Foreign-Owned U.S. LLCs and Form 5472: What Foreign Owners and Foreign Trusts Should Know
A U.S. limited liability company is simple to form, and that simplicity leads many foreign owners to overlook the U.S. filings that follow. Hannah Nelson of USTAXFS makes the point well in a recent article for GGI Global Alliance, “US LLCs and foreign owners: What international entrepreneurs need to know” (September 15, 2026). We recommend reading the full article. A short summary and our own comments follow.
The Article in Brief
Ms. Nelson explains that a U.S. LLC with a single foreign owner may have an annual U.S. filing requirement, Form 5472 with Form 1120, even where the LLC earns no U.S. income and holds only non-U.S. assets. The penalty for a missed filing starts at $25,000. She also notes that the owner’s home country may not classify the LLC as the United States does, and that state charges continue each year regardless of activity; Delaware’s annual LLC tax, for example, has risen to $400.
Our Perspective
Milan Solarz-Patel, J.D., LL.M. (Taxation), of Auric Private Client Advisory LLC adds two points from practice.
1. Ordinary Transactions Trigger the Filing
The mechanics are set out in the IRS Instructions for Form 5472. Four of them surprise foreign owners:
Funding counts. The money that the owner contributes to open the LLC’s bank account is a reportable transaction, and so is any later distribution to the owner. An LLC with no sales can therefore have a filing requirement in its first year.
The return is filed on paper. The LLC files a pro forma Form 1120, with only identifying information completed, and attaches Form 5472. The return is faxed or mailed to a dedicated IRS address and cannot be filed electronically. For a calendar-year LLC the return is generally due April 15, and Form 7004 extends the due date.
The LLC needs an EIN. A foreign owner without a U.S. Social Security number or ITIN generally cannot use the IRS online application and applies on Form SS-4 by telephone, fax, or mail. Allow time for this step before the first due date.
Records matter. The same $25,000 penalty applies to a failure to keep the records that support the form. A further $25,000 applies for each 30-day period during which a failure continues more than 90 days after an IRS notice.
2. When the Owner Is a Foreign Trust
The foreign owner is not always an individual or a company. A foreign trust is a foreign person for this purpose, and a U.S. LLC wholly owned by a foreign trust falls under the same rule. Where that trust has a U.S. grantor or U.S. beneficiaries, Form 5472 is only one of several filings. Form 3520-A, Form 3520, and the U.S. person’s own income tax return may also be required, and the forms must agree with one another. Form 5472 is easy to miss in these structures because attention goes to the trust returns.
For the reverse case, a U.S. person with foreign accounts, trusts, or companies, see our earlier post on the U.S. reporting behind a Plan B.
The Takeaway
Decide who will prepare Form 5472 before the LLC is formed, not after the first due date has passed. The cost of the annual filing is modest. The penalty for missing it is not.
If you are a foreign owner of a U.S. LLC, or a trustee or advisor to a foreign trust that holds one, see our services or contact Auric Private Client Advisory LLC to review the U.S. reporting.
Source and credit: Hannah Nelson, USTAXFS, “US LLCs and foreign owners: What international entrepreneurs need to know,” GGI Global Alliance, September 15, 2026. This post summarizes and comments on Ms. Nelson’s article. The comments are those of Auric Private Client Advisory LLC.
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