Should a Shopify Seller Start a US LLC?
Foreign Shopify sellers pay a 1.5% fee on every US sale. A US LLC removes it but adds cross-border tax obligations most sellers don’t see coming. Use our free calculator to see if an LLC for your Shopify store is worth it.
US LLC Fee Saver Calculator
Find out whether opening a US LLC saves you money on Shopify's 1.5% international payout fee — after accounting for cross-border tax compliance costs.
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Shopify Plus merchants are not charged the 1.5% international payout fee. Opening a US LLC will not save you this particular cost. However, if you are considering a US LLC for other reasons, be aware of the compliance obligations below.
Less than 50% of your sales are going to the US. If you add a US LLC to your Shopify store, your non-US sales will now be treated as foreign sales for that LLC — meaning you could end up paying more in fees overall, not less.
A US LLC is worth revisiting if you upgrade to Shopify Plus (which removes the international payout fee entirely) or if your US sales grow above 50% of your total volume.
The $200/month accountant fee is a minimum estimate. Actual cross-border tax compliance costs may be higher depending on your situation. This calculator covers transaction fee savings only and does not constitute tax advice.
WHY THIS MATTERS
You are probably losing more than you think
Every US sale from a foreign Shopify store gets charged a 1.5% international payout fee. Most sellers have never added it up. We see this with almost every Canadian Shopify seller we onboard, the annual total surprises them.
US LLCs come with obligations you do not expect
A US LLC means tax filings on both sides of the border. Miss the US filing and you are looking at a $25,000 penalty. Miss the Canadian one and it is another $2,500. Most Shopify sellers find out about these after the LLC formation.
A general accountant is not enough for this
A US LLC means filing on both sides of the border. General accountants handle one side. If you get it wrong, you may face penalties up to $25,000. The calculator shows whether the numbers justify it, but if they do, you need an accountant who works cross-border.
HOW THIS WORKS
The math is one thing. The filing obligations are another.
Most Shopify sellers who open a US LLC do not find out about the cross-border tax requirements until they are already in it. Our team handles US LLC tax filings for Canadian Shopify and Amazon sellers every month, including the Form 5472 that carries a $25,000 penalty. Whether you are weighing the decision or already have an LLC, we can walk you through what is actually required.
Common questions about US LLCs for Shopify sellers
Do I need an LLC as a Shopify seller?
No, you do not need one to sell on Shopify. The main reason foreign sellers consider it is to avoid the 1.5% international payout fee on US sales. Whether it actually saves you money depends on your volume and what it costs to run the LLC properly. We work through this exact calculation with Canadian Shopify sellers regularly, the answer surprises most of them. Use the free calculator above to check your numbers.
Should a Shopify seller start a US LLC?
It depends on your numbers. If more than 50% of your sales go to US customers and your volume is high enough, a US LLC can make sense. But the cross-border tax filing costs start at around $3,500 per year. The free calculator above does that math for you.
Do you need an LLC for Shopify dropshipping?
No. You can run a Shopify dropshipping store from Canada without a US entity. If most of your orders go to US customers though, a US LLC might reduce your fees. Use the free calculator above to check if the numbers work.
What is an LLC for Shopify stores and how does it affect my fees?
It makes Shopify treat your store as US-based, which removes the 1.5% fee on US sales. But your Canadian sales then become the foreign ones and start getting charged that fee instead. Your US versus non-US sales split is what determines whether it is worth it.
What happens to my non-US sales if I open a US LLC?
They become foreign sales and pick up the 1.5% fee. If less than half your sales go to the US, a US LLC will likely cost you more than it saves. This is one of the most common things sellers overlook when they focus only on the fee savings side.
What is Form 5472 and why does it matter?
It is a required US tax filing for foreign-owned LLCs. Missing it or filing it wrong carries a $25,000 penalty. If you open a US LLC for your Shopify store, this needs to be filed correctly every year, no exceptions. A general accountant without cross-border experience is not equipped to handle this — it requires someone who works on both sides.
What is Form T1134 and does it apply to me?
If you are Canadian and own a US LLC, you need to report that to the CRA using Form T1134. Missing it or getting it wrong carries a $2,500 penalty. It is separate from your US filings and easy to overlook if you do not have the right accountant handling both sides.
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