Why I Moved Away From a UK Ltd as a Non-Resident — and Chose a U.S. LLC Instead

I learned that choosing a country for a company is not about where formation is cheapest or easiest. It is about whether I can actually operate the business after the company exists.

When I was thinking about side-hustle and online-business ideas, my mind naturally went toward the fastest and easiest way to get everything in place: a legal company, access to payment processing, a business account, and the ability to work internationally.

Because I am a non-resident of both the United Kingdom and the United States, I spent a lot of time comparing a UK limited company with a U.S. LLC. I read websites, watched videos, compared service providers and tried to understand the ongoing obligations rather than only the formation price.

At first, the UK looked much easier. In the end, I moved away from that route and chose a New Mexico LLC. This is the story of why that structure fit me better. It is not a claim that a U.S. LLC is universally better than a UK Ltd.

Why the UK looked like the easiest route

For a non-resident founder looking at speed, the UK can be very attractive. Companies House currently charges £100 for an online incorporation, and the government says a company is usually registered within 24 hours. That is a remarkably fast path to having a legal company on paper.

I looked closely at the non-resident package from 1st Formations. At the time of writing, the provider lists the package at £199.99 including the £100 Companies House fee. It also advertises address services, compliance support and banking referrals to providers including Wise, Revolut and Payoneer. Those are referrals rather than guaranteed account approvals.

The basket screen I reviewed came to £225.98 after the package, a small pre-submission review add-on and VAT shown in that checkout. I liked the simplicity of the process: complete the order, verify identity, provide company details and wait for incorporation.

Illustrated from the UK non-resident formation package and basket screen I reviewed. Provider pricing, eligibility and optional add-ons can change.

The UK could get me to the starting line very quickly

From a pure startup-speed perspective, I understood the attraction. Once a company is formed, a founder can move on to applications for banking, payment processing and other services. If the business model uses a ready-made storefront such as Shopify, or a hosting-reseller platform such as WHMCS, the technical storefront itself can be built quickly.

But this is where I changed how I think. A company certificate is not the business. A fast registration does not mean banking, Stripe, Wise, Payoneer or any other provider will automatically approve the company. Every provider performs its own eligibility, compliance and risk checks.

The formation provider also warns non-residents to check its eligible-country list before buying. That matters because eligibility can change, and a service that works for one non-resident founder may not be available to another based simply on country of residence.

The real question became: what do I have to maintain every year?

Once I looked beyond the first 24 or 48 hours, the UK route started to feel heavier for the way I wanted to operate. A UK private limited company has ongoing Companies House and HMRC responsibilities.

Every company must file a confirmation statement at least once a year. The current online Companies House fee is £50. The company also normally has annual accounts to prepare and file, and an active company has a Company Tax Return obligation with HMRC.

Corporation Tax was another layer I needed to understand. A company can be set up for Corporation Tax during formation, and an active company needs to make sure HMRC knows when it starts doing business. HMRC says a company that becomes active and is within the charge to Corporation Tax must notify it within three months of the start of its accounting period if that has not already been handled.

VAT is also more nuanced than simply looking at the standard £90,000 threshold. That threshold applies generally to UK-established businesses, but HMRC has different rules for a non-established taxable person. A business with no UK establishment can have a VAT registration obligation when it makes taxable supplies in the UK even below the normal domestic threshold.

This did not mean the UK structure was bad. It meant I needed to understand that a fast formation came with an ongoing compliance system that was different from what I wanted for my own online businesses.

Then I started researching U.S. LLCs

I did not jump straight into forming a U.S. LLC. I researched entity types and states because choosing the wrong structure can create tax, reporting and administrative obligations that are much more important than the formation fee.

A lot of online discussions point non-residents toward Wyoming or Delaware. Wyoming is often discussed for low taxes and privacy, while Delaware is famous for its corporate law and is common for venture-backed companies. But I was not building a venture-backed corporation. I was choosing a simple LLC for online businesses that I would operate from outside the United States.

For Wyoming, one practical difference was the recurring state requirement. Wyoming LLCs file an annual report and pay an annual license tax. The current minimum license tax is $60, not $50.

New Mexico stood out to me because an LLC has a $50 state formation fee and does not have a New Mexico annual-report requirement. That removed one recurring state filing from my list. It did not remove federal filings, tax questions or the need to maintain a registered agent.

Why I chose New Mexico

The answer was not that New Mexico is tax-free. That would be an oversimplification. New Mexico has gross receipts tax and other tax rules that can apply depending on what the business actually does, where activity occurs and where receipts are sourced. For a business without physical presence, New Mexico currently describes an economic-nexus threshold of at least $100,000 of taxable New Mexico-sourced gross receipts in the previous calendar year. Other facts can create nexus as well.

What mattered to me was the combination of a low one-time state formation fee and no LLC annual report. For my business model and where I actually live and operate, that felt cleaner than adding another annual state filing simply because a state is popular on YouTube.

I also stopped using the word “anonymous” too casually. New Mexico does not require LLC members or managers to be listed in the Articles of Organization, so the public formation record can disclose less ownership information than some other jurisdictions. But that does not make the owner anonymous to the IRS, banks, payment companies, regulators or service providers.

Choosing a formation service

I had previously tried a low-cost freelance route where the advertisement looked cheap but the service fee, platform fee, tax and state fee together pushed my real cost to around $80. That experience made me more interested in the total cost rather than the headline price.

When I compared Bizee while preparing this article, its Basic New Mexico package showed $0 for the formation service plus the state filing cost. New Mexico itself charges $50 to file the Articles of Organization, and Bizee currently describes the online total as approximately $52 after the small convenience fee.

The package screen I reviewed also showed the registered-agent service included for the first year and a virtual-address service included for the first month. Optional services can renew at separate prices, so I would never judge a formation package only by the $0 headline.

Illustrated from the Bizee New Mexico LLC package screen I reviewed. Current processing times, package inclusions and prices can change.

The U.S. route was slower for me

The trade-off was speed. My New Mexico company formation took around 10 days. Current provider estimates can be longer; the Bizee page I reviewed shows roughly three weeks for its basic processing.

And after the company existed, I still was not finished. I needed an Employer Identification Number before I could complete the business setup I wanted.

I chose the fax route for Form SS-4. Fax feels old-fashioned, but it worked. I used an online fax service and my EIN came back in around seven days. The IRS currently says an EIN submitted by fax can generally be returned in about four business days when a fax number is provided, although processing delays can happen. International applicants can also use the IRS international phone process or mail Form SS-4.

I explain the EIN process in more detail in How to Get an EIN Without an SSN or ITIN as a Non-US Founder.

Only after that stage did I finish the payment-processing and business-banking setup I wanted. So compared with the UK path, my U.S. setup took longer. For me, that was acceptable because I was not in a hurry to open the doors before I understood how I would maintain the company.

UK Ltd versus New Mexico LLC: what was different for me?

Formation speed: the UK was clearly faster in my experience. Companies House can usually register an online company within 24 hours, while my New Mexico LLC took around 10 days and I still needed the EIN afterward.

State or registry maintenance: the UK company has an annual confirmation statement and annual accounts. New Mexico does not require an LLC annual report, although the LLC still has federal and other compliance obligations.

Banking and payment setup: the UK route looked faster on paper because the formation service offered banking referrals. But banking and payment-provider approval is never guaranteed in either country. With my U.S. LLC, the EIN became an important extra step before I completed my setup.

Tax and reporting: I do not consider either structure “tax-free” or universally simpler. They are different systems. A UK company can have Companies House accounts, Corporation Tax returns and VAT considerations. A foreign-owned U.S. LLC can have federal information-return requirements even when the owner lives abroad.

My administrative preference: for the way I operate online businesses, I preferred the New Mexico structure and the U.S. ecosystem even though the initial setup was slower.

The U.S. LLC still has an important annual filing issue

Choosing New Mexico did not mean I could form the LLC and forget about compliance. This is one of the most important points for non-U.S. owners.

A foreign-owned U.S. single-member LLC that is treated as a disregarded entity can have a Form 5472 filing requirement attached to a pro-forma Form 1120 when it has reportable transactions with its foreign owner or another related party. Owner funding and certain other transactions can be relevant. Zero revenue by itself does not automatically remove this reporting issue.

I cover that subject separately in Foreign-Owned U.S. LLC: Form 5472 and Pro-Forma Form 1120. The filing depends on the facts, and international tax is one area where professional advice can be worth paying for.

For me personally, understanding that filing pattern felt more manageable than maintaining the UK company structure I had been considering. That is a personal administrative preference, not a claim that U.S. tax compliance is objectively easier.

What I would check before choosing either country today

I would no longer start with the question “Where can I form a company for the lowest price?” I would start with where I live, where the business is actually operated, where customers are located, what payment providers I need, what banking is realistically available to me, and what recurring filings I can maintain correctly.

I would also price the second year, not only the first day. A free registered agent for one year, a free month of a virtual address, a discounted formation package or a cheap domain can all become recurring business expenses later.

That lesson connects directly to why I now track business costs from the beginning, which I wrote about in Why My LLC Accounting Started Before My Business Made a Single Dollar.

Why New Mexico won for me

If I only cared about getting a company certificate as quickly as possible, the UK route was impressive. It was straightforward, well packaged and much faster than my U.S. route.

But I was not trying to win a race to get a certificate. I wanted a company structure I was comfortable operating after the excitement of formation disappeared.

For me, New Mexico won because the LLC structure, the lack of a New Mexico LLC annual report, and the U.S. banking and online-business ecosystem were a better fit for what I wanted to build. I was willing to accept the slower setup and the EIN step.

Someone who lives in or trades heavily in the UK, hires there, needs a UK commercial presence, or has a different tax residence may reach a completely different conclusion.

The biggest lesson for me is simple: formation is the easy part. Choose the jurisdiction based on how you will actually operate, bank, report, pay taxes and maintain the business after it exists.

For the next part of my non-U.S. founder experience, see How I Opened a U.S. Business Account With Mercury as a Non-US Founder.