The United States is one of the most attractive jurisdictions in the world for entrepreneurs. A US LLC offers credibility, access to the global market, and trust with investors and partners. The good news is that anyone can legally form a US company; there are no citizenship or residency requirements.
But here’s the catch: not everyone can use their LLC. The reason is banking. Without a US business bank account, your LLC is little more than a piece of paper, and many entrepreneurs from certain countries struggle to open one.
Who Can Form a US LLC
US law does not restrict foreigners from forming an LLC. Whether you live in the UK, Croatia, Germany, Nigeria, or Pakistan, you can file the paperwork and legally own a US company.
The problem is not incorporation. The real challenge comes afterwards: opening a US bank account and accessing payment providers.
The Key Limitation: Banking Access
US banks and fintechs must comply with strict regulations around money laundering, sanctions, and terrorism financing. These rules require banks to verify:
- Who you are (identity checks, nationality, background).
- Where you live (residential address matters).
- Where your money comes from (source of funds).
If a bank considers you or your country high-risk, your account application will be denied.
Prohibited vs. Restricted Jurisdictions
It’s important to understand the difference between prohibited and restricted countries:
- Prohibited jurisdictions: Countries under US sanctions where residents and citizens cannot be served under any circumstances. Examples include Iran, North Korea, Syria, and Cuba. If you are a citizen or resident of one of these, no US bank can legally open an account for you.
- Restricted jurisdictions: Countries not fully prohibited but treated as high-risk. Banks may refuse to work with residents or citizens of these countries, or may require enhanced due diligence. Examples include Russia, Belarus, Nigeria, and Pakistan. In practice, approval is very rare.
To get an idea how does it looks like, see the list of prohibited and restricted countries of Mercury and Wise.
Additional Barriers Beyond Country Restrictions
Even if your country is not on a restricted list, you may still face obstacles:
- No US residential address – Some banks (but not all) require a US address to finalize the application. Using only a foreign address often leads to rejections. That’s why we at Neubase work only with banks that support foreign addresses.
- No SSN or ITIN – Not always required, but without one banks may apply more scrutiny.
- In-person verification – Traditional banks require a personal visit to the US branch.
- Politically exposed persons (PEPs) – If you hold or held a government position, you may face additional checks.
Real-World Examples
Here’s how these restrictions play out:
- Iranian citizen living in Iran → Prohibited jurisdiction. They can form an LLC, but no US bank or fintech will approve their account.
- Russian citizen living in France → Russian nationality triggers restrictions, even if living in the EU. Banking approval is extremely unlikely.
- German citizen living in Nigeria → German nationality is fine, but Nigerian residence is high-risk. Some fintechs and banks will decline.
- Pakistani citizen living in the UK → UK residence helps and may lead to approval, but Pakistani nationality can still lead to rejections or extra documentation requests.
These examples show that both nationality and residence matter in banking decisions. It is best to be a national and a resident of a supported country.
What This Means in Practice
Forming a US LLC is always possible, but:
- If you’re from a prohibited jurisdiction, you will not be able to open a US account.
- If you’re from a restricted country, approval is highly unlikely.
- Payment providers like Stripe and PayPal follow the same rules as banks.
This means your LLC might legally exist but remain unusable in practice.
Alternatives and Workarounds
While US banking restrictions are strict, there are a few alternatives:
- Electronic Money Institutions: Easy to apply for, but they rely on partner banks, so restrictions often mirror traditional banks. They may work in some cases.
- International banking: Some entrepreneurs open USD accounts abroad for their US LLC.
- Alternative structures: For entrepreneurs from restricted jurisdictions, it may be more practical to form a company in the UK, Hong Kong, or UAE instead of the US.
Do Your Due Diligence Before Incorporation
Before spending money on incorporation, do your homework:
- Check FATF and restricted country lists.
- Reach out to potential banks or fintechs to confirm whether your nationality or residence is supported before spending money on registering a company.
- Confirm with payment providers (Stripe, PayPal, Wise) if you plan to use them.
Don’t assume you’ll automatically be able to bank just because you can register a company.
Neubase’s Approach
At Neubase, we take this issue seriously. During our initial consultations, we advise clients from restricted countries on their options. If we know an LLC won’t be usable for you, we will not take your money.
Instead, we help you explore practical alternatives, whether that means structuring in another jurisdiction or finding international banking solutions that fit your situation.
Our goal is not just to form companies — it’s to set up businesses you can actually use.
Conclusion
- Forming a US LLC is always possible.
- Using it depends on your nationality, residence, and banking access.
- The real barrier is not incorporation, but compliance and banking.
- Entrepreneurs should carefully evaluate feasibility before proceeding.
At Neubase, we ensure our clients don’t waste money on an LLC they cannot operate. For those from restricted countries, we focus on realistic alternatives that keep your business moving forward.
