Form a Texas LLC from Israel: Complete 2026 Guide

Texas is a common choice for Israeli founders who want a US LLC without moving to the US. Filing costs $300 by mail ($300 online where available), and the yearly state obligation is $0 franchise tax for LLCs with revenue below the no-tax-due threshold ($2.65 million for the 2026-27 report years), but a Public Information Report (PIR) must still be filed every year by May 15 regardless of revenue — a full franchise tax return is only required above the threshold. Texas has no personal or corporate state income tax, which keeps state-level compliance simple, although what Israel does with the LLC's profits is a separate question. On privacy: Texas requires a public information report but does not always require individual member names to be listed depending on management structure. In short, Texas is the state with the highest upfront fee but a generous no-tax-due threshold.

Forming in Texas costs $300 in state fees ($300 online where available). Add a registered agent, which every state requires and which typically runs $100-150 a year, a free IRS EIN application, and a US business bank account that is usually free with Mercury or Relay. Ongoing state cost: $0 franchise tax for LLCs with revenue below the no-tax-due threshold ($2.65 million for the 2026-27 report years), but a Public Information Report (PIR) must still be filed every year by May 15 regardless of revenue — a full franchise tax return is only required above the threshold. EasyBrise's Global Launch plan is $295 for year one including a registered agent, then $149 a year to renew, so most founders in Israel budget well under $500 for the first year, state fee included.

Texas tends to be the right fit if you expect meaningful revenue and want a state with no personal or corporate income tax and a straightforward no-tax-due threshold, and you don't mind a higher upfront filing fee. Compare it with the other four states on cost, privacy and reporting before filing; switching states later means dissolving and re-forming rather than a simple amendment.

After your Texas LLC and EIN are in place: sign an Operating Agreement (banks and payment processors ask for it even where the state doesn't), skip BOI reporting because FinCEN's rule in force since August 14, 2026 permanently exempts all US-formed LLCs, open the bank account, apply to Stripe or PayPal (each runs its own eligibility review), and put your Texas annual obligation ($0 franchise tax below the $2.65 million no-tax-due threshold, plus a Public Information Report every May 15 regardless of revenue) plus the federal Form 5472 and pro forma 1120 deadline in your calendar.

The IRS international EIN line (267-941-1099) is answered from 6 a.m. to 11 p.m. Eastern. Israel runs about seven hours ahead of New York for most of the year, so that window is roughly 1 p.m. until 6 a.m. Israeli time, and it shifts by an hour for a few weeks each spring and autumn when the two countries change clocks on different dates. Expect 45-60 minutes on the line.

The United States and Israel have had an income tax treaty since 1975. A treaty of that age does not tell you, on its own, how a modern single-member LLC is treated. Whether treaty relief reaches the LLC's profit depends on the type of income and on how Israel classifies the entity, which is why the classification question comes first.

Texas suits an Israeli founder who expects US sales to grow into meaningful revenue; the no-tax-due threshold is $2.65 million. The Public Information Report is due every May 15 even when no franchise tax is owed, so an Israeli owner should keep a US-based filer or registered agent reminder in place.

The steps are the same for any Israel-based founder: pick a name, file Articles of Organization with the Texas Secretary of State (yourself or through your registered agent), appoint a registered agent with a physical Texas address, then apply for an EIN. You have no US Social Security Number, so on Form SS-4 you enter "Foreign" or "N/A" in that field. The phone route (267-941-1099, international callers) usually takes 45-60 minutes on the line; fax or mail takes 4-6 weeks. With the EIN in hand you apply for a US business bank account remotely.

Over five years, the state-level cost of a Texas LLC is a $300 filing fee and nothing recurring, so $300 in total, before the registered agent. That makes Texas the second cheapest of the five states on this measure. The same arithmetic across the five states runs from $50 to $2,110. For an Israeli owner, the bigger variable is not this US state cost but how Israel classifies the LLC under Section 75B and Circular 05/2004.

Mercury's prohibited-countries list is based on country of residence, and Israel is not on it. Relay's list is based on the citizenship or residency of the owners, and Israel is not on that list either, so an Israeli owner can apply to both. The catch is on the payments side: Relay's published rule says it cannot process international wires, sending or receiving, that involve Israel, and Relay notes the list can change without notice. If your plan depends on wiring money between a US business account and an Israeli bank account, get the bank's confirmation in writing before you rely on it. Approval at either bank is never guaranteed.

As an Israeli owner, your recurring dates look like this. State: the Texas Public Information Report is due every May 15, even when no franchise tax is owed. Federal: Form 5472 with the pro forma Form 1120 is due on the return due date, April 15 for a calendar-year LLC, extendable with Form 7004. For the one-off EIN call, the IRS line (6 a.m. to 11 p.m. Eastern) is open roughly 1 p.m. to 6 a.m. Israeli time for most of the year. Put the state date and the federal date in your calendar when the EIN arrives, because a missed Form 5472 carries a $25,000 minimum penalty.

Two Israeli concepts get mixed up here, so keep them apart. Section 75B of the Israeli Income Tax Ordinance is the controlled-foreign-company regime: it can attribute certain undistributed passive income of a foreign company controlled by Israeli residents to those residents. The election is a different instrument: Israel Tax Authority Circular 05/2004 sets out a route for choosing how a foreign entity is classified for Israeli purposes. Both depend on the facts, so model them with an Israeli accountant before you form. On the US side the LLC still files Form 5472 with a pro forma Form 1120 every year; a missed or incomplete filing carries a $25,000 minimum penalty.

A simple way to hold the two ideas apart: Section 75B asks whether income of a controlled foreign company is attributed to you as an Israeli resident, regardless of what you do. Circular 05/2004 deals with how the foreign entity is classified, which is a choice with consequences you model in advance. Mixing them up leads to the wrong question being put to an accountant.