Do you need a US LLC to sell from Turkey to the US?
"If you're selling to America, set up an LLC first" is advice you hear a lot. But an LLC isn't a requirement; it's a choice with its own obligations. We explain what it solves, what it adds and the questions to ask before you decide.
Many people in Turkey who decide to sell to buyers in the US hear that their first step should be setting up a US company, usually an LLC. That advice is right in some cases; in others it adds unnecessary cost and obligations. The right answer depends on which channel you sell on, how you get paid and how big the business is.
Short answer: not in every case
Etsy pays sellers in Turkey through Etsy Payments to a bank account in Turkey, and it accepts individual sellers. So setting up a company in the US is not an Etsy requirement for selling on Etsy from Turkey. Other marketplaces and payment providers have different lists of accepted countries and documents; check the current seller registration page for each one separately.
The production and delivery side of the product is also independent of your company structure. When you work with POD, the product is printed in the US and shipped to the buyer from within the US; you don't need a company in the US for that.
What can an LLC solve?
An LLC (limited liability company) is a type of company formed at the state level in the US. For someone selling from Turkey, it comes up in these situations:
- When you want to open a US bank account and keep dollar income in the US.
- When you want to work with payment providers, wholesale buyers or business partners that only accept US companies.
- When you want to run your brand and contracts through a legal entity in the US.
- When a marketplace's or service provider's registration terms require a US company.
If you have none of these needs, an LLC can add new obligations without adding any new benefit.
The obligations an LLC brings
Setting up an LLC isn't a one-time transaction; it comes with ongoing obligations every year. These are the ones most often overlooked:
IRS filings: Form 5472 and pro forma 1120
According to the IRS instructions for Form 5472, a single-member US LLC owned by a foreign person and treated as a "disregarded entity" for tax purposes must file a pro forma Form 1120 with Form 5472 attached. These forms can't be filed electronically. Even if your LLC makes no sales, this obligation can arise when certain transactions occur; confirm the details with a specialist.
State obligations
The state where the LLC is formed can impose requirements such as an annual report, an annual fee and a registered agent. These requirements and amounts vary from state to state; check the official page of the state you choose before forming.
The Turkey side
As someone living in Turkey, how the income you earn from your US company is taxed in Turkey is a separate matter. Be sure to discuss it with an accountant in Turkey.
What to know when selling without an LLC
Form W-8BEN
A US institution paying you may ask you to document your foreign status. According to the IRS, Form W-8BEN is the form a nonresident individual gives to the payer to document that they are the beneficial owner of the income and their foreign status; any reduced rate under a tax treaty is also claimed with this form. The IRS notes that if the form isn't provided, the payer may have to withhold at a 30 percent rate. The equivalent for companies is Form W-8BEN-E.
The US and Turkey tax treaty
The IRS list of tax treaties includes an income tax treaty with Turkey. According to the IRS, such treaties can allow residents of foreign countries to be taxed at a reduced rate on, or be exempt from, certain US-source income. How it applies to which type of income requires a specialist's assessment.
Sales tax
Sales tax in the US is set at the state level. For orders shipped to states with marketplace facilitator laws, Etsy calculates, collects and remits sales tax regardless of where the seller is located. If you sell in your own Shopify store, the situation may be different; review it separately with a specialist.
Comparison: two paths
| Factor | From Turkey as an individual or a Turkish company | With a US LLC |
|---|---|---|
| Selling on Etsy | Etsy Payments to a bank account in Turkey | With a US bank account; the shop country becomes the US |
| Setup | No additional formation needed | State registration, registered agent, formation costs |
| Annual obligations | Taxes and filings in Turkey | IRS forms, state obligations and the Turkey side |
| Payment providers | Limited to those that support Turkey | Broader, including those that accept US companies |
| Production and shipping | Same with POD in the US | Same with POD in the US |
6 questions to ask before you decide
- Does the channel I want to sell on accept registration from Turkey as an individual or a Turkish company?
- Can I receive payouts to my account in Turkey, or is a US account required?
- Who will keep track of the LLC's annual IRS and state obligations?
- Does the annual cost of those obligations make sense for the sales volume I expect?
- How does my tax situation in Turkey change with an LLC?
- Can I start selling with my current setup and move to an LLC when the need arises?
For many sellers, the sensible order is to start selling first, see that the product and channel work, and then change the company structure when a real need arises. Setting up a company doesn't bring sales; building the right structure once sales start coming in is the sounder approach.
Custombull works regardless of your company structure
You connect your Etsy, Shopify, eBay or Amazon store to Custombull; the country or company structure the store was opened under doesn't change how the dashboard works. Orders come in automatically, are printed by partner producers in the US and ship to the buyer from within the US. The product cost is paid in US dollars from your wallet or card. The dashboard is available in Turkish (and English, German, Spanish, French), and there is a 41-lesson Academy.
Frequently asked questions
If I set up an LLC, don't I avoid paying tax in Turkey?
That assumption may be wrong. How income a person living in Turkey earns from a foreign company is taxed depends on the person and the structure. Be sure to consult an accountant.
Which state should I form my LLC in?
States differ in fees, reporting requirements and tax rules. There is no single right answer; review it with a specialist based on your needs.
Can I move my Etsy shop to an LLC later?
Etsy says the bank account country can't be changed, except for moves within the eurozone. If you want to change your shop country, check Etsy's current options on its help pages or with its support team.
