EIN vs ITIN
An EIN (Employer Identification Number) and ITIN (Individual Taxpayer Identification Number) are both nine-digit US tax identifiers, but they serve different purposes and apply to different people. Understanding which one you need is the first step toward building US business credit as a European founder.
What is an ITIN?
An ITIN is a tax identification number issued by the IRS to individuals who do not have a Social Security Number (SSN) and cannot obtain one. Non-US citizens, including European founders, typically qualify for an ITIN. You do not need a visa or work authorization to apply for one. The ITIN is used for filing tax returns, claiming tax benefits, and building a personal tax record in the US. You apply via Form W-7, and processing takes weeks to months.
What is an EIN?
An EIN is a federal tax identification number for business entities and some individuals. It functions as the "Social Security Number" for your US LLC, C-Corp, or partnership. If you own a US business, the IRS requires an EIN for payroll, tax filings, and opening a business bank account. Non-US founders can obtain an EIN without an SSN or ITIN first. You apply via Form SS-4, and you can fax it directly to the IRS as a non-resident to receive your number within one business day.
EIN vs ITIN at a Glance
| Aspect | EIN | ITIN |
|---|---|---|
| Purpose | Business tax ID | Personal tax ID |
| For whom | Businesses, employers, sole proprietors (optional) | Non-US individuals without SSN |
| Application | Form SS-4 (fax for non-residents) | Form W-7 by mail |
| Processing time | 1 business day (fax) | Weeks to months |
| Required for bank account | Yes, for business accounts | No |
| Required for business credit cards | Yes, for company cards | No |
Which Do You Need?
If you are a European founder setting up a US LLC, you need an EIN. The EIN is tied to your business entity, not to you personally. You may also want an ITIN if you plan to file US personal tax returns or claim business deductions individually, but it is not required to operate the LLC itself.
Most founders start with an EIN via Form SS-4. This lets you open a US business bank account, apply for business credit cards, and build corporate credit history immediately. An ITIN comes later if your accountant advises it for tax filing purposes.
Real Example
Marco is a German SaaS founder. He forms a single-member LLC in Wyoming. He needs an EIN to open a Mercury or Wise business account and apply for a Relay business credit card. He faxes Form SS-4 to the IRS, receives his EIN within a day, and opens his bank account the next week. His ITIN is unnecessary unless he files a US personal return or claims losses against other US income.
Form 5472 and Zero-Income Reporting
Important: if you are a foreign owner of a US LLC classified as a C-Corp (or electing to be taxed as one), the IRS requires you to file Form 5472 annually, even at zero income. Failure to file carries a $25,000 penalty. Form 5472 is an informational return that reports related-party transactions. It does not itself calculate income tax; it supports compliance with foreign-ownership reporting rules. Your US accountant will handle this. The form goes to the IRS alongside your pro-forma Form 1120 (corporate return) if applicable.
How Founders Credit Can Help
Founders Credit handles US LLC formation, EIN application via fax, and guidance on tax ID strategy entirely remotely. We ensure you have the right tax ID in place before you attempt to open a bank account or apply for credit, eliminating delays and rejections.
Frequently asked questions
Do I need a visa to get an ITIN?
No. ITINs are available to any non-US individual who needs a US tax ID, regardless of immigration status or visa type.
Can I use an ITIN to open a business bank account?
No. US business bank accounts require an EIN. Your ITIN is personal; your EIN is for the business.
How fast can I get an EIN as a non-resident?
Same-day or next business day if you fax Form SS-4 directly to the IRS. Mail applications take 2-4 weeks.
Do I need an ITIN if I have an EIN?
Not automatically. An ITIN is optional and useful only if you file personal US tax returns. Consult your accountant.
What happens if I don't file Form 5472?
The IRS can assess a $25,000 penalty per missed filing if you are a foreign owner of a US LLC. File it even at zero income.
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