Why Global Founders Need an ITIN for Business Growth?

Introduction

If you have been running a U.S.-facing business from another country, there is a moment when everything seems fine on the surface your LLC is formed, your EIN is active, your Stripe account works, your store is live and then a platform suddenly asks for something you did not expect: “Please submit your ITIN.” You pause. You Google. You get confused. Because nobody really explains what ITIN means for global founders.

An ITIN is not complicated. It is simply a tax identity number for people who can not get an SSN, which is nearly every non-resident founder. And if you are doing business in the United States in any meaningful way, an ITIN becomes less of an “optional convenience” and more of a “required piece of the puzzle.” If you need to secure your ITIN quickly, the Business Globalizer ITIN application service helps global founders verify their identity without IRS delays.

What Exactly is an ITIN?

An ITIN is a tax identification number issued by the IRS to people who:

• are not eligible for a Social Security Number (SSN)
• but still need to handle U.S. tax filings, verification, or financial matters

It is used for:

• taxes
• banking identity verification
• PayPal verification
• investment reporting
• legal paperwork
• compliance situations

If you are a non-U.S. citizen, you cannot get an SSN unless you move to the U.S. with work authorization. So the ITIN becomes your official identity number for anything related to U.S. tax and financial systems.

It does not give:

• work permits
• immigration benefits
• citizenship routes

It simply allows the IRS and financial institutions to identify you correctly. For Global Founders, however, it becomes critically important.

Why Global Founders Eventually Need an ITIN?

At the beginning of your business journey, you may get away without one. You can form a company with a registered agent, get an EIN, open banking through Mercury/Relay, and even launch your store. But as your business matures, the ITIN becomes essential. Here is why.

1. PayPal Almost Always Asks for an ITIN

If you operate using PayPal U.S., sooner or later, they will request an ITIN to:

They do this to:

• Confirm tax identity
• Increase transaction limits
• Reduce risk scoring
• Prevent payout holds
• Complete “Know Your Customer” (KYC) verification

Many founders only apply for an ITIN when PayPal freezes their accounts. Getting it earlier keeps your cash flow smooth.

2. Tax Filing for Foreign-Owned LLCs Requires an ITIN

If you are a non-resident running a U.S. LLC, you must file annual IRS forms even with zero income.

To file:

• Form 1040-NR
• Form 5472 (for single-member LLCs)
• Additional documents, depending on business activity

These forms require a valid taxpayer identity → ITIN. If you want your annual filings handled correctly, a U.S. tax filing service ensures your LLC stays compliant even if you operate from abroad.

Skipping tax filings can trigger:

• Penalties
• Late fees
• IRS notices (CP565, CP566, CP567)
• Loss of good standing

Founders often underestimate how seriously the IRS takes paperwork.

3. Banks and Payment Gateways Use It for Identity Verification

Some fintech banks work with an EIN and a passport alone. But many traditional banks and payment systems treat ITINs as higher-trust identities.

Scenarios where ITIN helps:

• Higher account limits
• Business credit applications
• Additional verification requests
• Reducing compliance reviews

Think of it as strengthening your financial credibility in the U.S. system. Founders using modern fintech banks like Mercury or Relay often streamline their onboarding with an approved international fintech bank account that supports non-residents.

4. It Helps You Claim Tax Treaty Benefits

If you live in a country that has a tax treaty with the U.S., an ITIN helps you:

• Reduce withholding
• Avoid double taxation
• File non-resident tax returns properly

Without an ITIN, you can not take advantage of those benefits.

5. Required for Certain U.S. Investments

If you invest in:

• S. real estate
• S. stocks (certain brokers)
• Partnerships or ventures
• Income-generating assets

The IRS often needs an ITIN to record your tax responsibility. Global investors cannot avoid ITIN. It is simply part of the system.

How to Know If You Need an ITIN?

Here are the clear signs that an ITIN becomes mandatory:

1. You run a U.S. business, and PayPal asks for it
2. You own a U.S. single-member LLC
3. You need to file Form 1040-NR
4. The IRS has issued a notice requesting that you obtain an ITIN.
5. You are a partner in a U.S.-based company
6. A tax ID is needed if you invest in U.S. stocks or real estate.
7. You want to claim tax treaty benefits
8. Make sure to renew your ITIN when it expires.
9. You are a founder earning U.S. income but living abroad.

If any of the above is true, ITIN is your next step.

Other Cases Where an ITIN is Required

Beyond founders, other groups also require an ITIN:

1. Spouses of non-resident taxpayers: Needed when filing joint or dependent-related tax returns.
2. Dependents of non-resident taxpayers: For claiming the child tax credit or filing dependent-related documents.
3. International students: For U.S. tax filing, scholarship reporting, or receiving stipends.
4. Foreign investors: For U.S. real estate sales, rental income, capital gains, or FIRPTA.
5. Foreign property buyers/sellers: To comply with mandatory IRS reporting and withholding requirements.
6. Non-resident taxpayers with U.S. income: Consultants, freelancers, creators, or business owners paid from the U.S.

These cases do not fit the “founder” category but follow the same ITIN rules.

Common ITIN Mistakes Global Founders Make

Most delays and rejections happen due to preventable errors:

1. Applying without the required documents
2. Ignoring IRS notices
3. Filing tax returns without an ITIN
4. Assuming EIN is enough for PayPal
5. Using expired ITINs
6. Sending passports without proper certification
7. Using incorrect IRS forms
8. Applying through non-verified agents
9. Assuming ITIN gives immigration benefits
10. Waiting until PayPal freezes funds

These lead to delays, rejections, or unnecessary complications.

How does an ITIN help your Business Run Smoother?

You will notice this once you have it:

1. Payment platforms stop asking questions: Identity → verified, Limits → increased, and Reviews → reduced.
2. IRS filings become straightforward: No more manual corrections or rejections.
3. You gain financial credibility: Especially important when dealing with U.S. banks or suppliers.
4. You stay compliant without confusion: Founders underestimate how comforting it feels to “be in the system correctly.”
5. You remove future obstacles: PayPal, banking, taxes all become simpler.

It is not about “wanting” an ITIN. It is about preventing problems your business will eventually face.

Expert Tips for Global Founders

Some very useful and practical tips from experts:

1. Do not wait for PayPal to freeze funds apply early.
2. Keep documents consistent: names, addresses, spelling, and formatting.
3. Never send original passports without verification (use a CAA).
4. Track your IRS correspondence notices matter.
5. Renew the ITIN if the middle digits fall within expired ranges (70–88, 90–99).
6. Use an ITIN for proper 1040-NR filings each year, if required.
7. Save prior IRS letters they simplify future filings.
8. Use a professional agent if you are abroad (errors = months of delay).
9. Remember: EIN is for your company, ITIN is for you.
10. Treat ITIN as part of your long-term U.S. business foundation.

Hassle-Free ITIN Application for Global Founders

If you prefer avoiding IRS errors, document rejections, notice delays, and complex verification steps, Business Globalizer handles the entire process for global founders.

They Provide:

1. ITIN application through IRS-verified CAAs
2. U.S. company formation
3. U.K. & UAE formations
4. EIN assistance
5. Banking setup (Mercury, Relay, Wise, Revolut)
6. Payment gateway support (Stripe, PayPal)
7. All yearly compliance & taxation
8. High-risk merchant solutions
9. Trademark registration
10. Resale certificates
11. U.S. eCommerce setup

For this topic, two services matter most:

• ITIN Application Support (essential for PayPal verification and tax filings) through IRS-verified CAA
• Banking Support the part many founders struggle with, but the part payment processors care about most.

They handle the paperwork, so founders do not lose months fixing avoidable mistakes.

Final Thoughts

For global founders, an ITIN is not just a tax formality it is part of the backbone that keeps your U.S. business stable. It reduces friction, increases trust, helps your payment systems run properly, and keeps you on the right side of compliance.

• You do not need to be in the U.S.
• You do not need a visa.
• You do not need a Social Security Number.

But if you are building a business linked to the United States in any meaningful way, the ITIN becomes a natural part of your growth. A smoother business is just a cleaner structure away.

Recommended Articles

We hope this guide on ITIN for Global Founders helped you understand U.S. tax compliance. For more tips, explore related resources below:

1. US GAAP
2. New Tax Regime
3. Global Tax Brackets
4. Tax Deductions on Business Equipment