Start a United States Dropship Business From Overseas

The number one question I get asked from clients is, How can I start a dropship business within the United States when I live overseas?.

If you've just purchased an eCommerce course you might still be confused about your legal requirements to operate a drop ship business overseas.

I initially wrote this post in 2016 and I've revamped it in 2020 with some updates. I followed this process 4 years ago, so while I believe most of it is accurate, something might have changed. 

Why Setup a USA Off-shore Business?

If you're like me and you live overseas and you want to setup a USA eCommerce store. That is a store that uses US based dropshippers. 

You probably can't. Because US dropshippers only work with US companies and directors which social security numbers and reseller ID's. 

If you live in say, Moldova, you might be able to work with European dropshippers and you definitely will be able to use Chinese ones, such as Aliexpress.

But USA companies won't work with you. Period.

Many courses say USA dropshipping is much more lucrative and customers will be much happier due to shorter delivery times. But they fail to tell you that unless you're a US resident you won't be able to onboard yourself with a US supplier. 

Unable To Process Credit Cards

If you're from a third world country and want to sell on Shopify, you'll quickly find that Shopify payments don't have a solution for you to process cards.

While some countries have an alternative, there are many countries with no payment processors. To combat this, setting up a USA off-shore business will allow you to process cards using Shopify USA or Stripe USA policies. 

If you've been banned from Shopify due to excessive disputes or chargebacks, you might be up a creek without a paddle and need a new credit card processor. Starting a US off-shore company could help you. 

Who This Tutorial Is For?

  • A non US citizen to work with US dropshippers
  • A non US citizen to get USA payment processing
  • A non US citizen to have a presence in the USA
  • An overseas individual who doesn't want a local business.

Please Read

I'm not a financial planner, nor am I licensed in your country or mine to provide such advice.

You should use my guide as an educational resource and if in doubt, seek the services of an overseas tax adviser. I've been setup this way for years and I've had no issues. 

Why Offshore In The USA?

There's two states that offer off-shore company formation for foreigners, Wyoming and Delaware. I chose the latter as it was the only option at the time. 

For me, it was to work with USA dropshipping providers to expand my business. I would try and apply and I'd fail due to no social security number or reseller ID. 

Additionally registering in states such as Delaware or Wyoming means 0% income taxes on profits. It's important to point out, you're still legally required to pay income tax in your country. 

It's a common misconception that offshore company means no tax at all. While you pay no company tax if you have offshore bank accounts, such as say 35% on profits, but you'll still pay personal tax in the country you reside, such as from your shareholder salary or owner funds. 

The best thing for me, is the fact you don't need to keep any accounts, file no annual return and aren't subject to audits. Bottom line, you can do business very easily indeed. 

Delware or Wyoming?

Both have their pros and cons, however Delaware was the original state before Wyoming came along and as such it's entirely up to you. 

Both offer zero tax on corporation income if your bank account is outside the US. Both offer support for eCommerce support as you can setup an LLC (Limited Liability Company).

Both states offer absolute privacy, confidentiality and protection of assets. No public information is stored on directors or shareholders and there's no upfront capital required. 

Delaware is often the go to place for larger companies, whereas Wyoming is seen as the place for startups and small businesses. Most larger businesses court in Delaware, which you probably won't need so Wyoming can be a lucrative state. 

Delaware is usually slightly cheaper than Wyoming but there's many companies offering the same service, so do your own research to find the best one. 

You charge no sales tax on sales to those outside the state, so most people simply don't sell or ship services to Delaware or Wyoming. 

What You Can Do With Off-shore Company?

This will allow you to:

Setup a legitimate US based business like many marketers out there.
Obtain reseller permits required by dropshippers
Setup a US based bank account
Setup a merchant credit card processor with Shopify, Bigcommerce etc
Get a US issued credit card to take advantage of way better airmiles offerings for free travel.

Which is exactly what you need for your eCommerce business.

How To Incorporate In Delaware

A quick search online reveals dozens of companies that offer incorporation services. 

You can expect to pay around $1,000 for an incorporation. This may or may not include a bank account. Your bank account can be located in another jurisdiction such as Hong Kong. 

However if you're looking to process US payments you'll need a US bank account. 

You'll either need to be a director and shareholder yourself or you can hire the services of a nominated director, who basically does nothing but it keeps your name out of any records. 

You can also have a registered office. An eCommerce business probably needs a registered office in Delaware to look more official, however your office can be in another state. 

Below I'll share my process I followed. 

How I Incorporated In Delaware

I used a formation agent. They are no longer in business but there's other providers that my friends have used including: 

I registered a Delaware C Corp business which cost $148 for the application fee. This was on top of the $300 I paid for the incorporation provider. 

Currently all Delaware companies are required to have a registered agent in the state, if directors and shareholders live outside the state. 

That was me, so I chose the registered agent which cost me $125 per year. If someone sends a letter to my company, they'll open it and scan it over to me. 

Additionally they could in theory pickup the phone for me, but we have a customer support number for that, so it's not needed. 

It took 3 days to get setup. They emailed me some forms which I downloaded, signed and scanned back. I got the company documents sent over via DHL once incorporated. 

I opted for a nominated director. While Delaware claims there's no public records, I don't buy into that at all so becoming a shareholder only offers more privacy, cost $500 a year.

Grand total thus far was around $1,000. 

Getting a Bank Account

Back in 2016, this was a huge challenge. No one wanted to give me a bank account without visiting the United States to sign the paperwork. 

Citibank for example wanted me to fly to Delaware and provide a huge startup capital. Remember Delaware requires no upfront capital so I was confused here. 

Likewise any bank that was prepared to work with me, didn't offer credit card processing for off-shore businesses with foreigner owners which was a problem for Shopify.

I personally got lucky and found a startup bank called New Silicon Valley Bank that offered to setup an account and I used them for a number of years. 

I've also heard that 

Their only requirement was to send a document with how my business makes money and some examples. I took a screenshot of my store. 

To setup this service I was required to get an EIN number and provide my driving license and passport from my home country. I also had to sign a bank depositor agreement. Lastly I had to sign a W8 tax form which is for signors who aren't US citizens. 

Getting an EIN Number

Every business in the US needs an EIN number (in other countries we call this a tax ID number). 

Once your company has been incorporated you simply need to fill out an SS4 form and call the IRS Philadelphia center on 1-800 829 4933 (this was the only office we could find that processes foreign owned companies).

While on the phone to them you can fax through your completed SS4 form and if everything checks out they’ll provide the EIN number over the phone. Pretty straight forward but sounded scary at the time.

Get Physical US Address

All Delaware businesses need a physical US address for receiving business documents. There’s hundreds out there online with various different offerings. 

Again if you use a Delaware registered agent they might be able to provide something for you although it might be top end of your budget.

When I initially setup my Delaware company I chose VirtualPostMail which is a nice startup company that offered a business mailbox for $20 per month with 50% off for the first 3 months.

VirtualPostMail will scan documents and send them via email so you don’t need to wait weeks for a letter to show up. My plan includes 125 free scans per month with extra scans at $1 each. Given no one ever actually mails me this is a perfect solution.

Before you can open your mailing account you need to submit a notarized form 1583 from USPS to allow the company to open mails on your behalf. Good old USA thinking about our privacy for once :).

Get Merchant Account

Once you've incorporated, got the bank account, the EIN and have a registered US address, you're nearly home and dry. 

Paypal is decent but most buyers prefer simplicity and putting their credit card details into your website is much easier.

You’ll now be able to take advantage of Shopify and Bigcommerce inclusive free payment merchant facilities.

If you wish you can also use Stripe, Authorize.net, Braintree payments and a hoard of other credit card providers out there. There’s a neat website called FeeFighters that compares providers to help save you money.

I personally use Stripe as payments are settled in my account within 12hrs, buyers never seem to have issues and the support they provide is top notch. They provide the payment gateway making my sites PCI compliant.

Get a US Phone Number

If you're going to setup a US business you'll want US numbers. 

Technically not an issue and possible regardless of whether your company is incorporated here or outside the United States however I find TollFreeForwarding to be the best and then forward the calls to a local Skype number here in my country.

The total cost for doing this is around $30 a month. I’ve looked at call answering services in the past but I prefer to send my callers to a generic voicemail and then ring them back myself.

I rarely get phone calls so losing a couple sales is better than paying $50 for the service that will go unused.

Get Business Credit Card

Slightly tricky especially if you don’t put cash into your US bank account right away, I put $5000 into my account and the total cash was able to secure the total credit provided to me.

I applied for a mastercard credit card through Silicon Valley Bank and then went on to take advantage of some of the recommendations suggested numerous frequent flyer blogs. 

Delaware Tax Obligations

Just a brief point is that US taxation of non residents can be fairly complex and involves many specific fact points that determine if the non-residents are subject to US taxation or not. 

It’s impossible for someone like me to know your specific tax obligations without lots of information so ensure you consult with relevant tax advisers.

This might be costly to start with but I can guarantee it will be easier and safer than being hit with a huge tax bill (which you’ll struggle to pay) in 5 years time.

In simple terms you’ll need to file annual tax returns and your company will need to keep accurate financials such as balance sheet, profit and loss, chart of accounts etc.

You’ll also run into road blocks such as double taxation and how your country perceives your overseas income.

I’d recommend checking out this guide for further info in this area.

Start An eCommerce Business

eCom Elites is an online coaching course helping individuals setup dropship stores using e-commerce stores.


They have one complete package that costs $197 one time. 


I would definitely recommend you buy this course to learn more.

69 thoughts on “Start a United States Dropship Business From Overseas”

  1. Thanks for the info Rhys!

    Just a quick question which I’m kind of stuck on: If I’m a non-US citizen wanting to use a Chinese dropshipper to US Customers I DON’T need to create a US-based LLC and bank account, correct?
    Could I just pair Shopify with a payment Gateway like PayU LatAm and receive US payments?

    Any help would be greatly appreciated!

    Reply
    • Yes, if your business is not based in the United States and your supplier isn’t then you do not need to pay tax in the USA or collect sales tax in the USA. You could create an offshore identity or operate as a sole trader from your country. I don’t have experience with PayU LatAm but you could use this if they provide an international payment gateway similar to Paypal and then pay your supplier who will ship direct to the USA. Maybe in the future USA will require overseas companies to charge taxes on US purchases but currently they don’t – they charge import taxes etc the buyer must pay for items over a particular value. If your dealing with low end products buyers won’t pay any taxes. Hope this helps, Good luck.

      Reply
  2. Hello Rhys,

    I have some questions which I’m really not sure how to find solutions with.
    So basically, me and my brother have started a company which would sell Matcha teas in the USA.
    In the past few days we were looking for suppliers or dropshippers and tried to contact them.
    One of them replied but is asking if we have a license to sell online since we’re a foreign company.
    What do they basically mean about that?

    I hope you could help us.
    Thanks!

    Reply
    • Joseph, it means they only deal with USA based companies. You could try and tell them your an offshore entity but if they won’t work with you (likely) you’ll need to look at setting up a US based LLC as outlined above. If Delaware isn’t an option checkout Wyoming too with the services of myusacorporation.com

      Rhys

      Reply
  3. Rhys, a question :

    I live in Europe. I’ve found a US drop shipping company and I want so sell in the USA. Now what I plan to do is to open a company in a country in Europe that supports paypal. So USA person will visit my online store , buy the product, the product will be shipped and I will pay the taxes in the country where my company in registered.

    Is that legit? It seems to me .. I go from this point – If I have a programming company in Germany, I can sell my software to USA customers and pay my taxes in Germany , right?

    Thanks!

    Reply
    • Hi Viktor, selling digital products and physical products is different. You may find the USA drop shipping company requires a reseller ID before they’ll work with you, which you won’t have if your company is based in Germany. To get this ID you’ll need a US company.

      If they do work with you, your also buying goods from a US company who are delivering to a US customer. This is where things get complex as your no longer the seller and the drop ship supplier actually is. Your simply a middle man but to the IRS you actually taking the money from the customer in the USA and the goods aren’t being exported to the USA as they are already in the country.

      I recommend you seek further independent advice on your obligations for paying/collecting tax first.

      Rhys

      Reply
  4. Hi! You wrote about Delaware that
    “Delaware is the only off-shore state within the United States that allows foreign-nationals to setup and operate companies without actually being in the United States of America or holding a social security number there.”
    Now I’m a little confused,because till this day I was planning to founding an LLC in Wyoming trough wyomingagents.com for my drop ship business (from Hungary),due to tax reasons and to the fact,that in Delaware there is no sales tax,and I wad adviced that in this case they cannot give a Reseller permit.
    “You will not receive any sales tax certificate nor reseller permit from these states.”-via email from myusacorporation.com
    Will you please clear me the facts?
    Thank you very much for your help!
    Monika

    Reply
    • Your right, since I wrote the article Wyoming is another state that is possible to register from overseas. I never got around to updating the article so will do this now. I’m unsure what you mean on the ‘reseller permit’, can you clarify?

      Reply
      • Hi Rhys,
        Thank you for this article!!!! I just opened an LLC in WYOMING and got to open a business bank account at Wellsfargo but I don’t live in the US and don’t have any US ID or so. So I have many questions before starting to sell. Regarding taxes…
        -WY state has sales taxes of 4% but should I pay sales taxes if I only have an LLC in the US, no employees, no assets and the inventory is coming from China?
        -If I sell to other states than WY do I have to charge the sales taxes based on customers location?
        -If I have to charge the taxes..where and how should I submit them?
        -Do you know a service that does the taxes and has dropshipping knowledge?

        I did everything to open the LLC, setup shopify store and bank account but now I’m stuck with these tax issues and really want to prevent to get any fines after doing all this work.

        Your reply is highly appreciated

        Reply
        • You only charge sales tax to residents of Wyoming, block them from checking out on your store.

          No you don’t charge them sales tax for other states if your business is in WY. You do need to consider your obligations when selling to European Union and Australia as they expect the foreign entity to collect GST/VAT on behalf of the customer and submit this to their respective Governments every 3 months.

          I suggest speaking to an accountant or tax advisor in the US. You may find the services of your broker that formed the company that can point you in the right direction. I used Mytaxaccountant which is linked to myusacorporation.com which does formations in WY.

          Reply
  5. Rhys thank you for sharing this highly informative content. Just have a question though, is’t really required to open a US bank account for a minimum of $5000?

    Reply
  6. Hey Rhys,

    Thanks for this article. I have a very pratical question: as a foreigner, can you get a monthly salary from your US LLC? Or do you have to wait the end of the year and pay your taxes on your annual revenue? In what country do you pay your personal salary taxes. In the US or in NZ?

    Thanks!

    Reply
  7. I have a question. I am residing in Canada. I read conflicting articles. While I believe what was said here about the complications to use a USA dropshipper when you live outside USA, my questions are as follows:

    1) Without a US Reseller ID, I can’t use a USA Dropshipper for USA customers, but could I use a USA dropshipper for Canadian customers if the seller ships internationally?

    2) It should be easy for me being a Canadian to use a Canadian supplier for USA customer? It takes longer to ship but I could sell Canadian goods to USA customers and I don’t see it as an issue. Am I correct?

    3) What if I market to a UK market and use a USA dropshipper to ship strictly to UK, and NOT USA? I can do that without a US Reseller ID?

    I really love to know the answers to these questions above. Please let us know. Thanks.

    Reply
    • Hi Ron,

      I’m not sure as I’m not in your position however, I’d be thinking:
      1 – Yes if they are willing to work with you without a reseller ID this would work as the goods are being exported.
      2- Yes you can use a Canadian drop shipper, just tell your customers you are a Canadian entity instead of US.
      3 – Not sure on this one, suspect the answer is similar to point 1.

      I’d sign up with a few drop shippers and ask them if you can work with them without a reseller ID.

      Reply
  8. I live in Canada. So if I understand this correctly and I used a drop shipper from China to ship to Canada or the USA there shoud be no problem.

    Have you heard of Zero Up with Fred Lam? I’ve read conflicting reviews on him and Robert Kiyosaki (Rich Dad, Poor Dad).

    Any input is greatly appreciated, Cheers!

    Reply
  9. What about: I am a US citizen, already have US bank accounts and set up an eBay account, but now I moved to Netherlands. Do I pay normal US taxes as if I was living in the US? I hope to not get a job in the Netherlands, but an a current resident here. Physical location of me doesn’t matter if US business is doing business only in US right?

    Thanks!

    Reply
    • In theory you pay personal taxes in your country of permanent residence. If you’re just on holiday then you pay US tax, if you live their permanently then in theory you should pay in Netherlands. If your business is a seperate entity, i.e. a company then the business pays it’s taxes in the US but personal tax is in the country you reside. You’ll need to look into double taxation though between the two countries. btw I’m not qualified to give advice so take everything with a pinch of salt, thanks.

      Reply
  10. Hi,

    Very informative post. Just have 1 quick question, since you don’t have a US social security number so how did you get a Braintree account or other payment gateway?

    Reply
  11. Hi, I have currently a droppshipping store in the Netherlands. I dropship from China to EU. Now I want to start dropshipping to the USA. Do I have to pay sales tax in the USA or Netherlands for my US Customers? Do I need to register in US?

    Reply
  12. Thanks for the useful article. Before I setup my drop-shipping business I have one question : – How do I handle the Return policy when my location is Europe (Bulgaria), My suppliers will be from aliexpress and my items will be sold in USA. My point is, I will not have US address, what happens when someone decide to return an item ? Thank you in advance

    Reply
    • You’ve got two options, you can signup for a US mailforwarder such as Myus or equivalent and then have them return to there (likely you’ll just dispose of the item unless it’s expensive and you can then mass ship them back to your supplier or home address. Other option is to just have them ship back to China and cop any complaints you might receive. If you include your return details in your TOS before customers buy then it should be sufficient. Personally I do option 1 as the refunds are only a few per week.

      Reply
  13. Hey brother amazing article.. I am an Indian.. I understood whole procedure very well, please can you summarize the tax part once.. i mean what i understand i don’t have to pay tax in US for my LLC (only fixed state fee)…. but since I am storing funds in US account.. am I eligible to pay taxes in US now or I can pay it in my home country…

    Reply
  14. Very informative article, i have this book marked. i have a quick question here.

    I want to start a drop shipping business on Shopify using Chinese drop shippers, drop shipping to the US market. I’m not a US citizen but i have a US bank account and would like payments made to that account.

    Is it still possible to do this?

    Secondly, what’s your opinion regarding PayPal pro and using them as a payment gateway?

    Reply
    • Hi Dele,

      You wouldn’t need to even use your USA bank account. In order to accept credit card payments they will look at your location and it it’s supported and your business isn’t seen as high risk you’ll get a merchant account to accept payments from your own country. The products don’t need to be shipped from there nor the customers.

      Rhys

      Reply
  15. Hi. I live in South Africa. Would it be possible for me to operate a drop shipping business in the US/UK? I was looking at Aliexpress and Shopify. Would I be able to get payments into my South African bank account?

    Reply
    • Hi Kris, Definitely possible, you can drop ship from anywhere in the world. Pretty sure most Aliexpress and Shopify Dropshippers live in foreign countries to the ones they are selling too.

      Rhys

      Reply
      • Hi Rhys,

        That’s a great article you shared with us. I have a similar question as Kris’s.
        I want to establish a dropship business in Turkey; thru ali express to USA market.
        I have a local company registered here in Turkey. As far as I understand; I do not have to establish a new company in USA? Is that correct? since I have my Turkish one (as stated in the article “C. Your a non-US citizen wanting to use a Chinese dropshipper to US Customers – Setup local company.”)
        Do you think that’s for sure? If so, I will pay the tax to Turkish government?
        On the other hand, since we do not have PayPal like globally common payment systems, can I have the payments thru my current Turkish bank (which works with Shopify, as stated in their website)?
        Will there be any problem in transferring and/or by the US government regarding the tax etc.?

        Hope you can help me,
        Thanks in advance!

        Elif

        Reply
        • Correct, if the products aren’t shipped from the US to US customers then you don’t pay tax in the US only Turkey.

          As for the payments, again your business is overseas and has no entity in the US no problems. This is of course until the US decide to make international sellers collect US tax, similar to countries like NZ and Australia.

          Rhys

          Reply
          • Hi Rhys, I’m from Australia and want to dropship aliexpress to US, I take it that means dealing with all the tax issues involved…. damn it nothing is ever easy, it’s doing my head in having read so much recently, I’m ready to give up before my head explodes or I have a meltdown lol

          • Hi Alan, Well it only means you have to worry about Australian income/corporation tax like a normal AU business, currently US does not have requirements to collect on behalf of US customers.

  16. Just a quick note for you. If you live in Canada, think twice about setting up an LLC in the U.S. The Canada Revenue Agency does not recognize the LLC as a pass-through for taxes. You will most likely be taxed twice – once in the U.S. and once in Canada (without being able to claim the U.S. taxes as credit).

    Reply
  17. Straight forward question :

    I live in india and i want to dropship from aliexpress to us or abroad customers using my shopify store.
    What problem will i face and what are the solutions to my problems.
    Pls reply …. need help

    Reply
  18. What a wonderful Article, i am thankful for you. i have a quick question here bro, When you contacted the Silicon Valley bank how did you tell them about your business idea, did you say drop shipping or how did you formulate it ?
    you said you were asked a copy of your business idea and any references through. What did you mean by that ? and thank you so much
    regards

    Reply
    • Hi Bassem,

      This was a long time ago now, since posting this article it appears they have been inundated with requests to setup accounts for international sellers. Without jeopardizing my own account I’d prefer not to say what was included on the business plan. I can say that you should seek legal advice on how best to complete this process.

      References were business ones such as previous bank reference and one from my legal team.

      Hope it helps, apologies for the delay in replying to your comment.

      Reply
  19. Awesome article. I really appreciated a lot of the clarification regarding international businesses drop shipping into US/everywhere else in the world. I was a bit overwhelmed when I realized that certain international concerns (tax/legal trading issues) needed to be addressed before I was to take this step into drop shipping.

    So I have seen a lot of comments within this article. And so I can rest easy. I would not have to pay taxes or set up an EIN or a US bank account or anything if I am a Sole trader drop shipping from another country into the U.S? I just have to worry about my own personal taxes in which I reside which is New Zealand?

    Reply
    • Correct, so if you’re drop shipping from China to the USA customers, no USA taxes payable currently just your own income/company taxes in NZ.

      Reply
  20. Hello; great website and articles!

    Have you any article, or advise, on how to choose non-saturated niches?

    Im from Puerto Rico, a U.S.A. territory, but not a State, and Im living in The Netherlands for the time being? Do you have any advise on what would be the best drop shipping strategy for me? Should I registered in the U.S. or try and do it in Europe?

    Thanks for any guidance or info!

    Reply
  21. Great article, but i am a bit confused, if i set up a store but i am located in mexico, do i need to get all of the licenses above to dropship from china to the US?

    Reply
  22. Hello Rhys,

    Great article man. It helped a lot.
    As i’m currently thinking about starting a dropshipping business using Shopify i’d like to clarify just a few things.
    At the moment I’m Based in Bulgaria(Europe). I’d like to use products from Aliexpress and focus on USA based customers.

    Do I have to make a research about the suppliers and find Chinese ones in order to skip the complicated process you described above?

    If i understood correctly, in my case, i can register a company in Bulgaria, use Shopify with Chinese suppliers from Aliexpress, pay may taxes at home and also my customers should still be able to pay by credit card and paypal on my site.

    Any help on these questions will be highly appreciated.

    Reply
    • Yes correct, Bulgaria business, drop ship from China to customers all over the world and then pay corporate/personal tax on any profits in Bulgaria. You can probably accept Paypal and credit card too.

      Reply
  23. Hello Rhys,
    Thanks for providing all these valuable information. I have a quick question, hope you could clarify it for me. For drop shipping business, if I would have suppliers both from outside US and from US, considering taxation and other legal issues which option would be better; create a company in US or is it ok to run the business with a Europian company? (I was thinking registering a company in Estonia with my e-residence card.)
    Thanks in advance.

    Reply
    • Only problem you may run into is US suppliers normally ask for a reseller or tax ID which of course you wouldn’t have as a European business. I guess you could try and find a supplier and see if they accept you without such documents.

      Reply
  24. Hi Rhys,

    Your post was very informative and helpful. Your business model is exactly what I’m planning on doing for my own business, except I will be using both US and Chinese suppliers. I too want to set up a US Bank account and wanted to ask you a question about the requirements that Silicon Valley has. I noticed where you stated, “I was asked to send a copy of my business idea and any references through.” Are they okay with you stating that you’re a dropshipper? Or what exactly did you tell them to get approved? Also what forms of references do they ask for? This information would really help me a lot. I’ve been scouring the internet for solutions and your article has been the most helpful so far. Thank you!

    Reply
    • Hi Aldean,

      It’s been quite a few years now since I signed up, I didn’t specifically say I was going to be a drop shipper (I said -ecommerce) and it would probably get you stuck if you did mention that given the issues with payment providers hating on drop shippers in their early stages of business growth.

      You might not need to use a US bank account if that’s what you’re intending to do. Any bank account that offers a USD account might be better. I know Citibank offer such a service in many countries.

      It’s important to figure out why you want a US account as a drop shipper. You would likely need an offshore company if you did want to use US suppliers and that would require a formation agent that can usually sort a bank account for you too.

      Reply
  25. It it necessary for me to have a US bank account after setting up a USA LLC for drop-shipping?
    Or can I simply use services like Payoneer?
    I am thinking of forming the LLC in Wyoming. Am I going to have to take sales tax on orders sold across america?
    I don’t live and have never been to America.

    Reply
    • Yes if you want to accept payments you should register locally as it’s likely Stripe or Shopify will block you once they find out your situation re Payoneer and not being a US citizen.

      Yes you will need to collect sales tax like any other US businesses.

      It’s a touchy subject, I’d speak with a offshore tax consultant before setting up a US business as your tax implications in your home country can get quite complex too.

      Reply
  26. Very Informative article,Rhys. Thank you for clearing so many doubts.

    I have one questions though. I am looking to start dropshipping business. All steps are taken care of except payment gateways. I am going to create the site with shopify. The problem is I live in Pakistan and it does not have paypal and other payment gateways. I have a few relatives in US and Europe. I want to use a relative’s European/US paypal and bank account for my store.

    Everything will be handled from Pakistan.
    Supplier will be in China
    Customers will be from all over the world.

    Will it create any sort of tax related issues for them especially in USA? Do they have to register a company or declare the payment source before authorities?

    Please shed some light on it.

    Thanks

    Reply
  27. Hi Rhys,
    I have a questions. I am from Czech Republic and I want to start E-bay dropshipping business for US costomers and use US suppliers. I have a problem with create US bank account (no visit USA).
    Can I use service Stripe Atlas to create LLS and create bank account? Is it a good way? I know, Stripe don´t accept dropshippers, but is way to formulate differently my business?

    And next question is : I want send request to Silicon Valley Bank to create bank account, but I don´t know what I write about my bussines. I really need make the grade in this situation. I must create business plan, but can you write more information about this? Or refer informations or websites where i can learn about it?

    Thank you so much for your answer

    Vaclav

    Reply
  28. Hi Rhys,

    I want to start a drop shipping business on Shopify, at the moment I’m based in Colombia. I’d like to use products from Aliexpress and only focus on USA based customers. I’m not a US citizen but i have a US bank account and would like payments made to that account. Is this possible?

    Thanks,

    Raul.

    Reply
  29. Hi Rhys
    Great site!
    I am in the UK selling in the USA and use Shopify payments
    I use Banggood, for example and have signed up with them and a few others to use there dropshipping service. They haven’t asked where I am based.
    I have a UK bank account and address and phone number on my site
    Have I a problem?

    Reply
    • The only issue you might have is with your payment provider, whether they allow dropshipping or not. As long as your chargeback rate is low you should be fine. Customers in the US might be put off with a UK company, maybe signup for a USA mailing address and add that too, so it looks like you’re a US business too ? 🙂

      Reply

Leave a Comment