Since January 2017 (Treasury Regulation §1.6038A-1(c)(1)), every foreign-owned single-member US LLC is treated as a "domestic corporation" solely for Form 5472 reporting purposes. This is the single most important rule for non-US persons owning US LLCs, and the one most commonly missed.
Who Exactly Is Affected
You owe Form 5472 if all four apply:
- You have a US LLC (or corporation)
- 25%+ of the LLC is owned by a non-US person (individual, entity, partnership, trust)
- The LLC had any "reportable transaction" during the tax year
- The LLC is a "disregarded entity" for US tax purposes (default for single-member LLCs)
"Reportable Transaction" — Very Broad Definition
The IRS defines reportable transactions extremely broadly. Any of these counts:
- Initial funding of LLC bank account (yes, even $100 opening deposit)
- Distributions from LLC to owner
- Loans in either direction (LLC to owner, or owner to LLC)
- Service fees paid to or by the owner
- Rent (owner-provided office space, even virtual)
- Interest on inter-company loans
- Sale or purchase of any asset between LLC and owner
- Payment of state filing fees from owner's personal account
Practical implication: essentially every foreign-owned single-member LLC has reportable transactions in its first year.
Filing Mechanics
- Get EIN — required before filing. Form SS-4 by fax to +1-855-215-1627 for non-residents. Free. 4-6 weeks.
- Prepare pro-forma Form 1120 — cover sheet. Page 1 only, identifying info, "Foreign-owned U.S. DE" checked in Item G. Leave income/deductions blank.
- Complete Form 5472 — Parts I (identifying), II (foreign related party), IV (reportable transactions listed by category). One form per foreign related party.
- Attach Form 5472 to Form 1120 — do not file separately.
- Mail or fax to Ogden, UT service center. E-filing not supported.
Deadline
April 15 of the year after the tax year (for calendar-year LLCs). File Form 7004 by April 15 for automatic 6-month extension to October 15.
Penalty
$25,000 per unfiled form per year. Applies even to zero-revenue LLCs. See our penalty detail page.
Who Does Not Owe
- US-owned LLCs (all members are US persons)
- Multi-member LLCs where each non-US owner holds < 25%
- LLCs that filed Form 8832 electing corporate treatment and file full Form 1120 with financials (different Form 5472 mechanics apply)
- LLCs with zero reportable transactions in the year (rare — even bank fees count)