Forming a US company from Canada: the founder’s complete route

Why Canadian founders form in the US — stated plainly

The honest first paragraph is the one that may talk you out of this. Stripe is fully supported in Canada itself — Stripe’s own global availability page lists Canada alongside the US — so “to get Stripe” alone does not justify a US company, and a Canadian corporation with a Canadian Stripe account is the simpler business for a founder whose market is Canadian. The US company earns its keep on the other side of the border: US clients and marketplaces that require a US entity with an EIN as a counterparty, USD settlement into a US account without conversion on every transaction, and a US-facing operation that American customers’ systems recognise without a cross-border exception.

For Canadian founders those cases are common precisely because the economies are joined: a consultancy whose clients are all in the US, a software product sold through US marketplaces, an ecommerce operation fulfilling from US warehouses. In those cases the question is rarely whether the business touches the US — it already does — but whether it touches the US through a Canadian corporation with cross-border filings, or through a US company built for the purpose.

One popular shortcut is not available and never was: forming the US company does not make you a US person, does not change your Canadian tax residence, and does not move the business’s Canadian obligations. It adds a second, American layer of paper on top of the Canadian one. Founders who need that layer do well by it; founders who do not are buying filings they will renew forever for no return.

Nothing in the route requires you to move or to have a US address of your own. The company’s public address is its registered agent’s; your Canadian address is your address on file — and some Canadian founders, with past US employment, hold an SSN already, which changes exactly one step below.

LLC or C corporation from Canada: the decision that matters

Our LLC vs corporation guide lays out the structures in full; the short version for a Canadian reader is this. An S corporation is closed to you outright — under IRC §1361 a nonresident alien cannot be an S-corporation shareholder. The real choice is between the LLC in its default form and the C corporation.

A single-member LLC is disregarded for US income tax: it files no tax return of its own, but as a wholly foreign-owned company it owes the annual Form 5472 with a pro forma Form 1120 (the tax section below). A C corporation is its own taxpayer — federal corporate tax at a flat 21%, its own Form 1120, and its own Form 5472 while it is 25% or more foreign-owned — and dividends paid out to you carry withholding on the way. The corporation is the structure US venture investors are built around; the LLC is the simpler operating vehicle most solo founders actually run.

Canada is where this decision has teeth, so it gets its own paragraph. The Canada Revenue Agency treats a US LLC as a corporation for Canadian tax purposes — Canada does not follow the IRS’s disregarded-entity treatment. The practical consequence, stated generally: income the US largely ignores at the entity level can be characterised very differently in Canadian hands, foreign tax credits may not line up the way founders expect, and the ‘simple’ US default can be the expensive Canadian answer. Many Canadian founders therefore end up comparing the US C corporation more seriously than founders elsewhere do. Which structure serves you is your Canadian adviser’s analysis, made before the filing — Sethhost forms either at the same published prices and recommends neither.

Choosing a state without a recommendation

Sethhost never recommends a state; we publish the facts and you choose. What actually differs between states is a short list: the filing fee, the recurring state charge, whether the public filing names the owners, publication requirements, and what ongoing filings look like. The three states founders ask about most, with fees re-verified against the states’ own schedules this week:

New York is the standing warning in this section. Under §206 of the Limited Liability Company Law, a New York LLC must publish a notice of its formation in two newspapers — one daily, one weekly, designated by the county clerk — once a week for six consecutive weeks, then file a Certificate of Publication (a $50 state filing fee) within 120 days of formation. Miss it and the LLC’s authority to carry on business is suspended. The newspaper charges are set by the papers in the county of the LLC’s office, and they, not the $200 Articles filing, are the real cost of a New York formation.

One more fact that catches founders out: forming in one state does not license the company in another. If the business later puts people, premises, or stock in a state, that state generally wants a foreign qualification filing of its own — a separate step (handled inside Hosted for members; state fees at cost) that our foreign qualification page covers. Every state’s facts, fee included, are on the states board, and the three above are compared in depth in our Pennsylvania, Wyoming, or Delaware guide.

The EIN step, with no SSN

Strictly in order: the company is formed first, then its EIN is applied for — the SS-4 names an existing entity. As a founder abroad you will ordinarily have no SSN, and the IRS online application, which demands one (or an ITIN) from the responsible party, is closed to you; the IRS directs applicants whose principal place of business is outside the US to the phone, fax or mail routes. The route built for your case is Form SS-4 by fax, with “Foreign” written where the responsible party’s US number would go. The EIN itself is free — the IRS charges nothing for it, ever.

Sethhost’s published expectation for this workflow is typically 15–25 business days, and we never promise to shorten the IRS. Our guide to ITIN vs EIN vs SSN settles which of the three numbers you actually need (for formation and the EIN: only the EIN), and Guide 01, EIN without an SSN, walks the fax workflow itself.

Banking and Stripe from Canada: what providers ask for

Banking is a decision made by the bank, not by you and not by us — what you control is the document file. For a non-resident owner, the providers in our banking and Stripe guide work from the same four-document set: the filed formation document, the EIN assignment letter (the CP 575), the operating agreement, and passports for owners of 25% or more. Applications fail most often on fixable mismatches between those documents, which is why the set is assembled before any application is started.

Stripe follows the same shape. A US Stripe account in the company’s name pays out only to a US bank account in the company’s name; the first payout runs 7–14 days and standard payouts land in 2 business days. Your existing Canadian Stripe account is untouched by any of this — the two accounts, like the two companies, live in their own countries. Sethhost assembles the document file banks and Stripe ask for; it does not open accounts, and it never promises a provider’s approval.

The tax picture, at journey level

On the US side, one filing is certain for the standard Canadian-founder structure. A single-member LLC wholly owned by a non-US person owes Form 5472 attached to a pro forma Form 1120 every year — even a year with no income and no tax due. It is due April 15 (Form 7004 extends it to October 15), and the penalty for failing to file starts at $25,000 per form, per year under IRC §6038A. Our Form 5472 guide is the page to read in your first month; the obligation goes on your compliance calendar from day one here, and the return itself is prepared by a qualified tax preparer or your own CPA.

ECI, in the one paragraph it gets at journey level: if the company’s US activity grows into a US trade or business with effectively connected income — US staff or a dependent agent working for it are the classic triggers — the personal picture changes too, and a Form 1040-NR of your own can enter it. Whether your activity crosses that line is a preparer’s determination, made before the activity starts, not at filing time.

The Canadian side we state generally and leave where it belongs. Canada taxes its residents on worldwide income, the CRA’s treatment of a US LLC as a corporation is the standing complication described above, and Canadians with US-source income or US filings have their own Canada–US treaty machinery that a Canadian adviser works with daily. Which filings this company creates in Canada, and how the two systems are reconciled in your hands, is your Canadian adviser’s question. Sethhost gives no Canadian tax advice, and nothing on this page is it.

Your first-year total cost, itemised

Two honest footnotes. A filing processing fee of 3% of the order total is charged by our fulfillment provider, CorpNet, where it applies; it is shown as its own itemised line at checkout and is not Sethhost revenue. And the tail after year one is real but small: Hosted continues at $79 a month, the state charge from the table above falls due on its own cycle, and Form 5472 preparation is a preparer’s fee — Sethhost’s preparer add-on is waitlist-only until that engagement is in place, and we say so rather than sell it early. The full ledger, including every add-on, is on the pricing page.

How Sethhost runs this as one bundle

The route above is one engagement here, run in sequence: the intake quiz records your facts; the formation filing is prepared and shown to you, complete with its itemised cost, before it is filed on your confirmation; CorpNet, Incorporated — named in your service agreement — is appointed registered agent of record; the EIN workflow runs and the assignment letter is mirrored into your portal; your registered agent receives official mail at the registered office (a Sethhost mail-handling service is not part of new memberships); your website and US number are configured; and the compliance calendar carries the annual report and the Form 5472 date from the start.

If you want to test your own readiness before any of that, the free readiness check tallies what you already have in place against the published facts — no recommendation, just the count.

Questions Canadian founders ask us

If Stripe already works in Canada, why form in the US at all?

For the counterparty, not the card processing: US clients and marketplaces that require a US entity with an EIN, USD settlement without conversion on every sale, and a US operation their systems recognise natively. If none of those is your situation, the honest answer is that a Canadian corporation is the simpler business — this guide says so rather than selling you a second company.

How does the CRA see my US LLC?

As a corporation. Canada does not adopt the IRS’s disregarded treatment of a single-member LLC, and that mismatch is the main reason Canadian founders get structure advice before forming rather than after the first distribution. The analysis is your Canadian adviser’s; this page’s job is to make sure the question gets asked in time.

I have an SSN from past work in the US — does the EIN step change?

Yes, and it is the one step that does. The IRS online EIN application is open to a responsible party who holds an SSN (or an ITIN); the fax route on this page is the route for founders who hold neither. Tell us which case you are at intake and the workflow follows it — the EIN is free either way.

Does the US company make me a US tax resident?

No. Forming a company changes the company’s filings, not your personal residence: you remain a Canadian tax resident, taxable in Canada on worldwide income, and the US company adds its own US returns on its own side of the border.

Reading the route from another country? The same American paperwork is written country by country for founders from the UK, India, Nigeria, Pakistan and the UAE.

Verified November 7, 2026 against: IRS, “Get an employer identification number” (online route requires the responsible party’s SSN or ITIN; applicants whose principal place is outside the US apply by phone, fax or mail) and Instructions for Form SS-4; Instructions for Form 5472 (Rev. December 2024); Pennsylvania Department of State fee schedule ($125 Certificate of Organization; $7 annual report); Wyoming Secretary of State, Business Division Filing Fee Schedule ($100 Articles of Organization; $60 minimum annual report license tax); Delaware Division of Corporations fee schedule ($110 Certificate of Formation; $400 annual LLC tax); Stripe, “Global availability” (stripe.com/global — Canada listed as fully supported), checked November 7, 2026. The Canadian position — CRA treatment of a US LLC as a corporation, and residence taxation of worldwide income — is stated generally from the Canada Revenue Agency’s published position.