If you’re a non-U.S. resident who owns a Limited Liability Company (LLC) in the United States, you may be unsure about whether you need to file a U.S. tax return. In most cases, the answer is yes—but the details depend on your business structure, activities, and state of formation.
Understanding these requirements is critical to staying compliant and avoiding costly penalties.
Why Foreigners Form U.S. LLCs
International founders often set up U.S. LLCs to access American customers, accept payments through U.S. processors like Stripe, and establish credibility with investors. While LLCs are straightforward to form, they come with ongoing federal and state reporting obligations—regardless of where you live.
The IRS Still Wants to Hear From You
For tax purposes, the IRS classifies most single-member LLCs as “disregarded entities.” This means the LLC itself doesn’t pay tax, but the owner must report the income. If the owner is a foreign person, the LLC is treated as a foreign-owned U.S. disregarded entity.
This classification requires annual filing of Form 5472 and a pro forma Form 1120, even if the LLC made no money.
You may also have to file Form 1040-NR if the LLC is engaged in a U.S. trade or business or has U.S.-source income. State-level annual reports or franchise taxes may also apply.
What Triggers a Filing Requirement?
Owning a U.S. LLC can require you to file even if you have no income. Common triggers include having a U.S. bank account, selling to American customers, paying yourself or contractors from the LLC, or simply being a non-U.S. person who owns 25% or more of the LLC.
No Income? You Still May Need to File
Many foreign founders believe that no income means no filing—but if your LLC had any “reportable transactions” during the year, you’re still required to submit Form 5472 with a pro forma 1120. Examples of reportable transactions include capital contributions, loans, or payments to the owner.
Multiple-Member LLCs
If your LLC has more than one owner, it is generally treated as a partnership for U.S. tax purposes, which requires filing Form 1065 and issuing Schedule K-1s to members. Partnerships with foreign members add extra complexity, so professional help is strongly recommended.
Risks of Not Filing
Failing to file Form 5472 can lead to penalties starting at $25,000 per year, per form. Additional penalties apply for incomplete or inaccurate submissions. In some cases, your LLC could lose good standing with its state, affecting your ability to operate or maintain a bank account.
Real-World Example
Consider a Nigerian entrepreneur who forms a Wyoming single-member LLC to sell software online. Even if no sales occur in the first year, if the LLC receives a capital contribution from its owner’s foreign bank account, that transaction must be reported via Form 5472 and a pro forma 1120.
Skipping this filing could trigger a $25,000 penalty.
How Bookmate Can Help
Bookmate works with foreign-owned companies, online small businesses, and venture-funded startups—especially those with international founders—to handle U.S. compliance from start to finish. We prepare the required filings, ensure accuracy, and keep you ahead of deadlines.
Learn more at trybookmate.co or book a free consultation to discuss your specific needs.
Final Thoughts
Every situation is unique. Don’t assume you can skip filing because your LLC had no income—failing to meet reporting obligations can be far more expensive than hiring a professional to do it right the first time.
