Setting Up a US LLC: Realistic Costs Over Three Years

A US LLC can be set up for under three hundred dollars. That figure is correct; it just describes the smallest part of what the structure actually costs. If you calculate over three years instead of one month, you get a different picture.

The government fees

So far, everything is cheap. The registration part of an LLC costs less than a trade licence in Germany, and that is exactly what is advertised.

In the video: How setting up a US LLC works, what it really costs beyond the registration fee and which tax traps German entrepreneurs overlook most often.

Why the registration fee is so low

US states compete for formations. Wyoming, Delaware and New Mexico do not earn from the registration itself but from volume and follow-up fees. For the state, an LLC is an entry in a database; the scrutiny does not take place there but later, at the IRS and at the tax office of your country of residence.

This explains why the figure in advertising can be so small and why it nevertheless says nothing about the actual costs. It is not a formation fee in the German sense but a registration fee.

What offers usually leave out

• US tax return with Form 5472: mandatory for every LLC with a foreign owner, annually, even without profit. The penalty for not filing is USD 25,000 per year
• Tax support in your country of residence: without it, the classification of the LLC cannot be assessed
• Bookkeeping: even a transparent company needs traceable figures
• Account management: fees, exchange rates, international transfers
• Changes: moving the registered office, changing members or changing the name each cost extra

Realistically, ongoing tax support on both sides is in the low four figures per year. If you cut this item, you do not save money; you postpone the cost, with interest in the form of late payment surcharges.

A calculation over three years

Take a single-member LLC in Wyoming, without a US permanent establishment, with a member in the DACH region.

Over three years, the registration part therefore accounts for a fraction of the total cost. The rest is compliance, and compliance is not optional.

Costs by type of use

The effort depends less on the company than on what you do with it.

• Pure payment structure without US sales: the leanest case, but the filing obligations remain in full
• Digital products for US customers: in addition, the question of sales tax in the individual states, which follows its own thresholds
• Trading goods with a warehouse in the US: this regularly creates US tax liability, and the effort increases considerably
• Holding company for shareholdings: low ongoing effort, but the classification in your country of residence must be examined particularly carefully

If you budget for the first case and later end up in the third, you have miscalculated. The type of use therefore belongs before the cost estimate, not after it.

What drives the price up

• Several members: the disregarded entity becomes a partnership with its own return
• US customers or a US warehouse: this may create US tax liability with the corresponding effort
• Delaware instead of Wyoming: franchise tax and higher ongoing fees
• Retrospective corrections: if you have gone two years without filing returns, you pay many times more to catch up

Comparison with a German GmbH

A GmbH costs considerably more to set up: share capital of EUR 25,000, half of which must be paid in, plus notary and commercial register. In return, the ongoing costs are predictable and there is only one tax system to deal with.

The LLC reverses this relationship: cheap to start, laborious to run, because two legal systems come together. If you only compare the formation costs, you are comparing the wrong figure.

Closing it belongs in the calculation

The end costs money too. Depending on the state, dissolution requires a dissolution resolution, deregistration with the Secretary of State and a final tax return with the IRS. If you simply stop renewing the LLC instead, it falls into administrative dissolution; outstanding fees and filing obligations remain unaffected.

For a clean closure, expect a low four-figure amount and a few weeks. This is not a large item, but it should not come as a surprise.

Where you can save and where you cannot

You can save on the choice of state, as long as there are no special requirements, and on the registered agent, whose service is largely standardised.

You should not save on two items. The US tax return is not a formality but the point with the highest individual risk. And the assessment in your country of residence decides whether the structure works at all. Both together cost less than catching up on filings after two years.

How we see it

From our client work: the cost question is almost always asked too early. It is the second question. The first is whether the LLC is the right tool for your residence situation at all, and in many cases the answer is no.

Remember this rule of thumb: over three years, expect a mid four-figure euro amount if the structure is properly run. If you calculate with three hundred dollars, you are calculating the registration fee, not the company.

Our advice: before formation, get a quote that includes ongoing support, not just the registration. Providers who only quote the entry price and do not mention the filing obligations are selling you half a structure.

Clarify before you engage a provider

• Does the quote include the US tax return with Form 5472?
• Who handles the tax side in your country of residence?
• What does renewal cost in the second and third year?
• Are opening and maintaining the account included?
• Does your business model justify the ongoing effort at all?

As of 1 September 2026. Figures are guide values; fees and rates change.

You will find the process, structure and tax classification on our page on the US LLC. How Germany classifies the company is explained under US LLC taxes in Germany.