If you own a US LLC or corporation from outside the United States, you almost certainly have a filing obligation — even if the company made no money, has no US customers, and never opened a bank account. The requirement that surprises most foreign owners is Form 5472, and unlike most tax forms, the penalty for skipping it is not a percentage of what you owe. It is a flat amount, and it applies whether or not any tax was due.
This guide covers what you have to file, in what combination, by when, and what happens if you get it wrong. It is written for people who own a US entity from abroad rather than for accountants.
First, work out what your entity is for tax purposes
The confusion usually starts here, because the legal form of your company and its tax treatment are two different things.
A single-member LLC with one foreign owner is, by default, a disregarded entity. The IRS looks through it to the owner. That sounds like it means no filing — and for decades it broadly did. Since 2017 it does not.
A multi-member LLC is treated by default as a partnership and files Form 1065.
A corporation, or an LLC that has elected corporate treatment, files Form 1120.
Which of these you are determines the rest of this guide, so confirm it before going further. If you formed a single-member LLC in Delaware, Wyoming or New Mexico and never filed an election, you are almost certainly a disregarded entity.
The rule that catches foreign owners: Form 5472
Form 5472 is an information return. It reports transactions between your US entity and its foreign owner or other related parties.
Since the 2017 regulatory change, a foreign-owned single-member LLC is treated as a corporation for this reporting purpose only. That has three consequences that surprise almost everyone:
- You must obtain an EIN for the LLC, even if you have no employees and no US bank account.
- You must file Form 5472 attached to a pro forma Form 1120 — a mostly blank 1120 with just the identifying details completed.
- You must do this even in a year with no income and no profit, provided a reportable transaction occurred.
That last point is where people come unstuck. "No income" does not mean "no filing".
What counts as a reportable transaction
The definition is broader than most owners assume. It includes money moving between you and your own company in either direction, not just sales and purchases. Contributing capital to the LLC is reportable. Taking a distribution is reportable. Paying a company expense from your personal account is reportable. Lending the company money is reportable.
In practice, if anything financial happened between you and your LLC during the year — including simply funding it — you have a reportable transaction and a filing requirement.
Formation of the entity and its dissolution are themselves reportable events, which is why an LLC formed in a year and left dormant still typically has a first-year filing.
What you actually file, by entity type
| Your entity | Forms | Notes |
|---|---|---|
| Foreign-owned single-member LLC (disregarded) | Pro forma 1120 + Form 5472 | Information only; no tax computed on the 1120 |
| Foreign-owned multi-member LLC | Form 1065 + K-1s | Plus 5472 in some structures |
| C corporation with foreign shareholders | Form 1120 (full) + Form 5472 | Actual tax computed |
| Any entity with US-effectively-connected income | Add the relevant owner-level return | You may also need Form 1040-NR personally |
This table shows the common cases, not every case. Structures involving multiple related foreign parties, branches, or treaty positions have additional requirements.
Deadlines and extensions
The pro forma 1120 with Form 5472 is generally due on the 15th day of the fourth month after your tax year end — 15 April for a calendar-year company. Corporations filing a full 1120 follow the same general timing.
An extension is available by filing Form 7004 before the deadline, which typically moves the filing date by six months. Note the standard warning that applies to every extension: it extends the time to file, not the time to pay. If tax is owed, interest runs from the original date.
Check the current year's dates on IRS.gov before relying on any of this. Deadlines shift when they fall on weekends and holidays, and fiscal-year companies work to a different calendar.
Filing mechanics — the part that wastes people's time
The pro forma 1120 plus 5472 combination has historically been awkward to submit. Many consumer tax platforms will not produce it, and depending on your circumstances the return may need to be faxed or posted to the IRS rather than filed electronically.
Two practical points:
- Get the EIN early. Applying without a US Social Security Number or ITIN means the online application is unavailable to you, and the alternative routes take considerably longer. Owners routinely underestimate this and miss deadlines waiting for a number.
- Keep the records that support the form. You are required to maintain documentation of the reportable transactions. A spreadsheet of transfers between you and the company, with dates and amounts, is the minimum.
The penalties, and why they are the real story
Failure to file Form 5472, or filing it substantially incomplete, currently attracts a penalty of $25,000 per form, per year, with further amounts accruing if the failure continues after IRS notice.
Three things make this worse than it first appears:
- It is not proportional to income. A dormant company with no revenue faces the same figure as a trading one.
- It applies per year. An owner who did not know about the requirement for four years is not facing one penalty.
- The obligation exists regardless of whether you owed any tax.
Penalty amounts change, so verify the current figure on IRS.gov rather than relying on this or any other article. What does not change is the shape of the risk: this is a compliance penalty, not a tax bill, and being unprofitable is no protection.
Reasonable cause relief exists, and first-time abatement may be available in some circumstances, but neither is automatic and neither is something to plan around.
Mistakes that cause most of the trouble
- Assuming a dormant company files nothing. This is the single most common and most expensive error. Formation alone usually triggers the first filing.
- Assuming your formation agent handles it. Registered agent services provide an address and forward mail. They are generally not filing your federal returns. Check your contract rather than assuming.
- Confusing state and federal obligations. Your annual report and franchise tax to Delaware or Wyoming are state matters and entirely separate from anything the IRS requires. Doing one does not cover the other.
- Leaving the EIN application to the last month. Without an SSN or ITIN the process is slower, and it blocks the filing entirely.
- Missing the personal return. If the business generated income effectively connected with a US trade or business, you may have an individual obligation on Form 1040-NR as well as the entity filings.
- Using a general accountant with no cross-border experience. This area is specialised. A capable domestic accountant may simply not know the 5472 requirement applies to your structure.
A realistic sequence for a first filing
- Confirm your entity's tax classification.
- Obtain an EIN if you do not have one, allowing generous time.
- Reconstruct the year's transactions between you and the company, including capital contributions.
- Engage a CPA or enrolled agent with foreign-owned entity experience, and say explicitly that you are a non-resident owner of a US entity — that phrase gets you routed correctly.
- File the pro forma 1120 with Form 5472 attached, by the deadline or with Form 7004 filed in time.
- Keep the supporting records for the statutory retention period.
If you have already missed filings
Do not simply start filing for the current year and hope the earlier ones go unnoticed. The gap is visible, and the position is generally better if you approach it deliberately.
Take advice from a cross-border tax professional about the available routes. Depending on facts, options may include filing delinquent information returns with a reasonable cause statement. What matters is that this is a decision to take with professional advice on your specific history, not one to make from an article.
The bottom line
Owning a US company from abroad is not complicated to do, but it comes with an information-reporting duty most owners are not warned about at formation. Form 5472 applies to dormant companies, applies per year, and carries a flat penalty that dwarfs the cost of compliance.
The whole obligation is usually a modest annual accounting fee. The cost of not knowing about it is not.
This guide is general information, not tax advice. Filing requirements, deadlines and penalty amounts change and depend on facts specific to your entity and circumstances. Verify current requirements on IRS.gov and take advice from a qualified CPA, enrolled agent or tax attorney experienced with foreign-owned US entities before filing.