.
Whether you need one entity or two, formation should take less than a week when handled correctly. Corporatee provides US LLC and UK Ltd formation, EIN and UTR registration, compliance, bookkeeping, tax filing, and IP protection — from a single provider, without coordinating between separate legal, accounting, and filing services.
The most expensive mistake in international business formation is not the wrong jurisdiction. It is forming without a compliance plan, and discovering the obligation only when the penalty notice arrives.
This guide reflects regulations current as of March 2026 and is updated regularly. It is for informational purposes only and does not constitute legal or tax advice. Tax thresholds, penalty amounts, and VAT rates cited are sourced from IRS.gov, HMRC.gov.uk, and Companies House. Every founder's situation depends on their residency, ownership structure, and revenue mix. Consult a qualified accountant or legal adviser before making formation decisions.
10 — FAQFrequently Asked Questions
One Entity or Two — Done in Under a Week
US LLC formation from $699. UK Ltd formation from $599. EIN and UTR registration, compliance, bookkeeping, tax filing, and IP protection — all from a single provider. No coordination between separate legal, accounting, and filing services.
