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  Incorporating an LLC in the United States gives you flexibility and protection, but additional rules apply when the owner is foreign. Whether you have a single-member LLC owned by a foreign corporation with a child company or a single-member LLC owned by a foreign individual, you must know your reporting and tax obligations.  If not, you stand to pay enormous penalties or suffer issues with compliance. This article will walk you through the basics of foreign-owned LLC reporting and taxes so that you may remain in the loop.  What Makes Foreign-Owned LLCs Different While a foreign-owned LLC maintains certain operations of a domestic LLC, more stringent reporting requirements and tax obligations, unlike in a domestic LLC, are imposed therein.  Some factors to look into include: The single-member LLC owned by a foreign corporation, except to the extent the disregarded entity elects to be taxed as a corporation.  An LLC must file Form 5472 to inform the IRS of tra...

  Starting or managing an LLC can be a smart business in the United States. But what happens when a foreign entity owns such an LLC? LLC owned by a foreign company, foreign corporations, or foreign persons owning any LLC, it is important to know the rules as well as the tax implications.  Many foreign investors consider an LLC an apt and useful organizational structure, but certain factors differ. The article briefly discusses what is important to know about setting one's foot in this complex but rewarding terrain. Why Foreign Ownership of an LLC Matters An LLC owned by a foreign company provides the classic position advantages of limited liability, pass-through taxation, operational flexibility, and so on. The fact that there is foreign ownership imposes additional compliance requirements on the LLC, together with tax reporting responsibilities.  Some of the key considerations include: Ownership and management legal structure Reporting requirements to the IRS and state a...