A US LLC with one foreign owner files IRS forms even if it owes no tax

A limited liability company (LLC) that a Vietnamese individual forms in Delaware pays the state US$400 a year; in Wyoming its annual-report charge starts at US$60. Owning it alone also brings a federal filing that does not depend on profit.

In any year the LLC has a reportable transaction with its owner or another related party, money paid in or taken out included, it must send the Internal Revenue Service (IRS) Form 5472, even when it owes no US tax.

The number of members sets the default

“By default, a domestic LLC with only one member is disregarded as an entity separate from its owner,” the IRS says in its Form SS-4 instructions, and one with two or more members is treated as a partnership, as the Treasury’s entity-classification regulation provides.

This means the default turns on the number of members, not on their nationality: an LLC owned by one Vietnamese individual is disregarded, and one with two or more is a partnership. Either may instead elect corporate treatment on Form 8832.

A return when no tax is due

For tax years beginning after 31 December 2016 and ending on or after 13 December 2017, a US disregarded entity wholly owned by one foreign person is treated as a corporation for one purpose only: section 6038A of the Internal Revenue Code, the reporting rule for US corporations at least 25% foreign-owned.

Under the Form 5472 instructions, such an LLC “has no income tax return filing requirement” yet must file a pro forma Form 1120, the corporate income tax return, with Form 5472 attached; only its name, address and two items on the first page are completed. The regulation says the information “must be furnished even though it may not affect the amount of any tax due”.

The duty arises in a tax year in which the LLC had a reportable transaction with a related party. For a foreign-owned LLC, these include amounts paid or received in connection with its formation, dissolution, acquisition and disposition, “including contributions to, and distributions from, the entity”. Several general exceptions from filing are expressly withheld from these LLCs.

The forms cannot be filed electronically; they go by fax or by mail to a dedicated IRS address.

The LLC uses its owner’s US tax year or, if the owner has none, the calendar year. For an owner with no US filing year, the return is therefore due on 15 April of the following year, the date for a calendar-year corporation, unless extended on Form 7004.

US$25,000 for a missed form

The instructions set a penalty of US$25,000 on a reporting corporation that fails to file Form 5472 when due and in the manner prescribed, or to keep the required records, and treat a substantially incomplete form as one not filed.

If the failure continues for more than 90 days after the IRS notifies the corporation, a further US$25,000 applies, for each related party concerned, for each 30-day period or part of one that it continues. The amounts come from section 6038A(d), which a 2017 law raised from US$10,000; the section was read in the 2024 edition of the US Code.

When US income tax arises

The IRS says the activities of a disregarded single-member LLC “should be reflected on its owner’s federal tax return”. This article assumes an owner who is a nonresident alien for US tax purposes.

Under IRS Publication 519, such a person’s income effectively connected with a US trade or business is taxed, after allowable deductions, at the graduated rates that apply to US citizens and residents, and is reported on Form 1040-NR.

A nonresident engaged in a US trade or business must file that form even with no US-source income. “Income that is not effectively connected is taxed at a flat 30% (or lower treaty) rate.”

The IRS says a foreign person whose only US business activity is trading stocks, securities or commodities through a US resident broker is not engaged in a US trade or business.

For income such as dividends paid to a disregarded LLC, Publication 515 treats the foreign owner as the payee, and the payer withholds 30% of the gross amount unless documentation supports a reduced rate. The IRS list of income tax treaties has no entry for Vietnam. No treaty rate therefore reduces that 30% for an owner resident in Vietnam.

An LLC with two or more members that has not elected corporate treatment files a partnership return, Form 1065, unless it has neither income nor deductible expenditure. A foreign member of a partnership engaged in a US trade or business is itself treated as so engaged.

The partnership pays a withholding tax on the effectively connected taxable income allocable to its foreign partners, currently 37% for non-corporate partners such as individuals, reports it on Form 8804 and gives each foreign partner a Form 8805 even if no such tax was paid.

An EIN without a US address

A disregarded LLC wholly owned by a foreign person needs its own employer identification number (EIN). The IRS’s general page on single-member LLCs says most new ones will need one, though one with no employees and no excise tax does not; the SS-4 instructions address the foreign-owned case, requiring such an LLC to use its own name and EIN to file Form 5472.

An applicant with no legal residence, principal place of business or office in the United States cannot use the online application; the instructions provide telephone, for international applicants only, fax and mail instead.

The form accepts “foreign” where the responsible party has no US Social Security or individual taxpayer identification number and cannot obtain one, and the IRS says: “You never have to pay a fee for an EIN.”

No beneficial-ownership report

The beneficial-ownership report under the Corporate Transparency Act no longer applies to an LLC formed in a US state. FinCEN, the US Treasury’s Financial Crimes Enforcement Network, removed the requirement for US companies by an interim rule effective 26 March 2025, and a final rule adopting it with limited changes took effect on 14 August 2026.

Under the current regulation, a reporting company must be formed under the law of a foreign country, and an entity created by filing a document with a US state’s secretary of state is an exempt “domestic entity”.

Some commenters urged Treasury to keep reporting at least for foreign-owned domestic entities; the final rule replied that a focus on foreign legal entities is the proper focus of the collection.

This means a Delaware or Wyoming LLC owned by a Vietnamese individual files no beneficial-ownership report: the test is where the company was created, not who owns it. FinCEN’s beneficial ownership information (BOI) page says older guidance on its site that US companies must report “should be disregarded”.

State charges, and an agent in the state

House Bill 400, approved on 21 May 2026, replaced US$300 with US$400 in section 18-1107 of the Delaware Code with effect from 1 January 2026. It was not established which payment first carried the new figure. The Division of Corporations’ instructions state US$400 and require no annual report.

Wyoming charges US$100 to file Articles of Organization under a fee schedule effective 1 July 2026.

The Vietnamese side

The Investment Law 143/2025/QH15 counts as outward investment both establishing an economic organisation under the host country’s law and contributing capital to a foreign organisation to take part in managing it.

Decree 103/2026/NĐ-CP admits individuals of Vietnamese nationality as outward investors, other than those barred by Article 17(2) of the Law on Enterprises. This indicates that, for an owner in Vietnam, the LLC is also an outward investment.

From VND 7 billion, or in a conditional sector, the project needs an outward investment registration certificate from Vietnam’s Ministry of Finance. Below VND 7 billion and outside the conditional sectors, the investor registers the foreign-exchange transaction instead.

Every transfer out and back must pass through a dedicated investment capital account, and profits must come home within 12 months of distribution unless retained under the Decree to complete or increase the capital or to start a new project abroad.

This means the same money is recorded twice: as outward capital through the Vietnamese account and as a contribution on Form 5472. How the evidence chain for cross-border capital transfers works is set out in an earlier article, and the individual’s outward-investment route will be covered in a separate one.

What this article has not established

The article assumes an owner who is a nonresident alien for US tax purposes.

It was not established whether Delaware billed the payment due on 1 June 2026 at US$300 or US$400, what Delaware charges to form an LLC, or what registered agents charge.

Section 6038A was read in the 2024 edition of the US Code because the House of Representatives’ online code was unavailable; later amendments were not confirmed, though the IRS instructions revised in December 2024 still state US$25,000. From which tax year that figure applies, and whether penalty relief is available, were not established.

The absence of a US–Vietnam treaty rests on the IRS list alone. No US source read says how the rules apply to an LLC that only holds investments; that depends on the facts.

The effects of a corporate election, other federal returns of a multi-member LLC with foreign members, and state taxes outside the home state were not researched.

On the Vietnamese side, whether a US LLC is an “economic organisation” under the Investment Law is a reading, and amendments to Decree 103 after 3 April 2026 were not re-checked.

How Vietnam taxes the LLC’s profits in a resident owner’s hands was not researched; how Vietnamese tax residence is decided is explained in a separate article.