What are the tax obligations of a Non-Resident Owner Of A US LLC?

Do I have to pay taxes in the United States if I use a non-resident US LLC company?

A US LLC owned by a single member, not a resident of the United States it is not treated by IRS. As long as you are not engaged in trade or business in the United States, your LLC does not pay taxes in the United States. This relates to Federal, State, Income and Sale tax. A limited liability company (LLC) is a popular choice of entity for conducting business or holding rental real estate in the United States. It is a business structure you can form in any one of the fifty states.

How do I know if I am engaged in a trade or business? 

Having an employee or an agent doing the work solely for you or any type of dependent agent in the United States will be considered a trade or business. Administrative tasks are not considered to be a part of the dependent agent scheme. If you just use service providers, your LLC company will not be taxed. The point is that you do not want to employ or have agents working exclusively for you in the US.

Which forms does a foreign-owned LLC have to do to file?

Although there are ways to really optimize your taxes in the United States there is still some mandatory paperwork to be done:

  • Get an Employer Identification Number (EIN, or federal tax number)
  •  File Form 5472 if there have been any “reportable transactions” during the previous tax year (Formation and dissolution filings are considered to be reportable transactions)
  •  File pro forma Form 1120
  •  Maintain books and records to support the claims you make on Form 5472

A US-based LLC can have great tax advantages, especially for foreign entrepreneurs abroad.