A US LLC can be a good choice, also when a Czech trade license is difficult because of your visa. You do not need to be a US citizen or live in the US. What matters is that you understand how it is taxed and what you must file every year.
What an LLC is
- Despite the name, a single-member LLC is usually not treated as a company for tax: the IRS calls it a "disregarded entity". The owner is taxed personally, as if the LLC did not exist. An LLC pays out profit, not dividends.
- It can be owned by one or more people or companies, from any country, and new members can be added easily. Think before you do.
- It can have clients anywhere, work in any currency and use foreign bank accounts. Depending on your situation, it can also keep you out of VAT filings.
- It works well for digital nomads and remote workers: the LLC is the stable base for your clients, and you deal with the tax in the country where you live.
How an LLC is taxed
- By default, an LLC with one member is taxed like a sole proprietor, and one with several members like a partnership. It can also choose to be taxed as a corporation (C-corp or S-corp), which is rarely useful for freelancers.
- Not a US person? Then you are usually not taxed in the US: you pay income tax where you are tax resident, for example here, where the profit is taxed like self-employment. But the LLC must still file a yearly information return with the IRS (Form 5472 with a pro forma 1120), and the penalties for missing it are high.
- US citizens and green card holders are taxed on their worldwide income, also when living abroad. The foreign earned income exclusion (USD 130,000 for 2025, USD 132,900 for 2026) helps, if you can prove the income was earned abroad. FBAR reporting of foreign bank accounts also applies.
Compared with a trade license and an s.r.o.
- A single-member LLC works much like a Czech trade license, and is easier, cheaper and faster to set up than an s.r.o.
- You do not take a salary from an LLC: you are taxed on the profit.
- The accounting is usually simple single-entry bookkeeping.
- You can use a business name of your choice, as long as it does not clash with an existing one.
- Closing an LLC is much simpler and cheaper than closing an s.r.o.
- You cannot get a Czech business visa based on a US LLC; you can with a trade license.
- Czech tax offices often do not know what an LLC is. Having both a trade license and an LLC is often the most practical setup.
Be careful with registration agents who charge a lot just to register an LLC and then leave you alone with the tax filings. More than 95% of our clients do not need a company at all; if a trade license does not fit, an LLC often does.
