Form a Texas LLC from Japan: Complete 2026 Guide

Why do Japanese founders look at Texas? Mostly because the state-level side is predictable. The filing fee is $300 ($300 online), the ongoing requirement 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, and the state applies no personal or corporate state income tax. Texas requires a public information report but does not always require individual member names to be listed depending on management structure. Keep in mind that the state says nothing about how Japan taxes you; that depends on Japan law and is covered further down this page. What Texas offers is a large home market and a clear no-tax-due threshold.

The case for Texas: 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. The case against is simply that another state may suit your priorities better, and changing states after formation means closing the LLC and starting a new one.

Three things to do straight after formation. First, the paperwork: an Operating Agreement, and a note of the EIN letter's location (if it is lost, ask the IRS for Form 147C). Second, the money side: bank account, then Stripe or PayPal subject to their review. Third, the calendar: 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) and the federal Form 5472 and pro forma 1120. Federal Beneficial Ownership Information reporting is not something you need to do: FinCEN's rule in force since August 14, 2026 permanently exempts all US-formed LLCs.

For a Japan-based owner the order of operations is: registered agent first (you need their Texas address for the filing), then the Articles of Organization, then the EIN, then the bank account. The EIN application is Form SS-4; leave the SSN field as "Foreign" or "N/A". Calling the IRS international line (267-941-1099) is the fast route at about 45-60 minutes; faxing or mailing the form takes 4-6 weeks. Once you hold the EIN letter, bank and payment applications can begin.

A Japanese founder expecting large US revenue may prefer Texas: no state income tax and no franchise tax below $2.65 million. The Public Information Report is due every May 15 even when no tax is owed.

Budgeting for a Texas LLC from Japan? The one-time state fee is $300 ($300 online). Every LLC then needs a registered agent (typically $100-150 a year); the EIN itself costs nothing when you apply to the IRS directly; and Mercury or Relay accounts are usually free. The yearly state-side item 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. Bundled, EasyBrise Global Launch costs $295 for year one with a registered agent included and $149 a year to renew.

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 a Japanese owner, the classification of the LLC and Japan's controlled-foreign-company tests decide the home-country result, so budget for a Japanese tax adviser's written view alongside the US costs.

Japan is not on Mercury's prohibited-countries list, which is based on country of residence, and it is not on Relay's list, which looks at the citizenship and residency of the owners. Both banks run their own reviews, so approval is never guaranteed. Neither bank's published rules restrict international wires involving Japan. Yen are converted to dollars when you fund the account, so compare the exchange rate and any fee at your Japanese bank.

As a Japanese 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 8 p.m. to 1 p.m. Japanese time in US standard time (7 p.m. to noon in US daylight time). 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.

The United States and Japan have an income tax treaty in force. It covers dividends, interest, royalties and tie-breaker rules for residency, and you can confirm the details in the IRS treaty tables. For a typical founder whose LLC earns only non-US-source income, the treaty changes little in practice because there is usually no US federal income tax for it to reduce, although entity classification can decide whether treaty benefits are available.

Under the Japanese rules as described, a foreign company is a CFC when Japanese shareholders own 50 percent or more of it in total, and a Japanese shareholder counts only if holding at least 10 percent. A sole owner of a single-member LLC holds 100 percent, so both tests are met on ownership. There is also a de facto control test for cases where Japanese residents lack apparent ownership but can claim all or almost all of the residual assets. Ownership is therefore not the issue to argue; the tax-rate and income tests are.

The Tax Foundation's description says income from an active business conducted at a fixed place in the foreign country is generally exempt from the Japanese rules, while passive income is generally taxable, and a de minimis exemption applies where gross income is 20 million yen or less or 5 percent or less of aggregate pre-tax net income. A single-member LLC run by a founder from Japan raises the practical question of whether it has a fixed place of business in the United States. Ask an adviser before assuming the active-business exemption fits.

As described by the Tax Foundation, Japan's controlled-foreign-company rules treat a foreign company as a CFC where Japanese shareholders own 50 percent or more in aggregate, and each Japanese shareholder counted must hold at least 10 percent. Individuals count toward these tests, although the description we found speaks of the income being taxed to a Japanese parent corporation, so how an individual owner is taxed needs a Japanese adviser's confirmation. Income from an active business with a fixed place of business abroad is generally exempt, while passive income such as dividends, interest, royalties and capital gains is generally taxable. Separately, how Japan classifies a US LLC for tax is not settled by the sources we found.