EIN Reference 101

An EIN (Employer Identification Number) is your US business's federal tax ID. For European founders building a US LLC remotely, obtaining an EIN is a core step that unlocks bank accounts, credit cards, and tax compliance. This guide cuts through the jargon.

What Is an EIN?

An EIN is a nine-digit federal tax identification number issued by the US Internal Revenue Service (IRS). It functions like a business Social Security number. Every US LLC, corporation, partnership, and most sole proprietorships need one to hire employees, open a business bank account, or file tax returns.

For non-US founders, the EIN is often your first official US business credential.

Why Non-US Founders Need an EIN

Without an EIN, you cannot:

• Open a US business bank account
• Apply for a US business credit card
• File US business tax returns
• Hire contractors or employees
• Establish US business credit history

Even if your US LLC generates zero revenue in its first year, the IRS requires you to file annual returns. An EIN makes this process legal and straightforward.

How Non-US Founders Obtain an EIN

You do not need a US visa, Social Security number, or US address to get an EIN. Instead, non-residents apply using Form SS-4 (Application for Employer Identification Number) and submit it by fax to the IRS. You provide your passport number in the "Individual Taxpayer Identification Number (ITIN)" field if you have one, or leave it blank and the IRS will assign you an ITIN during the process.

The process typically takes 4 to 7 business days. Founders Credit handles this filing for you as part of the LLC formation package, so you do not need to navigate IRS forms independently.

Real Example: A Berlin Founder's Path

Sarah, a product designer from Berlin, forms a US LLC in Wyoming to serve North American clients and protect personal assets. Her formation package includes:

• LLC registration with the Wyoming Secretary of State
• EIN application filed by fax on Form SS-4
• Federal Employer Identification Number issued within a week
• US business bank account opened at Mercury (remote-friendly, no US address required)
• US business credit card applied for through the same bank

Once Sarah has her EIN, Mercury approves her account because it can verify her US tax ID. She is now compliant and ready to invoice US clients directly.

EIN vs. ITIN: Key Difference

An ITIN (Individual Taxpayer Identification Number) is a tax ID for individuals who do not have a US Social Security number. An EIN is for businesses.

As a non-US founder, you may receive an ITIN as a byproduct of the EIN application process, but the EIN is what your LLC needs. You can also obtain an ITIN independently if you plan to file US personal tax returns (for example, if your LLC is taxed as a sole proprietorship and you need to report self-employment income).

Tax Filing After You Get Your EIN

Non-US-owned LLCs have special reporting rules. If your SMLLC (single-member LLC) is treated as a corporation for tax purposes, you must file Form 5472 (Information Return of a 25% Foreign-Owned US Corporation or Partnership) and a pro-forma Form 1120 (corporate return) every year, even if income is zero. Failure to file Form 5472 triggers a penalty of $25,000.

Form 5472 is informational only and does not itself calculate or determine tax liability. It tells the IRS that a foreign person owns your US business. The Form 1120 shows your actual tax position.

Many non-US founders choose to keep their LLC taxed as a partnership (the default) to simplify reporting, but structure depends on your goals, visa status, and jurisdiction.

EIN and Credit Building

Once you have an EIN, US banks and credit card issuers can run a business credit check. Companies like Mercury and Wise offer remote account setup for non-US founders with a valid EIN. After 6 to 12 months of active use, your LLC can build Dun and Bradstreet business credit, opening doors to higher credit limits and better terms.

Your EIN is the foundation. Without it, US credit reporting agencies have no way to track your business's payment history.

Common Questions

Do I need to renew my EIN? No, EINs do not expire. A single EIN lasts for the lifetime of your business, even if your LLC structure or ownership changes.

Can I apply for an EIN without an LLC already formed? Technically yes, but in practice the IRS expects you to provide a legal business name and formation date. It is simpler to register your LLC first, then file Form SS-4 with your EIN application.

How much does an EIN cost? The IRS issues EINs for free. Any service charging you a fee is marking up the process; the actual filing is $0.

Next Steps After Getting Your EIN

Once your EIN arrives (usually via phone call from the IRS, and sometimes by mail), use it immediately to open a US business bank account. Remote-friendly banks like Mercury, Wise, and Relay support non-US founders and can onboard you in hours with just your EIN, passport, and proof of address.

From there, apply for a business credit card to separate personal and business spending, and establish your US credit footprint.