Is the question that almost every investor latinoamericano do before you buy a property in Florida: do I need an LLC? The short answer is that it is not obligatory, but in many cases it is the smartest decision you can take. Depends on your situation, how many properties you have, or plan to have, and how you want to protect your assets.
This guide is intended for owners, colombians, mexicans, ecuadorians and peruvians who already have a vacation home in Orlando or are about to buy one. It is not legal advice and is not tax, but it gives you the complete map to get you to that conversation with your attorney or accountant knowing exactly what to ask.
What is an LLC and why the mention of all the world when you talk about investment in Florida
LLC means Limited Liability Company, or limited liability company. It is a legal structure that separates your personal assets from the assets of your business.
In simple terms: if someone falls on your property and you demand, LLC limits the liability to goods that are within that society. Your home in Colombia, your car, your personal savings are outside the scope of that claim. Without LLC, all your personal assets could be at risk.
That is the main argument. But it is not the only one.
The specific reasons for which a foreign investor consider opening an LLC
Protection of personal assets
Already mentioned, but it is worth it to be specific. The united states has a legal culture that is very active. Guests can sue for accidents, damage or any incident happened within the property. An LLC does not remove that risk, but contains it.
Tax benefits under the treaty between your country and the U.S.
Colombia, Mexico and Peru have tax treaties with the united States that can influence how to pay taxes as a foreign owner. An LLC is well-structured, combined with your ITIN (Individual Taxpayer Identification Number), you can reduce the tax burden on the income of your property.
This is not automatic. Requires the advice of an accountant owners international. But it is a real variable that are worth exploring before you buy.
Easy to scale to more properties
If your plan is to have a single property, the LLC can be more structure you need. But if you think climbing two or three vacation homes in Orlando, having an LLC from the start saves you a lot of administrative work after. Each property can be placed under the same or society under societies separated, depending on your strategy.
Professional image to banks and platforms
Some financial institutions in Florida and some platforms rent holiday treat differently owners that operate under a legal entity. It is not a huge difference, but it can facilitate the opening of business bank accounts and access to certain financial products.
What is an LLC makes no: myths you should clarify
Does not make you a resident or give you visa. Create an LLC in Florida has no effect on your immigration status. They are completely separate things.
Does not eliminate your tax obligations in the U.S. As a foreign owner with income in the united States, you have obligations with the IRS regardless of whether you have an LLC or not. The LLC can optimize the load, but does not eliminate it.
It is not free, nor free of charge maintain. Create an LLC in Florida costs between $125 and $200 on registration fees by state. In addition there is an annual report required of $138.75 USD. If you hire a lawyer to process, add between $500 and $1,500 more.
LLC vs. purchase to title personal: when should each option
| Purchase a personal capacity | Purchase with LLC | |
| Initial cost | None additional | $125 to $200 USD plus fees |
| Protection of assets | Limited | High |
| Fiscal management | More simple | Required accountant |
| Ideal for | A single property, a low-risk | Two or more properties, more protection |
| Opening a bank account | With ITIN staff | With EIN of the LLC |
| Transfer future | More complex | More simple |
Most of the investors in Latin american works with Home Vacation Group who have a single property in Orlando operate in a personal capacity in its early years. Those who already have two or more, or those who plan to climb, almost always work with LLC.
How to create an LLC in Florida being abroad: the basic steps
The process is not as complicated as it seems, but it has details that should do well from the start.
Step 1: choose the name of the LLC. Must be unique in Florida and end in ‘LLC’ or ‘L. L. C.’. You can confirm availability on the portal of the Division of Corporations of the Florida sunbiz.org).
Step 2: appoint a registered agent. It is a person or company with a physical address in Florida to receive legal documents on behalf of your LLC. You can hire this service for between $50 and $150 USD per year.
Step 3: file the articles of organization. Is made on-line through sunbiz.org. The cost is $125 USD.
Step 4: obtain the EIN. The Employer Identification Number, is equivalent to the NIT of your company in the U.S., So long as you apply to the IRS and is free of charge. With this number you can open a bank account business in Florida.
Step 5: open the bank account. This is the step that complicates the foreign. Some banks require physical presence in the U.S. to open the account. Others, such as Mercury or Relay, allow you to open it remotely.
The ITIN, and LLC: two different things that complement each other
The ITIN (Individual Taxpayer Identification Number) is your tax identification number of staff with the IRS. What you need to file a tax return in the U.S. as a foreign owner, regardless of whether you have an LLC or not.
The LLC has its own EIN. They are different documents for different purposes.
If you already have a property in Orlando, generating income and you do not have an ITIN, this is the first step that must be solved. You can do so through an agent certified by the IRS Certified Acceptance Agent) or by means of certain U.S. embassies in your country.
To better understand how the taxes to foreign owners in the U.S., we recommend you to read our full guide on the topic.
How it affects the LLC to the daily management of your vacation ownership
If you choose to operate with an LLC, the property is registered in the name of that society, not your personal name. This has practical implications:
- Contracts with platforms such as Airbnb or VRBO are signed on behalf of the LLC
- The income of the income you enter the bank account of LLC
- Operating expenses (cleaning, maintenance, administration) are paid from that account
- The contract with your company administrator, such as Home Vacation Group, is signed on behalf of the LLC
This really simplifies the accounting because it clearly separates the revenues and expenses of the property of your personal finances.
To understand how it works to invest in Orlando being abroad from the operational point of view, including the relationship with a company administrator, you can check out our guide for international investors.
What more you ask the investors latino on LLC in Florida
How can I create an LLC in Florida without being a US resident?
Yes. You do not need to be a resident or citizen to create an LLC in Florida. You just need to have a registered agent with an address in the state and continue the registration process sunbiz.org.
How long does it take to be ready the LLC?
The online registration can be approved in 1 to 3 business days. To obtain the EIN-takes between 1 and 4 weeks, if you request it by mail, or immediately, if you do it online with a social security number in the U.S. For foreign nationals, the process by fax or mail can take up to 4 weeks.
Do I need a lawyer to create an LLC?
It is not mandatory, but is recommended if you have no experience in legal structures in the US, A lawyer who specializes in foreign owners can help you to structure the LLC in the most efficient way for your fiscal situation-specific.
Can I transfer a property that I bought in a personal capacity to a LLC?
Yes, but the process has costs and tax implications. Depending on how you have structured your mortgage, transfer ownership, you can activate the clause of early maturity. It is something that you should consult with an attorney before doing so.
What happens if I have property in more than one state?
You need to register the LLC in each state where you have properties, or create LLCs separated by state. For the majority of investors in Latin american with properties in Florida, this is not an immediate problem.
LLC or not to LLC: the decision depends on your plan, not a general rule
There is No universal answer. If you have a single property, you’re just starting out and want to keep things simple, operate a personal basis with an ITIN is perfectly valid. If you are planning to grow, if you want to protect your personal net worth of more solid form, or if your accountant you recommended for tax reasons specific, the LLC makes sense.
What is clear: this decision you should take before buying, not after. Change the structure once the property is already registered have costs and complications that can be avoided with a good initial planning.
At Home Vacation Group we work with owners that operate of the two forms. Our team can guide you on how to structure the contract management according to your legal situation and connect you with the right professionals for the part of the fiscal and legal.
Schedule a free consultation and we will explain to you how to structure your investment from the very first day.
