Stripe for non-US founders: a US company, a merchant of record, or local Stripe

Stripe is the default way software companies take card payments, so it's the first thing many founders abroad try to set up. Then the sign-up form asks for a country, and theirs isn't on the list, or it is, with a note saying invitation only.

There are three ways around that. This guide explains why the first roadblock exists, what each route costs on a typical sale, who ends up responsible for sales tax and VAT, and which route suits which kind of business.

Why Stripe needs a business in a supported country

A Stripe account belongs to a business, and Stripe only opens accounts for businesses in the countries it supports. Once your business is in one of them, you can sell to customers anywhere.^⁠[1]

The list covers the US, Canada, the UK, most of Europe, Australia, Japan, Singapore, Hong Kong, the UAE, Brazil, Mexico and a few dozen others. India and Indonesia are marked as preview, and a handful of African countries as an extended network. For businesses elsewhere, Stripe offers a stablecoin treasury product, but says payments aren't supported yet.^⁠[1]

So the question isn't really how to get a Stripe account. It's which business, in which country, will be the seller.

Route 1: Stripe in your own country

If your country is on the list, this is the simplest route. Your local company is the seller, money lands in your local bank account, and you avoid running a second company abroad.

India is the case most readers here will hit. Stripe says it's available by invite only in India, so businesses there can't sign up through its website and must request an invite. It focuses on a select number of businesses that are expanding internationally.^⁠[2]

If you do get in, the account has to belong to a registered Indian business, meaning a sole proprietorship, LLP or company, and not an individual. To accept payments from abroad, you opt in to exports during onboarding and choose an RBI purpose code that describes what you sell. Sellers of physical goods must give an Importer Exporter Code, while for services it's optional unless you accept American Express from international customers or claim benefits under India's Foreign Trade Policy.^⁠[2]

Route 2: a US company with a US Stripe account

This is the route most founders abroad take. You form a US LLC or C corporation, get it an EIN and a US bank account, and open Stripe as that company.

What Stripe asks of you. You don't need an SSN or ITIN. Stripe says a business representative who isn't a US individual should give their local non-US tax ID and documentation showing they aren't a US taxpayer.^⁠[5] When someone on the account lives in a different country from the account's, Stripe accepts only a valid passport to verify their identity.^⁠[6]

Forming the company. Stripe Atlas costs $500 once, which covers incorporation in Delaware with the state fees, the company's tax ID, founder equity and the 83(b) filing, and the first year of a registered agent. The agent costs $100 a year after that. Atlas companies also get $2,500 in Stripe product credits for their first year.^⁠[3] Services such as doola form LLCs in other states and add ongoing compliance. Our comparison of doola, Firstbase and Stripe Atlas weighs them side by side, and our pillar on starting a US company from abroad covers the whole setup.

What it costs to run. Stripe's US pricing is 2.9% plus 30¢ for a domestic card. International cards add 1.5%, and currency conversion adds 1% more. Billing for subscriptions costs 0.7% of billing volume on the pay-as-you-go plan.^⁠[4] The company also has yearly filings, which for a single-member LLC owned from abroad include Form 5472. Our guide to Form 5472 and the other US filings lists them, and our guide to US bank accounts for non-residents covers where Stripe pays out.

What it leaves to you. With a regular Stripe account, your company is the seller, so sales tax in US states and VAT or GST abroad are your responsibility. Stripe Tax can calculate it, from 0.5% a transaction where you're registered to collect, but registering and filing in each place is still your job unless you pay for its higher plan.^⁠[4]

Route 3: a merchant of record

A merchant of record (MoR) sells your product to the customer in its own name, then pays you. Because it's legally the seller, it collects and remits the sales tax, VAT and GST, and handles fraud and chargebacks. You don't need a company in a supported Stripe country, only one the MoR will pay out to.

Three are worth knowing.

Paddle charges 5% plus 50¢ per checkout transaction, with no monthly fee, and includes global tax compliance, fraud protection, chargeback handling and billing support.^⁠[9] It works with software businesses anywhere except a list of sanctioned countries.^⁠[10]

Lemon Squeezy also charges 5% plus 50¢,^⁠[11] plus 1.5% for transactions outside the US, 1.5% for PayPal and 0.5% for subscription payments, and pays out to a bank account or PayPal.^⁠[12] There's a catch for India: since Stripe went invite-only there in May 2024, Lemon Squeezy says Indian merchants without a pre-approved Stripe account must take payouts through PayPal.^⁠[13]

Stripe Managed Payments is Stripe's own MoR. It charges 3.5% per transaction on top of the normal Stripe fees, calculated on the total including tax, and subscriptions add the Billing fee.^⁠[7] It handles tax in more than 80 countries, but your business has to be based in the US, Canada, the UK, the EU, Switzerland, Norway, Liechtenstein, Australia, Hong Kong, Japan or Singapore.^⁠[8] A founder in India can use it only through a company in one of those, such as a US one.

All three are for digital products. Stripe says Managed Payments doesn't cover physical goods, professional services such as consulting, design or development, or anything that involves human work per sale, such as live coaching.^⁠[8] Paddle's support is likewise for software businesses.^⁠[10]

What each route costs on a $49 subscription

Take one $49 monthly subscription paid by a customer in the US with a US card, with no sales tax charged. The fees work out like this.

These come from each provider's published rates.^{⁠[4],[7],[9],[11],[12]} For a customer outside the US, US Stripe adds 1.5% for the international card and 1% if currency is converted, and Lemon Squeezy adds 1.5%.^⁠[4],[12]

The gap of a dollar or so per sale is the price of the tax work. With US Stripe, the company has to work out where it owes sales tax or VAT, register there, collect it and file returns. A business selling to consumers in the EU, the UK and several US states can spend more on that in a year than the difference in fees. A business selling to a few dozen US companies may never need to register anywhere. Ask a tax adviser which describes you before you choose.

Who handles tax, and who holds the customer

The last row matters more than it looks. Subscribers' card details sit with whoever processes the payments, and moving thousands of active subscriptions is a project. Choose the route you expect to keep.

Which route fits your business

A SaaS or digital product selling to consumers worldwide. Start with a merchant of record. You get paid without a US company, and you skip VAT registration across dozens of countries. Paddle and Lemon Squeezy are the two to compare on fees, payout options for your country and how each handles migration if you leave.

A SaaS selling to US businesses. A US company with US Stripe is usually the better fit. Fees are lower, US enterprise customers often expect to buy from a US entity, and you'll want the company anyway if you raise money from US investors.

An agency or freelancer. Stripe's merchant of record excludes consulting, design and development,^⁠[8] and Paddle works with software businesses.^⁠[10] Most agencies invoice clients and get paid by bank transfer, and add US Stripe for card payments once they have a US company. Our comparison of Wise, Airwallex and Payoneer covers getting paid without one.

A store selling physical goods. Stripe's merchant of record doesn't cover physical goods either.^⁠[8] Use a US company with US Stripe, or local Stripe if your country is supported, and plan for US sales tax.

Before you choose

Check three things for your own case. First, whether Stripe supports your country today, because the list changes.^⁠[1] Second, whether the MoR you like pays out to your bank in your currency, and at what cost. Third, what you'll owe in tax registrations if you sell directly, which is the number that decides most of these comparisons.