{"id":159,"date":"2024-01-01T12:11:56","date_gmt":"2024-01-01T12:11:56","guid":{"rendered":"http:\/\/192.168.0.3\/ong\/?page_id=159"},"modified":"2025-11-20T05:50:07","modified_gmt":"2025-11-20T05:50:07","slug":"what-forms-do-foreign-owned-single-member-llcs-have-to-file","status":"publish","type":"page","link":"https:\/\/oandgaccounting.com\/staging\/foreign-owned-us-llc\/what-forms-do-foreign-owned-single-member-llcs-have-to-file\/","title":{"rendered":"What Forms Do Foreign-Owned Single Member LLCs Have to File?"},"content":{"rendered":"
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Every day, new LLCs are formed by foreign persons in the U.S.<\/h4>\n

As a CPA, I\u2019ve worked with many of these foreign-owned single member LLCs. Time and again, I hear questions from clients confused by what tax information they need to file\u2014or if they count as foreign-owned at all.<\/p><\/div>\n<\/div>\n

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Here are some answers:<\/h3>\n<\/p><\/div>\n<\/div>\n
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1. What Is a Foreign-Owned Disregarded Entity?<\/h4>\n

A \u201cdisregarded entity<\/a>\u201d is a business or organization that exists legally but doesn\u2019t have to file for income taxes. Any Single member LLC<\/a> that has not elected to be treated as a corporation is automatically a disregarded entity.<\/p>\n

Now, what about a \u201cforeign person?\u201d<\/p>\n

According to the IRS, \u201cA foreign person includes a nonresident alien individual<\/a>, foreign corporation, foreign partnership, foreign trust, a foreign estate, and any other person that is not a U.S. person.\u201d<\/p>\n

So, if you fit that description and you own an LLC, then congratulations! You have a foreign-owned disregarded entity.<\/p>\n

Now what?<\/h6>\n<\/p><\/div>\n<\/div>\n
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2. What Forms Do Foreign-Owned Single-Member LLCs Have to File?<\/h4>\n

Before 2017, the question of what IRS forms a foreign-owned LLC had to file came with a very different answer. Previously, if a foreign-owned LLC was a \u201cdisregarded entity\u201d and neither the owner nor the LLC had US sourced income or engaged in a US trade or business, there was no need to file anything at all.<\/p>\n

Ah, the good old days.<\/p>\n

Unfortunately, times have changed. Since 2017, foreign-owned single member LLCs have to get an employer identification number (EIN)<\/a> if they don\u2019t have one already.<\/p>\n

In order to obtain an EIN, the disregarded entity must designate a \u201cresponsible person.\u201d According to the IRS, that\u2019s \u201cthe individual who has a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the individual, directly or indirectly, to control, manage, or direct the entity and the disposition of its funds and assets.\u201d<\/p>\n

Then, once they have their EIN, they must file Form 5472<\/a> and pro forma Form 1120<\/a>.<\/p>\n

Don\u2019t worry, it really isn\u2019t as complicated as it sounds.<\/p>\n

The good news is that the new law doesn\u2019t add any new tax obligation provided your income is not \u201cUS sourced<\/a>\u201d, FDAP<\/a> or US Effectively Connected Income<\/a>. The foreign-owned SMLLC still isn\u2019t actually paying anything\u2014they remain disregarded entities for income tax purposes.<\/p>\n

So, the paperwork and hassle can be an added headache!<\/p>\n

Here\u2019s the rundown again:<\/p>\n

All foreign-owned single member LLCs are required to:<\/h6>\n