How to Start a US LLC From China

The repatriation side — getting the LLC's US profit back into China — has its own, separate 2026 complication. As of January 1, 2026, Chinese banks apply materially stricter identity verification to any inbound transfer above RMB 5,000, roughly $1,000, from an overseas account, a dramatic drop from the previous, far looser threshold. Record retention on cross-border transactions has been extended to 10 years, and banks now run active anti-structuring detection aimed specifically at transfers split across multiple accounts or family members to avoid scrutiny. None of this makes bringing legitimately earned LLC profit back to China illegal — it's still your money — but it does mean the days of a low-friction personal wire from a US business account to a Chinese bank account are over for anything beyond pocket change, and documentation proving the underlying business activity (invoices, the LLC's own bank statements, the EIN) is worth keeping ready before, not after, a bank flags the transfer.

Putting the full picture together: decide how you'll capitalize the LLC before you form it — SPV registration under SAFE/Decree 837, or a minimal-capital-plus-bootstrap approach — form the LLC (Wyoming and Delaware remain the two most common choices), get the EIN using the international applicant line above, and open a Mercury or Relay account, since the account itself won't be the obstacle. Keep clean records of the LLC's own revenue and any transfers in either direction from day one, since both the SAFE/ODI side and the 2026 inbound-KYC side reward founders who can document the underlying business activity on request. None of the individual pieces here are unique to China — what's unique is that China is one of the only countries in this whole series where the money-movement question, not the tax question, is the one that actually needs planning before you file anything.

China's cross-border e-commerce, dropshipping, and software outsourcing sectors are enormous, and a growing share of that revenue is invoiced in USD to customers who never touch RMB. For these founders, a US LLC provides what a domestic structure can't from the other direction: direct Stripe and PayPal access as a US business, a US-facing brand and address for Amazon and Shopify stores, and separation from China's own extensive company-registration and capital requirements. It's also dramatically cheaper and faster to set up than most cross-border holding structures Chinese founders have historically used to reach US markets. What almost no guide aimed at Chinese founders addresses head-on, though, is that a US LLC creates friction in BOTH directions of money movement — getting capital into the LLC in the first place, and later getting profit back home — and each direction is governed by a completely different set of Chinese rules that most founders discover only after they've already formed the entity. This page is built around getting that sequencing right from day one.

The compliant route has also just changed. For over a decade, Chinese residents setting up an overseas special purpose vehicle registered under SAFE Circular 37 (2014), a relatively lightweight foreign-exchange registration process. That changed on July 1, 2026, when State Council Decree No. 837 took effect as a new, higher-level Outbound Direct Investment framework sitting above Circular 37 in China's regulatory hierarchy. Decree 837 doesn't eliminate SAFE registration, but it adds filing, ongoing supervision, transparency, and national-security review requirements that didn't exist before, particularly for structures involving sensitive jurisdictions, sensitive industries, or round-trip investment back into China. A single-member US LLC funding a SaaS or e-commerce business is a low-risk, unremarkable case in the scheme of what Decree 837 is targeting, but the practical registration process a Chinese founder now goes through is genuinely new as of mid-2026 — advice written before this date, including a lot of what's still indexed on Google, describes only the pre-Decree-837 process.

Getting an EIN as a Chinese founder works exactly like it does for any other non-US resident. With no US Social Security Number or ITIN, you can't use the IRS's online application — you'll file Form SS-4 and either call the IRS's international applicant line (267-941-1099, staffed 6am-11pm ET, for international applicants only) to receive the EIN over the phone, or fax the SS-4 (855-215-1627 from within the US, 304-707-9471 from outside) for a roughly 4-business-day official turnaround that often takes 1-2 weeks in practice. Mailing to Cincinnati, OH takes 4-5 weeks and should be a last resort. On Line 7b, write 'Foreign' or 'N/A' rather than leaving it blank. The responsible party must be the actual Chinese owner, not EasyBrise or any formation agent. If you lose your CP 575 confirmation notice, request Form 147C — a letter, not a duplicate — instead. Don't skip Form 5472 plus a pro forma 1120 each year; the penalty for missing it starts at $25,000.

On the tax side, China runs its own controlled foreign company regime, and it's worth knowing before assuming the worst. A foreign company counts as a CFC only if a Chinese resident holds a controlling stake — broadly, 50%+ combined ownership, or 10%+ direct plus practical control over the entity's operations, which a single-member LLC owner clears easily — AND the entity sits in a jurisdiction taxing it at less than roughly 12.5% (half of China's 25% statutory corporate rate). The United States, at a 21% federal corporate rate, does not qualify as a low-tax jurisdiction under this test, so most Chinese-owned US LLCs fall outside CFC scope on the rate test alone, regardless of what the LLC actually pays in a given year. There's also a practical de minimis carve-out: CFC rules generally don't apply if the foreign company's annual pre-tax profit is under roughly RMB 5 million, about $720,000 — comfortably above what most early-stage single-member LLCs earn.

On the banking side, mainland China is not on Mercury's or Relay's prohibited-country list, and China itself is not under US sanctions, so opening the US account is genuinely not the hard part of this journey, contrary to what founders sometimes assume going in. The friction runs the other way: US fintechs apply the same KYC and documentation standards to Chinese applicants as everyone else, and the real bottleneck for most Chinese founders is everything described above — getting money in without a valid ODI registration, and getting profit back out without tripping 2026's stricter inbound-transfer scrutiny. Once the LLC and EIN are in place, Mercury and Relay both process Chinese-founder applications through the same standard non-resident review as any other country, with no separate 'China track' or extra hurdle at the banking-application stage itself.

For most solo founders, the realistic compliant path is one of two: register the LLC as an overseas SPV under the current SAFE/Decree 837 framework before wiring meaningful capital — the correct but slower and more paperwork-heavy option — or capitalize the LLC with a token nominal amount and then fund ongoing operations from revenue the LLC earns directly from non-Chinese customers once it's running, money that never touches the Chinese banking system in the first place and therefore never triggers a capital-account question. The second path is why so many Chinese-founder LLCs in SaaS and e-commerce are bootstrapped rather than seeded with a large upfront transfer. What doesn't hold up under 2026's enforcement environment: splitting a large transfer across several family members' personal quotas to stay under $50,000 each — explicitly targeted 'smurfing' detection since January 2026 — or moving funds through informal or underground channels. Both carry real and increasing legal exposure rather than being a genuine shortcut around the registration requirement.

Here's the assumption that trips up almost every Chinese founder: China's well-known $50,000-per-person annual foreign exchange facilitation quota — the one used for tuition, travel, and overseas spending — does NOT cover funding your own overseas company. Capitalizing a US LLC, wiring startup funds from a Bank of China or ICBC account to a Mercury account in the LLC's name, is legally classified as an outbound direct or equity investment, a capital-account transaction, not the current-account personal spending the facilitation quota is built for. Using the personal quota to fund an LLC — even if the transfer sits comfortably under $50,000 — is a foreign exchange violation, not a gray area. Banks are required to verify the stated purpose of every forex purchase, and 'investment in an overseas company' is an explicitly flagged category that gets stopped at the counter rather than waved through. This is the opposite of most guides' framing, which treat the $50k quota as a green light for funding anything overseas up to that amount.

China and the US have had an income tax treaty in force since 1987 — genuinely useful context, since neighboring Taiwan has no such treaty at all. In principle, the treaty plus China's ordinary foreign tax credit mechanism protects a Chinese resident from being taxed twice on the same LLC income. In practice, the same wrinkle shows up here as in several other single-member-LLC countries: if your US LLC is owned by a non-resident alien and earns non-US-source income from customers outside the US, the LLC typically owes $0 in US federal tax in the first place, which means there's often no US tax for the treaty or the credit to actually offset. The treaty matters more once the business grows into US-source income, US-based contractors, or a later corporate election, not for a typical early SaaS or dropshipping LLC's day-to-day operation.