Can a Foreigner Own a US LLC?

Yes. The IRS notes that most states do not restrict LLC ownership, and the federal default classification rules turn on the number of members, not where they live. Formation is a state filing; the federal question for a non-resident owner is which return the LLC files each year.

With one non-resident owner and no election, the LLC is disregarded for income tax. Because that owner is a foreign person, Treas. Reg. §301.7701-2(c)(2)(vi) treats the LLC as a corporation for section 6038A reporting only, which is why it files Form 5472 in any year it has a reportable transaction with its owner.

Yes. A foreign corporation can be the sole member or one of several members. If it is the only member, the LLC is a foreign-owned disregarded entity, files Form 5472 with a pro forma Form 1120 in any year with a reportable transaction, and lists the foreign company in Part II.

A disregarded LLC's activities are treated as those of its owner, so a foreign company whose LLC carries on a US trade or business may have its own return to file: the Form 1120-F instructions require one from a foreign corporation engaged in a US trade or business during the year. Ownership chains and ultimate owners are covered in Form 5472 when a foreign company owns the LLC.

A domestic LLC with two or more members is classified as a partnership unless it elects to be taxed as a corporation. A partnership is not a disregarded entity, so the foreign-owned DE rule behind the pro forma Form 1120 does not apply; the LLC files Form 1065 instead.

The Form 1065 instructions require every domestic partnership to file unless it neither receives income nor incurs expenditures treated as deductions or credits. A partnership with income effectively connected with a US trade or business must also pay section 1446 withholding tax on the share allocable to foreign partners, reported on Forms 8804 and 8805. See multi-member LLCs with foreign owners.

If the LLC elects to be taxed as a corporation, it files a regular Form 1120 instead, and Form 5472 can apply because a 25% foreign shareholder makes it a reporting corporation.

The annual filing follows the LLC's federal classification, and the classification follows the number of members and any Form 8832 election. A single foreign owner files the pro forma package; a multi-member LLC files a partnership return; an LLC that elects corporate status files a regular Form 1120.

The table covers the LLC's own federal filings. Owners can have separate US returns of their own, for example when the LLC's income is effectively connected with a US trade or business, and state filings are separate again.

Apply on Form SS-4 by fax or mail. The IRS online application requires the responsible party to have a valid SSN, ITIN or EIN, and international applicants with no US legal residence, principal place of business or office can apply by telephone at 267-941-1099 (not toll-free).

Form 5472 line 1b asks for the LLC's EIN, so the number is needed before the first filing. Step by step: EIN for a foreign-owned LLC without an SSN.

The IRS instructions set a $25,000 penalty for failing to file Form 5472 when due and in the manner prescribed, and a substantially incomplete form counts as a failure to file. If the failure continues more than 90 days after IRS notice, a further $25,000 applies for each 30-day period.

Owners who missed earlier years can start with the late Form 5472 guide.

Yes. For a single-member LLC owned by a non-resident or a foreign company, Form5472 Prep prepares the pro forma Form 1120, Form 5472 and Part V statement, and faxes the package to the IRS. Every filing is reviewed by a qualified accountant before it is submitted. We do not prepare partnership returns.

See the foreign-owned LLC tax filing service for what is and is not included.