A domestic LLC is one that is created and registered in the same country as its owners. A foreign LLC, on the other hand, is a company that was formed in one state or country but operates in another. For example, if an e-commerce owner from Switzerland wanted to form an LLC in the United States, they would be forming a foreign LLC.
The main differences between these two types of entities are related to taxation and registration requirements. Domestic LLCs must abide by their home state’s regulations when it comes to taxes and filing fees, while foreign LLCs may have additional requirements imposed by the host country or jurisdiction. Some states require a minimum amount of capital for domestic companies while this requirement does not exist for foreign businesses. Domestic companies may only operate within their own borders while foreign ones can conduct business anywhere around the world provided that they comply with applicable laws wherever they do so.