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ITIN, EIN, and SSN: Which One You Need and Which One Your Company Needs
You've formed your LLC, and the bank asks for an EIN. Your U.S. accountant mentions you may need an ITIN. And an acquaintance assures you that without a Social Security number you can't do anything. Three acronyms, three different processes, and the feeling that everyone is asking you for a different number.
The confusion is understandable, because all three identify you within the U.S. tax system. But they aren't interchangeable, and applying for the wrong one (or at the wrong time) delays opening bank accounts, filing taxes, and running the business.
Here's the quick summary:
Number | Whose is it? | What is it for? | Who gets one? |
EIN | The company's | Bank account, taxes, payroll, and business invoicing | Every LLC or corporation operating in the U.S. |
ITIN | Yours, as an individual | Meeting personal tax obligations with the IRS | Anyone who must file in the U.S. and isn't eligible for an SSN |
SSN | Yours, as an individual | Working legally and handling personal taxes | Citizens, residents, and people authorized to work in the U.S. |
EIN: the U.S. equivalent of your company's mexican RFC
It's the first number you need, and it belongs to the company, not to you. With it, the company opens its bank account, files returns, hires employees, and issues invoices to clients who request it. Without an EIN, a newly formed LLC exists on paper but can't operate.
What few people explain is that if the owner has neither an SSN nor an ITIN, the application can't be completed online: it's filed with Form SS-4 by fax, by mail, or, for international applicants, by phone. That adds time you should factor in from the start, especially if a client or contract is waiting for the company to be able to invoice. Aurum CG obtains the EIN as part of the formation process, so your company isn't just registered: it's ready to operate.
ITIN: only when the IRS requires it from you
The ITIN is for individuals who have U.S. tax obligations but aren't eligible for an SSN. A foreign owner needs one, for example, when they must file a personal return with the IRS because their single-member LLC generates income that flows through directly to them, or when they want to claim tax treaty benefits. It's requested with Form W-7, usually together with that return.
Two clarifications prevent misunderstandings: an ITIN does not authorize you to work in the U.S., and it does not replace your company's EIN. It's also common to apply for one before it's needed, just because someone recommended it, when the right timing depends on when your first personal tax obligation arises.
SSN: you don't need one to be an owner
A Social Security number is issued to people authorized to work in the U.S.: citizens, residents, and holders of certain work visas. If you live in Mexico and run your company from there, you don't qualify for an SSN, and you don't need one. You would get one, for example, upon arriving in the U.S. on an E-1 or E-2 visa. Owning a company is not the same as being authorized to work for it.
What the bank will ask you for
The bank account is where confusion among the three numbers gets most expensive, because each bank applies its own criteria. You'll generally be asked for the company's EIN, the formation documents, your passport, and, in some cases, a U.S. address or an in-person visit to a branch. Some banks also ask the owner for an ITIN or SSN, even though the law doesn't require one to own a company. Knowing ahead of time which banks work with foreign owners and what documents they require saves you wasted trips and rejected applications. Part of Aurum's support is putting that bank file together with you and pointing you toward institutions that do open accounts for companies with foreign owners.
What about your Mexican RFC?
It's still essential, but only in Mexico. No U.S. process accepts it in place of an EIN or ITIN, and at the same time, your Mexican accountant will need it to report the income your U.S. company generates to the SAT. They are parallel systems: each country with its own number.
The order matters too
The most common delays come from applying for the numbers out of sequence: an ITIN that isn't needed yet, a bank account you try to open before having the EIN, or a third party listed as the company's responsible party instead of the actual owner. Before starting any application, at Aurum we review that sequence with you: who should be listed as the responsible party, which number is needed first, and whether your case will require an ITIN for your first return.
Your company needs an EIN from day one. You'll need an ITIN or an SSN depending on how you participate in the business, and getting this clear from the start will save you months of paperwork.
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