Form 5472 for LLCs Owned by Foreign Corporations
When your US LLC is owned by a foreign corporation (rather than an individual), additional reporting requirements and considerations apply.
Corporate Ownership Structure
A common structure for international businesses involves a foreign corporation owning a US LLC. This arrangement is often used for:
- Holding US business operations under a foreign parent company
- US subsidiary for sales, services, or operations
- US real estate or intellectual property holdings
- Joint venture structures with foreign corporate partners
Additional Reporting Requirements
When the foreign owner is a corporation, Form 5472 requires additional information beyond what's needed for individual owners:
Part II: Foreign Corporation Information
- Legal name of the foreign corporation
- Country of incorporation
- Principal business activity
- Foreign taxpayer identification number
Part III: Ultimate Beneficial Owner
- Information about individuals who ultimately own the foreign corporation
- Ownership chain details may be required
Intercompany Transactions
Corporate-owned LLCs often have more complex transactions with their foreign parent. These must all be reported:
Common Transactions
- • Management fees
- • Service agreements
- • Licensing payments
- • Intercompany loans
- • Cost allocations
Transfer Pricing
- • Arm's length pricing required
- • Documentation recommended
- • Section 482 compliance
- • May require professional advice
Transfer Pricing Considerations
Transactions between your US LLC and foreign parent company must be at arm's length (fair market value). The IRS scrutinizes related-party transactions, and transfer pricing penalties can apply in addition to Form 5472 penalties. Consider consulting a tax professional for complex intercompany arrangements.
Frequently Asked Questions
Does a foreign corporation owning a US LLC need to file Form 5472?
Yes. When a foreign corporation owns a single-member US LLC, the LLC must file Form 5472 reporting all transactions with the foreign corporate owner.
What additional information is required for corporate owners?
The form requires details about the foreign corporation including its name, country of incorporation, principal business activity, and any foreign identifying numbers.
Do management fees count as reportable transactions?
Yes. Management fees, service fees, licensing payments, and any other payments between the LLC and its foreign corporate owner are reportable transactions.
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