Owning a US single member LLC (SMLLC) as a non resident alien or as a foreign corporation can be an efficient way to do business with US and global clients. But many non residents misunderstand the rules. Even if you never set foot in the US, your SMLLC still comes with IRS filing requirements—and mistakes can trigger severe penalties.
This FAQ explains the essentials for non resident owners:
- Whether and when your income is taxable in the US
- Which mandatory filings apply (even if you owe no tax)
- The difference between federal and state tax exposure
- How our firm supports foreign owners with formation, compliance, and ongoing reminders
- What we do—and what we don’t do—for you
FAQs
Q1. I am a non resident alien and own a US SMLLC. Do I pay US federal income tax?
A: Not if all services are performed outside the US. Federal rules source service income to where the work is done. If you never perform work in the US, your service income is foreign sourced and not federally taxable. However, if you perform services while physically present in the US, or have a US trade or business, taxation may apply.
Q2. Does this change if the SMLLC is owned by a foreign corporation?
A: The principle is the same: service income is sourced to where services are performed. But compliance rules are stricter—foreign corporate owners of US SMLLCs must also ensure that related party reporting (Form 5472) is done properly.
Q3. Could I still owe state tax?
A: Yes. Some states, especially California, apply market based sourcing (client location) rather than place of performance. That means even if no federal tax is due, state level filings or taxes may apply.
Q4. What exactly is Form 5472 and pro forma 1120?
A: For non resident owners of SMLLCs, these are mandatory IRS filings. They disclose related party transactions (for example, when you fund the LLC, withdraw funds, or extend loans). The penalty for late or missing filings starts at $25,000 per year.
Q5. I don’t owe federal tax. Do I still need bookkeeping?
A: If your US position is no tax liability, a clean spreadsheet plus our organizer is usually enough for Form 5472 + 1120. But if you have federal or state exposure, we require professional bookkeeping to prepare accurate filings.
Q6. Does engaging a US CPA make my LLC a US tax resident?
A: No. Hiring us does not create a permanent establishment or US office. We do not provide a virtual office or business address.
Q7. Can you open a US bank or merchant account for me?
A: No. We supply formation and EIN documents; you must apply directly to banks or fintechs (e.g., Mercury, Relay, or traditional US banks if you visit in person).
Q8. Is US bank interest taxable to me as a non resident?
A: No – Deposit interest paid to non residents is exempt from US federal tax. Your home country may still tax it.
Q9. Is all LLC income automatically mine?
A: Yes. For tax purposes, a foreign owned SMLLC is disregarded. The IRS treats the income and expenses as directly yours (the non resident owner’s, or the foreign corporation’s).
Q10. Will you remind me about filings each year?
A: Yes. Once you are a client, we send annual reminders and provide the organizer to gather information for your filings.
Q11. How do you provide advisory?
A: Through scheduled calls (15, 30, or 60 minutes). We do not provide open ended email advice. Anything required to complete a filing is included in that filing’s fee.
Q12. What’s included in your formation package?
A: Filing Articles of Organization, a standardized Operating Agreement, organizer resignation letter, EIN application support, and Year 1 registered agent service.
Q13. What is not included?
A: Bank account opening, virtual office services, and your home country tax compliance are outside our scope.
Q14. What should I tell you before doing?
A: Performing work in the US, hiring US staff, leasing offices, storing US inventory, adding members, or taking on clients in California or other market sourcing states.
What We Do
- Form your US SMLLC (Articles, Operating Agreement, organizer resignation)
- Apply for your EIN
- Provide Year 1 registered agent service
- Prepare annual IRS filings (Form 5472 + pro forma 1120)
- Handle state filings if engaged
- Offer bookkeeping packages when needed
- Deliver advisory through scheduled calls
- Send compliance reminders annually
What We Don’t Do
- Open bank or merchant accounts
- Provide a virtual office or US tax presence
- File your home country taxes
- Offer unlimited email consulting
For non resident aliens and foreign corporations, a US single member LLC can be a simple and effective vehicle for international business—if managed correctly. Even when no federal tax is due, the obligation to file Form 5472 + pro forma 1120 remains. Our role is to handle the US side—formation, filings, reminders, and compliance—while you coordinate with a local advisor for your home country taxes.
