A $0 or $39 LLC formation offer is not a lie. It’s a real price for a genuinely narrow service: filing one document with the state. The trouble begins the moment that document is filed, as a schedule of ongoing costs quietly activates in the background, none of which were part of the initial pitch that led you to click “start now.”
This isn’t a problem exclusive to freelancers, SaaS companies, or e-commerce businesses. It affects anyone building a mobile, non-resident business through a US LLC: a consultant invoicing from three countries, an agency running payroll through Stripe, or a solo SaaS founder who simply needs an EIN to satisfy Stripe’s requirements. Different businesses, same trap.
This is a familiar story for anyone who has genuinely compared formation services rather than just reading their homepages. A provider advertises free formation, the founder signs up, and months later, a renewal notice arrives for a service they didn’t realize was still active, or an EIN request incurs an extra charge never mentioned in the original pitch.
This pattern repeats often enough across founder reviews and forums that it’s not really about any single provider. It’s the inevitable outcome of a low entry price paired with a higher recurring one.
The Free Formation, Not-Free Business Model
A free or near-free headline price answers exactly one question: what does filing the Articles of Organization cost today? It says nothing about the cost of a registered agent once the free first year ends, whether an EIN is included in the package or sold separately, or what auto-renews the moment you stop paying attention.
This isn’t necessarily dishonest. Forbes Advisor’s 2026 testing plainly notes that providers commonly monetize free formation plans through these exact optional add-ons: registered agent service, EIN filing, operating agreements, and compliance tools.
It’s a customer-acquisition strategy, not a scam. However, a strategy built around a low entry price and a higher recurring one only works if the founder doesn’t calculate year-two costs before signing up, which is precisely what a $0 headline is designed to discourage.
Be Specific About What “Cheap” Actually Costs
ZenBusiness currently advertises a $0 Starter plan plus state fees. However, registered agent service is an additional $99 for the first year under its current promotional pricing and renews at $199/year.
Its Starter plan also includes compliance, free for the first year, which renews at $199/year unless canceled. EIN processing is another $99 add-on. GenZone’s head-to-head comparison with ZenBusiness breaks down the full pricing gap specifically for non-resident founders.
Bizee employs the same $0 formation playbook with a different structure. The registered agent service is free for one year, then renews at $149.
For many foreign-owned single-member LLCs, obtaining an EIN is crucial due to federal reporting obligations, but the exact requirement depends on the LLC’s structure and circumstances. GenZone’s comparison with Bizee covers where that gap actually appears for a foreign-owned LLC.
Neither company is doing anything illegal, nor is either uniquely bad; this is close to standard practice across the discount end of the market. That’s precisely the point. If the standard practice involves a headline price that excludes services a real business needs, then the headline price was never a useful number for comparing providers in the first place.
What a Non-Resident Founder’s Real Bill Actually Includes
This is where general “cheapest LLC” content, written for a US-resident audience, quietly ceases to be useful.
EIN processing. A US resident with a Social Security Number can apply online and receive an EIN in minutes. A non-US founder whose principal place of business is outside the US is entirely excluded from that online application. If they handle it directly, they are limited to IRS phone, fax, or mail channels, which can take six to eight weeks.
That processing time gap is precisely where “EIN included” proves its worth, and where it often doesn’t. A provider that genuinely handles non-resident EINs can process it in days rather than weeks. So the question isn’t whether an EIN is in the price, but whether it’s the expertly handled, built-for-non-residents version or merely a line item that still leaves you in the IRS queue.
Form 5472 and a pro forma Form 1120. A foreign-owned US LLC treated as a disregarded entity generally has an annual information-reporting obligation, filing a pro forma Form 1120 with Form 5472 attached, regardless of whether any actual US tax is owed. Skipping it incurs a penalty starting at $25,000, with further penalties possible if it remains unfiled.
This is arguably the single biggest cost a “cheapest LLC” roundup can entirely omit, because it’s not optional like a business phone line, and many formation pricing pages genuinely don’t mention it. GenZone’s complete guide to US LLC filings for non-residents covers the filing mechanics in full; the narrower point here is: don’t assume it’s included in the price you were quoted.
ITIN, where applicable. Not every non-resident owner needs one, and getting an EIN doesn’t require one either. That is exactly why founders get quoted for it before anyone checks whether they need it. For those who do, whether a provider handles it, and whether it’s bundled or billed separately, rarely appears on a pricing page.
Most formation packages leave ITIN out entirely: some don’t offer it, some fold it into a higher tier, some sell it as a separate add-on. GenZone’s breakdown of which providers actually bundle LLC, EIN and ITIN covers when a non-resident genuinely needs one and who coordinates all three.
None of these three is exotic. They are simply the costs a US-resident-focused comparison has no reason to consider, and a non-resident founder has every reason to encounter.
The Cheapest Provider Isn’t Always the Cheapest Company to Run
This is the calculation founders should actually make.
Year 1 = Formation + state fees + registered agent + EIN + other services you actually need
Year 2 = Registered agent renewal + state requirements + federal compliance + other recurring services
Year 3 = Repeat the same calculation.
Now compare the providers. You may discover that the provider with the cheapest formation price isn’t the cheapest over two or three years. You may also discover the opposite. A higher-priced provider may not offer enough additional value to justify the difference.
The point isn’t to automatically choose the more expensive package. The point is to know what you’re buying.
The Only Math That Actually Matters
Skip the advertised price entirely and calculate two numbers instead.
True first-year cost = formation fee + state filing fee + registered agent (check the renewal date even if it says “free”) + EIN processing built for a non-resident + anything else actually required to operate.
True ongoing cost = registered agent renewal + required state filing + Form 5472/1120 compliance, whether the provider handles it or you budget for it separately + whatever recurring add-ons you actually kept.
Run both calculations, and the provider with the higher sticker price is often the cheaper one once all real costs are added. Run it again for year two, remove the one-time costs, keep the renewals, and the gap tends to widen, not close.
The Comparison You Should Actually Make
| Cost or service | What to check |
| LLC formation | Is state filing included? |
| State fees | Included or extra? |
| Registered agent | Included? What does it renew at? |
| EIN | Included? Especially for non-US founders? |
| Operating agreement | Included or extra? |
| State compliance | Who handles it? |
| Federal compliance | Relevant to your structure? |
| Banking | Is it included, referred, or completely separate? |
| Bookkeeping | Included or separate? |
| Human support | Basic support or dedicated advisor? |
| Year-two cost | What will you actually pay? |
Where GenZone Does This Differently
This is the exact gap GenZone was built to address: a single, disclosed annual price that includes formation, EIN processing, and registered agent service from the entry tier, with Form 5472/1120 compliance and US banking support with providers such as Mercury, Slash, and Stripe built into the middle and top tiers.
That’s a genuinely different model from the free-entry, recurring-upsell approach above, not because GenZone is cheaper on day one (it usually isn’t), but because the number quoted upfront is closer to the number actually paid.
A broader look at how GenZone stacks up against Bizee, Northwest, Doola, Firstbase, and others on formation speed and overall value, not just price, is available in GenZone’s comparison of the top US LLC formation services for non-residents. Full current package details are on GenZone’s US LLC page.
The lowest number on a pricing page was never truly the question. What it costs to actually run the business through year two always was.
8 Questions to Ask Before Paying for an LLC
Before choosing a provider, ask:
- What exactly does the advertised formation price include?
- Are state filing fees extra?
- What does the registered agent cost after the first year?
- Is EIN processing included, and does the service handle non-US applicants?
- What compliance filings will I need after formation?
- Does the provider handle those filings or do I need another service?
- Does the company actually help with US business banking?
- What will I realistically pay in year two?
If a provider gives you clear answers to all eight, you can make a much more informed comparison.
