Navigating US tax terminology is confusing. When you try to open a business bank account or sign up for Stripe, you are often asked for a “Tax ID.”
Sometimes they ask for an EIN. Sometimes they ask for an SSN or ITIN.
For a non-resident founder living outside the US, knowing the difference is critical. Applying for the wrong one can waste months of time and lead to rejection letters from the IRS.
Here is the technical breakdown of the two primary tax numbers you will encounter and the correct order to obtain them in 2026.
1. The EIN (Employer Identification Number)
Think of the EIN as the Social Security Number for your business.
It identifies your company (LLC or C-Corp) to the IRS. It has nothing to do with you personally. It belongs to the legal entity.
- Who Needs It: Every US LLC or Corporation must have one.
- What It Is For: You cannot open a business bank account (Mercury, Brex, Chase) without it. It is also required to hire employees and file company taxes.
- How to Get It (Non-Residents): This is the first step you should take. Since you do not have a Social Security Number, you cannot use the online IRS portal. You must file Form SS-4 via fax or mail.
- Timeline: Fax filings typically take 4 to 14 business days. Mail filings can take 4 to 6 weeks.
Verdict: You need this immediately after forming your company.
2. The ITIN (Individual Taxpayer Identification Number)
Think of the ITIN as a substitute Social Security Number for you.
It identifies you as an individual taxpayer. It is used for personal tax reporting because you are not a US citizen and cannot get an SSN.
- Who Needs It: You generally only need this if you have a federal tax filing requirement (e.g., your LLC made a profit and you need to file a personal tax return) or if a payment processor like PayPal specifically demands it for identity verification.
- How to Get It: This process is much harder than the EIN. You must file Form W-7.
- The Challenge: The IRS requires you to prove your identity. You must either send your original passport to the IRS by mail (which most people want to avoid) or use a “Certifying Acceptance Agent” (CAA) who can verify your passport in person or via video call.
- Timeline: It typically takes 7 to 11 weeks (or up to 120 days during peak season).
Verdict: You usually do not need this to start. You can open your company and bank account with just an EIN. You typically apply for the ITIN later, when tax season arrives.
Summary of Differences
To clarify the distinction, here is a quick comparison:
- EIN: Identifies the Business. Required for Banking. Easy to get via Fax.
- ITIN: Identifies the Person. Required for Personal Taxes. Hard to get (requires Passport).
The Common “Stripe Problem”
Many non-resident founders panic when Stripe or PayPal asks for the “last 4 digits of your SSN” during signup.
Since you do not have an SSN, you might think you need to rush and get an ITIN.
The Solution: In many cases, you do not. If you have a valid EIN for your company, you can often contact Stripe support and explain that you are a foreign entity. They may allow you to upload your passport and EIN letter instead of requiring an ITIN. Always try this route before starting the long W-7 application process.
Final Thoughts: Order of Operations
Do not try to do everything at once. The correct order for a non-resident founder is:
- Form your LLC (Get your Articles of Organization).
- Get your EIN (File Form SS-4).
- Open your Bank Account (Use the EIN).
- Start Business Operations.
- Get your ITIN (File Form W-7 only when you are ready to file your first tax return).
Applying for an EIN as a non-U.S. founder often requires manual IRS processes. Clemta assists by handling Form SS-4 preparation and submission, helping founders receive their Tax ID without unnecessary friction.
