Frequently Asked Questions

US Taxes and Foreign Owned LLCs

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What are the Federal Tax Compliances for a Foreign Owned Sole-Member LLC?

In 2017 the United States underwent a major tax reform. It significantly expanded filing requirements, and also increased penalties for not filing or filing incorrectly.

There are two primary filing requirements that affect foreign-owned, single-member LLCs.

  • Form 5472
  • Form 1120
Form 5472

All foreigners who own a US LLC must file a 5472 US tax return with the IRS for disclosure purposes even if they had zero income for the year.

On the Form 5472 you will report only three basic financial information:

  • The value of the LLC as of the 31st of December of the tax year
  • The amount of money moved from the non-US owner to the LLC in the tax year
  • The amount of money moved from the LLC to the non-US owner in the tax year
Form 1120

Compared with Form 5472, pro forma Form 1120 is a piece of cake. Because you are a foreign-owned LLC, the IRS let’s you fill out Form 1120 with reduced information.

The only information the IRS require on Form 1120 is as follows:

  • The name & address of the foreign-owned disregarded entity
  • The Employer Identification Number (EIN)
  • Checkboxes for initial returns, final returns, or name & address changes
  • Write “Foreign-owned U.S. DE” across the top of the form
  • A signature

Once you’re done you send Form 1120 in with Form 5472

Both forms are due by the 15th of April of the year after formation (for example, if you were formed before 31st December 2021 then your return would be due before the 15th April 2022).