ITIN vs EIN: which one does a non-resident business owner need?

Founders who set up a US LLC from abroad meet two IRS numbers early on: the EIN and the ITIN. They are often confused, and agents sometimes sell an ITIN to people who do not need one. The rule is simple: the EIN is for the company, the ITIN is for a person.

What is the difference between an ITIN and an EIN?

Does a non-resident LLC owner need an EIN?

Almost always. A foreign-owned single-member LLC must file Form 5472 with a pro forma Form 1120 every year, and that needs an EIN. Banks, payment providers and clients also ask for it. See what an EIN is and the Form 5472 guide.

You can get one without an SSN or ITIN. On Form SS-4, a foreign responsible party leaves the SSN/ITIN line blank or writes "foreign". The online EIN application needs an SSN or ITIN, so non-residents apply by:

1. Fax, usually returned in about four business days.
2. Mail, which can take several weeks.
3. Phone, on the IRS line for international applicants, which can issue the EIN during the call.

When does an owner need an ITIN?

An ITIN is for individuals who have a US tax filing or reporting requirement and are not eligible for a Social Security number. For a non-resident business owner, common triggers are:

1. The owner has US-source income that must be reported on a personal return, Form 1040-NR. This happens when the LLC's income is effectively connected with a US trade or business.
2. The owner is claiming a treaty benefit that requires a US tax number.
3. A spouse or dependant must be listed on a US return.

A foreign-owned LLC with no US office, staff or agents usually has no effectively connected income, and the owner often never needs an ITIN.

How do you apply for an ITIN?

1. Complete Form W-7.
2. Attach the federal tax return that requires the ITIN, unless you qualify for an exception.
3. Send original or certified identity documents, usually a passport.
4. Apply by mail to the IRS, through a Certifying Acceptance Agent who can verify documents, or at an IRS office.

Using a Certifying Acceptance Agent means you do not have to post your passport.

Do banks require an ITIN?

US law does not. Some banks have their own policy and ask for one for each owner. Others, and most fintech providers, open accounts with the company's EIN and the owners' passports. Our guide to a US business bank account without an SSN covers options.

How Rivet handles it

Rivet opens accounts for registered companies, including US LLCs owned by non-residents. We verify the company with its formation documents and EIN, and each beneficial owner with a passport. Owners do not need an SSN or ITIN to get USD account details in the LLC's name.