Entity Factors to Consider for Selling on Amazon ?

Amazon Service Provice Network (SPN) Partner • Main Street Certified Tax Advisor • Since 1997
We agree with most cross-border tax firms: most non-resident Amazon brands don’t need a U.S. entity.
If you’re already an established Amazon brand in another country and simply expanding listings into Amazon U.S., KYC is usually straightforward on your existing foreign account. In 90% of cases there’s no reason to move that account to a U.S. entity – and we’ll tell you that.
Where it does get tricky is when: – You’re a brand new Amazon seller trying to open your first U.S. account (KYC is a black hole right now), or – You’re in a high-risk or high-value niche and want more of your capital and IP sitting in a different jurisdiction than your home country.
Our job isn’t to decide “LLC or not.” Our job is to architect the safest, smartest U.S. position for your brand – tax, KYC, jurisdictions and valuation – whether that means operating through your foreign structure, adding a U.S. entity, or a mix of both.
We map U.S. tax exposure for non-resident through a foreign (most common) or U.S. entity (for high risk), and in each case look at did the brand create a USTB and ECI, or even a permanent establishment. Big difference if you are selling on Amazon for the first time (KYC black hole), or already verified and expanding to Amazon U.S., in any of the situation, we just don't give you the simple answer that global tax firms will, just the best overall strategy for to protect your brand and profits.

Start With the Full Story, Not the Comfortable Answer

Most global e-commerce tax firms take the simple route:

“Just sell into the U.S. through your foreign entity. You don’t need a U.S. company.”

For an up-and-coming brand, that’s often 90% right. In many cases, staying foreign and bolting on U.S. tax compliance is the cleanest move. When that’s true, we’ll say it – and we’ll help you handle the U.S. side properly while flagging any new marketplaces (like TikTok Shop or Walmart) that may trigger heavier KYC as a “new” seller.

But our primary goal is not what’s simplest for us. It’s what offers the most protection for your brand and profits over the next 3–10 years.

Sometimes that means you keep everything in your home-country structure, and we tighten compliance around it. Sometimes it means deliberately putting part of your profit, risk, or IP in a different jurisdiction – including a U.S. structure – because that better protects the asset you’re building.

We’re not selling “easy.” We’re designing the structure that makes the most sense for your brand, your risk tolerance, and your long-term valuation.

Your brand deserves more than “hope Amazon approves.”

Tax classification & structure: Are you operating through a foreign entity, an existing U.S. entity, or a new U.S. LLC/corp, and how should that entity be treated for U.S. tax purposes (disregarded, partnership, S-corp, C-corp) based on your facts?
Your U.S. person status: Are you a U.S. citizen, green card holder, or otherwise a U.S. tax resident? If so, how does that change what Amazon expects from you and which form you must file?
Address reality vs declarations: What business address will Amazon (and your bank/PSP) actually accept and verify? When can you safely use your foreign address as seller of record? When does saying “business located in the United States” force you to prove a real U.S. office, because a CMRA/virtual mailbox will fail when utility bills are requested?
Which tax form fits your story (W-8BEN, W-8BEN-E, or W-9)? We align the form you choose with the seller-of-record name, entity, and address you’re presenting so Amazon doesn’t see a mismatch between the tax interview and your account data.
When “extra verification” is baked in. Which combinations of entity type, address, country of residence, and form choice tend to trigger additional document requests, manual review, or the infamous “provide a utility bill” loop, and how to prepare for that instead of being surprised.
Sequence and timing: In what order should you submit identity, address, banking, and tax data so you don’t trigger re-verification or contradict earlier answers; especially if you’re changing from a foreign to a U.S. structure or opening multiple marketplace accounts?
There are no shortcuts here. If your documents can’t support the story you’re telling, Amazon will pause or reject your application until they can.

We architect your U.S. tax + KYC story.

Who You Are Determines What Amazon Will Verify

Non-resident brand

The question is not whether you need a U.S. LLC. It is what Amazon will ask you to prove, and whether you can prove it. Many non-residents sell on Amazon U.S. without a U.S. company when the tax interview, ID, address, and payout rails align with the home country. We assess USTB or ECI and treaty position, prepare the tax interview, and set payouts that match the verified seller name.

A U.S. entity is recommended only when third parties require it, such as U.S. product liability insurance or counterparties that demand a W-9, or when you plan real U.S. operations, such as a lease, warehouse, or headcount. If you declare that the business is in the United States, expect to provide evidence of a real U.S. office, including a lease and bills. Virtual mailboxes do not satisfy KYC.

U.S. resident brand

Amazon ties the legal entity display back to the tax interview owner. A disregarded SMLLC still maps to the individual for KYC. Clean files come from W-9, name, address, and banking alignment, and from timing any classification changes, such as an S-Election, after KYC is stable to avoid re-verification. Structure choice is tax-driven, and verification passes only when every data point matches.

Key takeaway
Decide after you understand exactly what Amazon will verify for your profile. Then set the structure and documents to match. There are no hacks or shortcuts.

Address & Presence: Mailbox ≠ Operations

Mailbox ≠ operations. If you declare a U.S. business, you are representing a U.S. place of business and will be expected to prove it.

Acceptable: Commercial lease plus a bank or utility bill in the same legal name and address you registered.
Limited: Certain office services are fully disclosed and supported.
High risk/rejected: CMRA/virtual mailbox presented as an operating address. This is where most “utility bill” requests fail.

If you actually operate abroad, keep the file aligned with that reality and plan payouts accordingly.

Amazon Expansion Goals

Whether you’re U.S.-based or an international seller, stepping back and evaluating your U.S. expansion strategy is crucial. Are you aiming for acquisition, global brand development, or simply looking to boost profits? Your goals will shape the best path forward.

The key decision: Should you expand by selling through your foreign entity or set up a U.S. entity (rarely)? Each option comes with its steps, costs, and compliance requirements. Navigating this process can be overwhelming, but that’s where we come in.

We understand the full picture and will guide you through every decision to ensure your smooth and successful expansion.

Which Entity is Best & Why

Assuming your situation warrants a U.S. company vs. a foreign company, which is most common, here are key factors to consider.

The goal is to choose a structure that passes Amazon KYC and meets your tax objectives. Suppose your goal is to operate through a U.S. company as a non-resident (for liability, insurance, or asset allocation reasons), and you mark the United States as your business location. In that case, you will be expected to prove a real U.S. office with a lease and bills that match your legal name and address. If you operate from abroad, keep your file aligned with that reality to avoid KYC stalling.

Platform Differences Matter

Amazon, Walmart, and Shopify each verify different signals. Some cases work cleanly with a foreign seller of record. Other cases require a U.S. company because counterparties need a W-9, U.S. liability insurance is only issued to a U.S. policyholder, or you plan real U.S. operations, such as a lease or warehouse. Do not assume the same setup will pass every platform.

Key Considerations For Non-Residents

A single-member LLC disregarded as a foreign owner does not make KYC easier. Amazon often ties the legal display back to the tax interview owner. Trying to manipulate the tax interview creates mismatches that trigger reviews. If you select the United States as the business location, you should expect to show bank or utility evidence at the same U.S. business address you registered. A CMRA virtual address will not work for your Amazon U.S. address. You will still need one to forward mail, but it will not be your operational address.

Entity choice also drives tax. Understand whether your activity creates U.S. trade or business and effectively connected income, and how treaties apply.
Be cautious with online banking that asks you to declare yourself a U.S. taxpayer. That can conflict with a disregarded setup and introduce avoidable risk.

U.S. Residents And LLC Taxation

Many U.S. residents start with a single-member LLC and a clean W-9 form, including name, address, and banking information. Keep in mind that your LLC name will not appear as the business name on your Amazon business profile; your name will. Big deal? Yes. Do you want to buy products from an individual or a company? A company, of course, and so do your customers. Because of marketplace rules, you may want to make that S election, even though your CPA may be opposed to it from the start. Existing brands are either taxed as an S corp to save taxes, as a partnership where each partner has their own US S corp, or as a C corp for public brands. The key is to understand the Amazon verification process, which is not executed perfectly, and may delay your ability to sell by weeks, if not a month or more.

Why Work With Us

We focus on verification orders and documentary alignment, so filings are made once and correctly. Our U.S. e-commerce expansion support covers structure selection, tax interview preparation, KYC mapping, and platform-specific requirements. The objective is a clean first pass and fewer resets, so you can focus on growth with confidence.

Beware of online “banks” that require you to declare yourself a “U.S. taxpayer.” This complicates things if you’re using a disregarded entity for tax purposes.

U.S. Residents and LLC Taxation:

U.S. residents may choose to form a single-member LLC disregarded and later file Form 2553 to elect to be taxed as an S corporation once profits reach a certain level. This will trigger adjustments to your Amazon tax interview and save you on self-employment taxes.

Why Us? Speed, Efficiency, and Expertise

Our U.S. E-Commerce Expansion Packages (if you qualify) cover everything from entity formation to Amazon account verification, ensuring your business is set up correctly and efficiently from day one. We handle the details so you can focus on growing your business without worrying about compliance or delays.

Choose our support to avoid common pitfalls and start selling with confidence. Don’t leave your U.S. expansion to chance; make informed decisions that set you up for long-term success.

Start Right, Start with Verified Expansion by NCP!

Clarify These Two Key Aspects for Your U.S. Expansion

1. Your end goal

Are you looking to grow your Amazon brand for a potential acquisition or long-term success? Now is the time to strategically position your business to maximize its value over the next few years. Expanding into the U.S. can help boost your brand’s growth and increase its appeal for acquisition.

Potential buyers will evaluate your business for profitability, scalability, and how well it’s positioned for future growth. Ensuring your business structure and compliance are aligned from the start is key to achieving that big exit or long-term growth.

We’re here to help you navigate this journey. Our expert team will guide you through every step of your U.S. expansion, ensuring your brand is ready for the next phase—whether that’s being acquired or scaling to new heights. With our support, you can focus on growing your brand and achieving your financial goals without unnecessary hurdles.

2. U.S. Tax Strategy for Non-Residents

Did you create a U.S. taxpayer?
Did your foreign company create a permanent establishment?
Is there a U.S. tax treaty with your home country?
Do you want to retain profits in the U.S.?
Which U.S. tax returns are required on the ownership of your U.S. entity?
What state tax requirements will come into play?
Which states require sales tax compliance when you combine non-marketplace sales?
If you have already been selling in the U.S., what is the start date on your SS4 application with the IRS?
What is the taxation of dividends in your country?
Do you need an EIN for the ownership entity?
Will Form 8832 also need to be filed?
The level of U.S. address service required.
U.S. residents, is an LLC taxed as an S corporation the best option?

Our team collaborates with experienced CPAs and tax attorneys to ensure you’re fully compliant as you expand into the U.S. When establishing a U.S. LLC as part of our expansion packages, your accountant in your home country must be on the same page regarding the flow of profits and tax responsibilities.

For U.S. residents, operating as a sole proprietorship can negatively impact your personal credit and brand reputation; it’s not the best option, even if you’re not yet profitable.

Which Entity Is Best for Amazon U.S.? (It Depends on Tax & KYC.)

If you’re a non‑resident, the default is a foreign entity. You avoid unnecessary U.S. tax exposure, keep payouts clean, and pass the tax interview when the file matches reality.

We recommend a U.S. entity for ~30% of cases (insurance, retailer/W‑9, platform/fintech friction, or true U.S. ops).

If you’re a U.S. resident, a single‑member LLC with a clean W‑9/KYC is the simplest start; later, we can time an S‑Election based on profits.

Bottom line: Formed ≠ Verified. The right path is the one that passes tax, KYC, and platform checks in sequence.

U.S. Banking

Platforms pay either an approved PSP or a direct bank. The account holder’s name must match the verified seller’s name. If you verify as a foreign person or foreign company, use payout rails in that same name. If you verify as a U.S. company, you’ll need to provide a bank statement that matches the registered U.S. address.

Amazon FBA, Nexus, and U.S. Tax Exposure

State sales and franchise tax
Inventory in an Amazon fulfillment center usually creates physical nexus. Amazon often collects marketplace sales tax, but inventory can still trigger state income or franchise filings, as well as sales tax on non-marketplace sales. Economic nexus may apply even without inventory.

Federal trade or business and ECI

FBA activity is not a per se rule, but year-round U.S. fulfillment of your own inventory is a high-risk pattern for a U.S. trade or business. The domestic threshold asks whether your U.S. activity is considerable, continuous, and regular. A U.S. office or a dependent agent can be evidence of that threshold, but neither is required. If a U.S. trade or business exists, determine whether profits are effectively connected under the business activities or asset use tests, and then layer in any treaty position separately.

Sourcing mechanics

For purchased inventory, sales are generally sourced by place of sale or title passage. For produced inventory, source is generally the place of production. Foreign source sales can still be effectively connected if they are attributable to a U.S. office that materially participates. ECI is tested only after you conclude there is a U.S. trade or business.

Treaty overlay

Even if domestic rules indicate U.S. trade or business and effectively connected income, a treaty can block federal tax on business profits if there is no permanent establishment. Independent agents such as Amazon typically do not create a permanent establishment. A no PE claim must be disclosed on a timely filed return. Treaties do not bind the states.

What to decide before using FBA

Whether your planned facts will look considerable, continuous, and regular in the United States
How and where title will pass for purchased goods, and whether any production occurs in the United States
Whether any person in the United States will have authority to conclude contracts or grant concessions
State footprint created by inventory locations, economic thresholds, and any non marketplace sales
Resulting filings by taxpayer type, for example 1120 F with 8833 for a foreign corporation, 1040 NR with 8833 for a foreign individual, 1065 with section 1446 withholding for partnerships, and 5472 with a pro forma 1120 when a foreign owned disregarded LLC has reportable related party transactions

How we help

We map the domestic trade or business and effectively connected income profile, test any treaty position, confirm sourcing and title terms, and chart the state nexus footprint. Then we align entity choice, registrations, and filings so your FBA operations match the tax posture you intend and your marketplace KYC does not work against it.

Amazon Brand Registry

When you set up your Amazon account, you’ll need a brand name and a sold-by name. While the seller’s name can be easily changed, your brand name is linked to your brand store page and must be registered and trademarked. Remember that your brand name doesn’t have to match your entity name. In many cases, filing a DBA (Doing Business As) with your registered brand name is smart.

Trademark registration goes beyond simply filing with the U.S. Patent and Trademark Office (USPTO). Many services only check the federal trademark database, which covers just a fraction of what’s out there. Most don’t include searches of state trademarks or common law marks, which could pose legal risks if someone else has prior rights.

Once your brand name is trademarked, you can use your pending mark to secure Amazon Brand Registry within about seven business days. This unlocks powerful tools that protect your brand and enhance customer experience by allowing immediate updates to your listings.

While our U.S. e-commerce expansion packages don’t include full trademark support, we recommend the best trademark service providers who can handle comprehensive searches and registrations. This ensures that your brand is legally protected at the federal level and across states and common law jurisdictions. Conducting a true IP search to avoid costly mistakes and protect your brand’s future growth on Amazon is crucial.

Exemption Certificates

If you’re a dropshipper, having an exemption certificate (or resale certificate) is crucial when working with U.S. suppliers. This certificate allows you to purchase products without paying sales tax, as long as the items are for resale. Without a resale certificate, suppliers will charge you sales tax, which can quickly add up and eat into your margins.

Each state has its own rules regarding exemption certificates, and some states won’t accept out-of-state certificates. This means you need to understand the specific requirements in every state where your suppliers are located, especially if you’re sourcing from multiple states.

Our U.S. e-commerce expansion packages include support in obtaining the necessary exemption certificates, helping you stay compliant with U.S. tax laws while minimizing costs. With the correct certificate in place, you can present it to your U.S. suppliers and avoid paying unnecessary sales tax on your inventory purchases.

Non-Resident vs. U.S. Resident Brand on Amazon - Two Different Paths