Amazon FBA for Foreign Sellers — Complete Guide with US LLC (2026)

Amazon FBA (Fulfillment by Amazon) lets sellers ship goods to Amazon warehouses, where Amazon handles storage, packing, shipping, and customer service. For foreign sellers this is an attractive model:

• US market access — the world's largest e-commerce market, 330M consumers
• Logistics elimination — you don't need a US warehouse, Amazon provides it
• Brand building — private label approach, your own brand on Amazon
• Stripe/banking — with US LLC you get full access to US payment systems
• USD revenue — protection from currency risks

But: FBA has specific tax and legal complications that DON'T exist for simple SaaS or consulting business. This article covers it all.

For 95% of foreign FBA sellers, optimal structure is:

Single-member LLC in Wyoming or Delaware

Why not other options:

• Sole proprietor without LLC — can't open US business account, Amazon may require US entity for certain categories, no liability protection
• Multi-member LLC — unnecessarily complex for one owner, adds Form 1065 and K-1 obligations
• C-Corporation — double taxation (21% federal + dividend withholding), makes sense only with VC investment
• Florida/California — higher annual fees, same functionality

Between Wyoming and Delaware: Wyoming wins for FBA with zero state tax, low annual fees ($60), and strong privacy. Delaware's $300 Franchise Tax is unnecessary expense. Details in our state comparison.

1. Wyoming LLC registration — 3-5 business days, $200-400 (see full guide)
2. EIN from IRS — 3-4 weeks (or 1 day with expedited service)
3. Opening business account (Mercury or Relay) — 1-3 business days. Mercury for serious FBA businesses, Relay for starters (see comparison)
4. Filing W-8BEN-E with Amazon — critical, explained next
5. Amazon Seller Central registration — use US LLC info (EIN, US business address), not personal ID
6. Sales tax setup — don't forget, explained below
7. Supplier network — usually China, India, local suppliers
8. Product research — Helium 10, Jungle Scout, ManyChat — not covered here
9. Shipping inventory to Amazon FBA — from China directly to Amazon US warehouse (manufacturer → freight forwarder → Amazon)

Total setup takes 6-8 weeks from decision to first sale.

When you register US LLC with Amazon, the platform wants to know if you're US or foreign person — if US, Amazon files 1099 and withholds tax. If foreign LLC — they don't withhold, which is your interest.

W-8BEN-E (not W-8BEN — that's for individuals) is the form telling Amazon: "I'm a foreign entity, disregarded, without US treaty benefits claim, don't withhold 30% of my revenue."

How to Fill for FBA Business

• Part I, Line 1: Exact LLC name (from Wyoming SoS articles)
• Part I, Line 2: Country of incorporation — USA (LLC is US entity even if owner is foreign)
• Part I, Line 5: Chapter 3 status — "Disregarded entity"
• Part I, Line 6: Permanent address — can use home country address or US registered agent address
• Part I, Line 8: LLC's EIN
• Part III: Claim of Tax Treaty Benefits — usually NOT filled for disregarded entity. For FBA income there's no withholding tax to reduce via treaty.

Important: incorrect W-8BEN-E leads to 30% automatic withholding from every payout. Amazon will hold $3,000 from every $10,000 sale until you correct the form.

This is the most complex aspect of Amazon FBA for non-US sellers. Most foreign sellers don't understand it and pay dearly for the mistake.

What Is Nexus

The US has no federal sales tax. 45 states + DC with different sales tax rates. "Nexus" means "sufficient connection with the state to require sales tax registration and collection."

Before 2018: only physical presence created nexus. After South Dakota v. Wayfair (2018): economic activity creates nexus — sales over a threshold ($100K or 200 transactions, varies by state).

Why FBA Is Special

When you ship inventory to Amazon FBA, goods are automatically distributed across their warehouses in various states (Amazon moves stock to optimize delivery). This means:

• Your goods are physically in warehouses in 5-15 states for a typical FBA seller
• This TECHNICALLY creates physical nexus in those states
• Accordingly — obligation to register and collect sales tax

The Good News — Marketplace Facilitator Laws

From 2019-2021 most states adopted Marketplace Facilitator Laws — Amazon, eBay, Etsy, and similar platforms collect and pay sales tax on behalf of sellers. You DON'T register in those states yourself.

Currently all 45 states + DC have Marketplace Facilitator Law for Amazon sales. Amazon automatically:

• Collects correct sales tax on each sale
• Pays these amounts directly to states
• Files reports on your behalf

For an FBA seller selling only through Amazon — sales tax obligation essentially disappears.

Where to Still Be Careful

If you sell outside Amazon too (own Shopify, eBay, other marketplaces):

• Own Shopify store — you're a "direct seller", need sales tax registration in nexus states (over $100K sales threshold)
• eBay/Etsy — also have Marketplace Facilitator laws, covered
• B2B sales outside marketplace — resale certificates, special rules

The Scenario for 95% of Foreign FBA Sellers

If selling only through Amazon FBA:

• Amazon collects sales tax automatically
• You don't register with state tax authorities
• You don't file state sales tax returns
• You don't pay state income tax (no physical presence as owner)

Big advantage of FBA model over other e-commerce.

The critical question: "Do I owe US federal income tax on FBA sales?"

Answer for most foreign sellers: No.

Why

To owe US federal income tax, you must be "engaged in US trade or business" (USTB) with Effectively Connected Income (ECI). Technically, FBA inventory in US warehouse might look like USTB, but per Rev. Rul. 80-199 and subsequent IRS practice:

• Consignment of inventory in marketplace warehouse for passive storage is NOT USTB
• Amazon acts as independent contractor/marketplace, not your agent
• Without US employees, US office, or US agent with authority — no USTB

What You Still File

Even without federal income tax liability, you file:

• Form 5472 + pro-forma 1120 — annually, mandatory (see detailed article)
• State Annual Report — Wyoming $60
• Registered Agent renewal — $50-150

You DON'T file:

• Form 1040-NR (personal US tax return)
• State income tax returns
• Sales tax returns (if Amazon only)

Total annual compliance costs: $600-1,500. Much cheaper than typical European e-commerce compliance.

Let's say you sell one product with these parameters:

• Amazon sale price: $25
• COGS (cost from Chinese supplier + shipping): $6
• Amazon fees (referral + FBA fulfillment): ~$8
• Net profit per unit: $11 (44% margin)
• Volume: 500 sales/month = $5,500 monthly net profit = $66,000 annual profit

US Structure Maintenance Costs

• Wyoming LLC Annual Report: $60
• Registered Agent: $100
• CPA for Form 5472: $700
• Bookkeeping (Mercury + spreadsheet): $0 (DIY)
• Total: $860/year = 1.3% of profit

US Taxes with This Structure

$0 (federal), $0 (state), $0 (sales tax, Amazon collects).

Home Country Taxes

US LLC income for home-country tax resident is declared on annual tax return. Depending on structure:

• Self-employed status: 15-25% effective (varies by country)
• Through domestic corporation owning US LLC: 10-20% effective

Full analysis in our tax treaty article.

1. Starting with personal Amazon account — you create seller account as foreign physical person, then try to transfer to LLC. Amazon rarely approves this transfer. Correct: register US LLC first, then Amazon account directly on LLC.
2. Incorrect W-8BEN-E — 30% withholding for months while fixing
3. Ignoring Form 5472 — $25,000 penalty as discussed
4. Florida instead of Wyoming — $138.75 Annual Report, $400 late penalty, no benefit vs WY
5. Wise account instead of Mercury/Relay — Wise isn't a US bank, Amazon accepts it but has limitations for certain categories. Real US banking is safer.
6. Not reporting sales tax from off-Amazon sales — if you start own Shopify alongside Amazon, suddenly have direct sales tax obligations
7. Mixing personal and business money in Mercury — destroys LLC liability protection (piercing the veil)

Amazon doesn't restrict non-US sellers directly, but some categories require additional documentation:

• Dietary supplements and beauty products — FDA facility registration in US, ingredients disclosure
• Toys — CPSIA test certificates, may require US testing lab
• Electronics — FCC certification, UL listing
• Food/beverage — FDA regulation, can be impractical without US presence
• Medical devices — FDA 510(k), practically impossible without US company

For general merchandise, home goods, pet supplies, outdoor/sports, office supplies — zero additional restrictions.

FBA setup is a specific niche in LLC consulting. We offer a package:

• Wyoming LLC registration optimized for FBA
• Expedited EIN filing (3-5 days instead of 4-6 weeks)
• W-8BEN-E preparation and submission to Amazon
• Mercury/Relay account opening assistance
• Annual Form 5472 filing (with US CPA specialized in FBA)
• Home-country side: consultation on declaring US income locally
• First-year support — questions, sales tax exceptions, Amazon compliance

Contact us for a custom quote on our contact page. If you already have an LLC and just need compliance help, we'll say so clearly — no need to pay for new registration.