Registering a D2C business in the US as a founder based outside the US, or as a US founder setting up properly, requires getting three things right: entity type, state of formation, and tax setup. Get these wrong and you create problems that are expensive to unwind. Here is the practical guide, not the legal textbook version.
Entity Type: LLC vs C-Corp
For most D2C founders: LLC (Limited Liability Company). An LLC protects personal assets from business liabilities, has simple tax treatment (pass-through to personal return), is easy to set up and maintain, and is the most common structure for ecommerce businesses. Formation cost: $50 to $500 depending on state. Annual maintenance: $0 to $800 per year depending on state.
C-Corp (Delaware C-Corp specifically): the right choice if you plan to raise venture capital or angel investment, issue employee stock options (ESOP), or plan to IPO. Investors and most US VCs strongly prefer Delaware C-Corps because of the well-established corporate law in Delaware and the ease of issuing shares to investors. The tax treatment is more complex than an LLC and requires a separate corporate tax return.
For 90 percent of D2C brands starting out and not planning VC funding: LLC. Form it properly, separate business and personal finances, and revisit the entity question if and when you are raising a seed round.
State of Formation
Delaware is the standard recommendation for LLC and C-Corp formation for businesses planning to raise capital. The Delaware Court of Chancery has the most developed corporate law in the US, which provides clarity for complex transactions. Delaware has no sales tax on goods sold by Delaware LLCs unless you have nexus there.
Wyoming LLC: popular for non-US founders because Wyoming has no state income tax, strong privacy protections (no public member information), and low annual fees ($52). A Wyoming LLC with a registered agent is accessible to non-US residents.
Your home state: if you are a US resident and not planning to raise capital, forming an LLC in your home state is the simplest path. You avoid foreign entity registration fees (which you would pay if forming in another state but operating in your home state).
Tax and Banking Setup
EIN (Employer Identification Number): apply for an EIN at IRS.gov immediately after forming your entity. The EIN is your business tax identification number, required to open a business bank account, set up payment processing, and file business taxes. Free to apply online, issued immediately for US residents. Takes 4 to 6 weeks by mail for non-US applicants.
Business bank account: Mercury Bank is the most popular choice for ecommerce startups. No monthly fees, integrates with Shopify and Stripe, supports domestic and international wire transfers, and has a solid API for accounting integrations. Brex and Relay are alternatives. Open before your first sale.
Sales tax: consult a CPA with ecommerce experience about nexus and sales tax obligations. As of 2026, most states require collecting sales tax if you exceed $100,000 in sales or 200 transactions in that state, regardless of where your business is incorporated. This is the economic nexus standard post-South Dakota v. Wayfair. TaxJar or Avalara automate sales tax calculation and filing for Shopify stores.