Delaware LLC from Russia: What Is Actually Legal 2026

Forming the company is the easy part. For a Russian founder, the question that matterss are whether a US provider can legally serve you at all, whether any platform will bank you, and what Russia expects you to report at home. Any page that answers "yes, no problem" to all three is selling you something.

Here is what is actually true, in three distinct layers that almost every guide blurs together: what US sanctions law actually says, what banking platforms actually do, and what the Russian side requires, including the CFC rules and a tax treaty that no longer works.

This is general information, not legal or tax advice, and it is a high-stakes, sanctions-sensitive topic covering sanctions and cross-border tax. Sanctions designations and Russian tax rules change. Confirm the current position with qualified advisors on both sides before acting. Nothing here assists any activity a sanction prohibits.

The short answer: it depends on where you live, not your passport

Two things are true at once. As of August 2026, per ofac.treasury.gov, no US law bars a Russian citizen, as such, from owning a Delaware LLC: sanctions screening runs against the SDN list and specific programs, not your passport cover. And where you live changes everything: US providers generally cannot serve a founder still located in Russia, and banking platforms exclude Russia outright. Your residence, not your citizenship, is the variable that decides your case.

First, which are you: still living in Russia, or a relocant?

This is the single most decision-changing question, and on the US side it matters even more than it does for Singapore or Hong Kong. Under a Treasury determination issued under Executive Order 14071 (May 2022, per home.treasury.gov), US persons are prohibited from providing corporate formation services to persons located in the Russian Federation. Still tax resident in Russia usually means still located there, and the full Russian reporting stack below also applies.

The takeaway: a relocant with legal residence outside Russia has a categorically different position, on the US side and the Russian side at once. A founder still in Russia should not expect a compliant US provider to form the company at all. Read the rest with your own status in mind.

1. 1
   Layer 1: US lawSanctions programs operate on designations and defined activities, not on nationality as such. Delaware itself asks nothing about your passport.
2. 2
   Layer 2: platform policyBanks and fintechs apply their own restricted lists, usually keyed on country of residence first. This is where most applications actually fail.
3. 3
   Layer 3: your own positionDesignation status, current residence and document set decide the outcome, case by case.

Layer 1: the law (OFAC), what is prohibited and what is not

US sanctions are administered by the Treasury's Office of Foreign Assets Control, and precision matters. As of August 2026, per ofac.treasury.gov, the structure has two tiers, plus one Russia-specific measure:

• Comprehensive programs cover Cuba, Iran, North Korea, Syria and the Crimea, Donetsk and Luhansk regions of Ukraine. US persons broadly cannot serve people ordinarily resident there. Russia is not in this tier.
• Targeted, list-based programs cover Russia, mainly under Executive Order 14024 and related authorities: more than 17,000 names on the SDN list, designated banks, and sectoral measures. Prohibitions attach to listed persons and specific activities, not to every Russian citizen.
• The services determination under EO 14071, described above, prohibits US persons from providing corporate formation services to persons located in Russia, as of August 2026.

Two conclusions follow that the internet keeps getting wrong. There is no single list of banned nationalities for owning a US LLC. And a non-SDN Russian citizen living outside Russia is not, by itself, prohibited from owning a Delaware LLC under OFAC rules as of August 2026. The general mechanics of ownership are in our guide to a Delaware LLC for non-US residents.

Layer 2: platform policy, stricter than the law

This is the layer that actually determines your experience, and it is commercial policy, not statute. Registered agents typically screen against the SDN list and comprehensive programs, which a non-SDN relocant passes. Banking platforms apply a second, much tighter filter:

• Mercury excludes Russia, and secondary reports describe screening on both residence and citizenship for Russian founders; its official country list was not directly verifiable at the time of writing, per platform policy as of August 2026.
• Relay excludes Russian and Belarusian citizens per reports of its policy as of 2026, and now expects a US operational presence.
• Realistic remaining routes are assessed case by case on your current residence: Wise and Payoneer screen individually, Airwallex covers more countries, and traditional US banks generally want an in-person visit. Each runs full KYC on you as beneficial owner.

Be clear-eyed about all of this. These lists change without notice, a rejection at one fintech is usually final for that LLC, and no provider, including us, can promise a Russian founder a bank account. What a good file does is move you from automatic refusal to genuine case-by-case review. The full landscape, fees and anti-refusal preparation are in opening a US business bank account.

Layer 3: the Russian side, CFC, notifications and a suspended treaty

This is where the cheerful guides go silent. If you remain a Russian tax resident, owning a Delaware LLC creates real reporting duties at home, per nalog.gov.ru:

Add the currency-control layer: the US has been on Russia's "unfriendly states" list since March 2022, so transactions between a Russian resident and a US entity can trigger special procedures and approvals. A relocant who has genuinely lost Russian tax residency escapes most of this stack, which is another reason the first question on this page matters.

The treaty is suspended, so plan on full withholding

The US-Russia tax treaty no longer provides relief in either direction. Russia suspended its side by Decree No. 585 of August 8, 2023, and the US confirmed suspension of Articles 1(4), 5 through 21 and 23 of the 1992 Convention effective August 16, 2024, per IRS Announcement 2024-26, until otherwise decided. Still suspended as of August 2026.

Practically: US-source dividends, interest and royalties paid to a Russian resident face the full 30% withholding on gross, with no treaty reduction, and a transparent LLC would not have opened entity-level treaty benefits anyway. When your LLC's profits are US-taxable at all, and what you must file even at 0%, including the $25,000 Form 5472 penalty, is covered in Delaware LLC taxes for non-residents.

Related reading: Delaware LLC for non-US residents, opening a US business bank account and Delaware LLC taxes for non-residents.