The tax guide for foreign-owned U.S. LLCs

1. The LLC's tax structure: a "pass-through" entity

A single-member LLC is treated by default as a "disregarded entity" for U.S. tax purposes — it is not taxed separately from its owner. The company itself pays no corporate tax; tax outcomes are evaluated at the owner level. When the owner is a non-resident, the key question becomes: is the income U.S.-sourced, and is the company actually engaged in a U.S. trade or business (ETBUS)?

2. ETBUS: engaged in a U.S. trade or business

ETBUS (Engaged in a Trade or Business in the US) is the IRS's answer to the question "is this company actually doing business inside the U.S.?" As a general framework, your company is not ETBUS if:

• You have no employees in the U.S.,
• You have no fixed place of business in the U.S., such as an office or warehouse (a registered agent address does not count),
• You have no dependent agent working for you in the U.S.

Most LLCs managed from abroad that sell services or digital products fall outside this scope and therefore pay no U.S. federal income tax. Models that hold inventory in the U.S. — such as Amazon FBA — are more complex and require expert analysis.

3. Filing is mandatory even when no tax is due: Form 5472 + 1120

Foreign-owned single-member LLCs must submit Form 5472 (the foreign-ownership information return) with a pro-forma Form 1120 cover page to the IRS every year — even when no income tax is owed. It is an information return that creates no tax liability, but failing to file triggers penalties starting at $25,000. The deadline is generally April 15.

4. Wyoming state taxes

• State income tax: none. Wyoming is one of the few states with no personal or corporate income tax.
• Annual license tax: calculated on your assets located in Wyoming; most companies with no in-state assets pay the minimum of $62 (with the annual report).
• Sales tax: relevant only if you sell physical products into specific U.S. states and establish "nexus" there. It rarely applies to exported digital services.

5. Your home country: resident taxation

If you are a tax resident of your home country, you generally remain obligated to declare your worldwide income there. Depending on your structure, LLC earnings may be treated as business income or dividend-like income under local law.

Double-taxation treaties — including the U.S.–Türkiye treaty — prevent the same income from being fully taxed in both countries; tax paid in one country can typically be credited in the other. Work with a qualified local tax advisor on this — we refer our clients to experienced partners.

6. The annual compliance calendar

Your dashboard tracks these dates automatically and reminds you by email before every deadline.

7. Common mistakes

1. Skipping Form 5472. The "no tax due, so no filing needed" fallacy is the most expensive mistake ($25,000+ penalty).
2. Mixing personal and company money. The LLC's limited liability protection depends on keeping accounts separate.
3. Forgetting the annual report. The company first loses good standing, then its legal existence.
4. Neglecting home-country filings. Foreign company income cannot be left out of your resident tax return.