Tax obligations of a Foreign Owned LLC: practical guide

Does your LLC pay U.S. taxes?

This is our most frequently asked question. Short answer: a single-member Foreign Owned LLC operating exclusively outside the U.S. generally has no federal tax obligation. But it does have reporting obligations.

Mandatory annual forms

Form 1120 (Corporate Tax Return)

Even if your LLC owes no taxes, you must file the corporate return informing the IRS about your company's activity.

Form 5472 (Related Party Transactions)

Any transactions between your LLC and you as owner must be documented. The penalty for non-filing is $25,000 per form per year.

BOIR Report

Since 2024, all U.S. companies must report beneficial owners to FinCEN within 90 days of formation.

Annual maintenance costs

Typical annual costs include forms filing (~$300), registered agent renewal (~$100-150), postal address (~$100-150), and state annual report if applicable.

At Arbi Capital, we offer an annual maintenance service covering all these obligations.