Do You Need a US Entity to Sell DTC in America?

If you're asking do you need a US entity to sell DTC in America, the answer is no for most European brands at launch, provided you use a non-resident importer of record, a licensed customs broker and a continuous customs bond instead of forming a US company. The entity question becomes relevant later, once your US revenue triggers state sales-tax registration or you need a US bank account for payment processing. Below is what changes with and without one, and where the line actually sits.

Do You Need a US Entity to Sell DTC in America?

Legally, no customs rule or federal tax rule requires a European brand to incorporate in the US before shipping goods or selling direct to consumer. Customs and Border Protection does not require the importer of record to be a US citizen or a US company. A foreign business can act as its own non-resident importer, or appoint a US-based customs broker to file entries on its behalf, as long as a continuous customs bond is in place covering the value and frequency of shipments.

A foreign company can also get a US Employer Identification Number without a Social Security Number, by filing Form SS-4 directly with the IRS instead of applying online. This EIN is often enough to open a US bank account in some cases, register as an importer, and work with warehouses and brokers who require a US tax ID on file. None of this requires a Delaware LLC or a US-registered corporation.

What a US entity changes is liability, banking convenience and tax treatment, not your legal right to import and sell. Many brands run their first 12 to 24 months of US sales through their existing EU company before deciding an entity is worth the cost. Our US market-entry logistics playbook walks through the full sequence of decisions this sits inside, from first shipment to steady-state operations.

Informal vs Formal Entry for Your First Shipment

Every US import clears either informal or formal entry, and which one applies depends almost entirely on shipment value, not on whether you have a US entity. CBP's informal entry limit is $2,500 per shipment for most commercial goods. Below that threshold, paperwork is simplified and a customs bond usually isn't required.

Above $2,500, the shipment must clear formal entry, which means:

• A correct HTS classification for every SKU, filed through the Automated Commercial Environment
• A customs bond, either single-entry or continuous if you expect repeat shipments
• A formal entry summary and, in most cases, a licensed customs broker filing on your behalf

This is why the first pallet or first container matters more than people expect. A brand shipping a single low-value sample box can often clear informally with no entity and no bond. The same brand shipping a full pallet of inventory to a US warehouse will almost always need formal entry, regardless of whether it has a US company. Our guide to importer of record and customs bonds covers how to set this up correctly before the shipment leaves Europe.

Sales Tax Nexus and Banking: When an Entity Starts to Matter

A US entity doesn't change your customs obligations, but it does change two things that matter once you're selling at volume: sales tax and banking. Most US states apply economic nexus rules, meaning that once your revenue or order count in that state crosses a threshold, you're required to register and collect sales tax there, regardless of where your company is incorporated. A US entity doesn't remove this obligation, but it can simplify registration and filing in states that are stricter about foreign-registered sellers.

Banking is the more practical trigger. Payment processors, US payroll providers and some 3PLs prefer or require a US bank account tied to a US entity. If you're only using Shopify Payments or a multi-currency processor and routing funds back to a European account, you can usually operate for a long time without one. If you plan to hire US staff, hold US-dollar working capital locally, or negotiate better merchant rates, a US entity tends to pay for itself faster.

Comparing the Cost of Each Path

The real decision isn't legal, it's financial: does the ongoing cost of maintaining a US entity (registered agent fees, franchise tax, a second set of annual filings) beat the friction of operating as a non-resident importer indefinitely? That answer depends on your order volume, your margin per unit, and how much of your landed cost is duty, brokerage and warehousing rather than entity overhead. Before deciding either way, run your actual SKU mix and shipment volume through the fulfillment cost calculator to see how customs, freight and warehousing costs compare under each setup.

Where SPS Fits In

SPS Fulfillment is an Agentic 4PL: one contract, and SPS orchestrates the specialist operators, customs brokers, importers, freight forwarders, warehouses and last-mile carriers, who handle your US shipments. It owns no warehouses or trucks itself. The five services under that contract are customs, import, freight, warehousing and fulfillment: pick, pack, ship and returns.

Between 2023 and 2025, SPS ran as a 3PL, bootstrapped past $500K in GTV, serving around 150 brands and shipping more than 30,000 packages. Clients today work from a live platform covering orders, inventory, multi-carrier rate comparison, tracking, invoices and a Shopify app, whether or not they've formed a US entity.

Frequently asked questions

Can a European company be the importer of record for US shipments?

Yes. CBP allows a non-resident foreign entity to act as its own importer of record, as long as it holds a valid customs bond and provides the required identification to CBP. Many brands instead let their customs broker or 4PL handle this role under a power of attorney.

Do I need an EIN if I don't have a US company?

You can get a US EIN as a foreign business without a Social Security Number, by submitting Form SS-4 by mail or fax rather than applying online. This EIN is often sufficient for customs filings and some banking relationships without incorporating in the US.

What's the difference between informal and formal customs entry?

Informal entry applies to shipments valued at $2,500 or below per CBP rules, with simplified paperwork and usually no bond requirement. Formal entry applies above that threshold and requires an HTS classification, a customs bond and, in most cases, a licensed customs broker filing the entry.

When does it actually make sense to form a US LLC?

Once your US sales volume pushes you past economic nexus thresholds in multiple states, or once you need a US bank account for payroll, merchant processing or working capital, the administrative cost of a US entity usually starts paying for itself.

None of this needs to be solved on day one. Most European brands start as non-resident importers, prove out demand, and only form a US entity once the volume justifies it. If you want help mapping customs, import and fulfillment under one contract while you make that call, get started with SPS.