Tax
Form 5472 for a Foreign-Owned U.S. LLC or Corporation
A U.S. company that is 25% or more owned from abroad, including a single-member LLC owned by an Indian individual or company, files Form 5472 every year. What counts as a reportable transaction, the pro forma Form 1120, the $25,000 penalty, and the state and owner-level filings that come with it.
1 / 5
Who Files
- A U.S. corporation that is 25% or more owned, directly or indirectly, by a foreign person or company, and that had any reportable transaction with that owner or a related party during the year.
- A U.S. single-member LLC owned by a foreign person or company. Since 2017 such an LLC is treated as a domestic corporation for this purpose and files Form 5472 even though it is disregarded for income tax.
- Typical fact patterns: an Indian software company that opened a U.S. LLC to bill American clients; an NRI parent in India who owns a U.S. rental property through an LLC; an Indian family business that holds a U.S. distribution subsidiary.
- Attribution rules count shares owned by family members and related companies, so a 20% direct stake can become 25% once a spouse's or parent's shares are added.
- A foreign-owned U.S. partnership does not file Form 5472; it has its own reporting on Form 1065 and Schedules K-2 and K-3, and foreign partners get Forms 8805.
Use ← → keys or swipe on mobile
Educational content, not tax, legal, or accounting advice. Confirm with a CPA before acting.
Frequently asked questions
Does my Indian-owned U.S. LLC need to file Form 5472?
Yes, if it is a single-member LLC owned by a foreign person or company and had any reportable transaction during the year, which includes the owner's capital contributions and loans. The form is attached to a pro forma Form 1120 and filed by April 15 for calendar-year entities, with an extension to October 15 if Form 7004 is filed on time. The penalty for missing it is $25,000 per form per year.
What counts as a reportable transaction for a disregarded LLC?
More than you would expect. Sales, purchases, services, rent, royalties, and interest between the LLC and its foreign owner or related parties all count, and for a disregarded LLC so do capital contributions, distributions, loans in either direction, and expenses the owner paid on the LLC's behalf. An LLC that only received its initial funding still files.
What is the difference between Form 5472 and Form 5471?
Direction of ownership. Form 5472 is filed by a U.S. company that is 25% or more foreign-owned, reporting transactions with its foreign owner. Form 5471 is filed by a U.S. person who owns or controls a foreign company, reporting that company's finances. An Indian group with a U.S. subsidiary files 5472 in the U.S.; an American who owns an Indian private limited company files 5471. Groups structured both ways file both.
We never filed Form 5472 for the last three years. What is the exposure?
$25,000 per form per year on paper, and the statute of limitations on those returns is still open. In practice, a non-willful filer who comes forward with the late forms and a specific reasonable-cause statement under the delinquent international information return procedures often has the penalties abated. The statement should explain who advised the company, what was asked, and when the requirement was discovered, and it should be filed before the IRS sends a notice.
Does the Indian owner also have to file a U.S. tax return?
It depends on what the LLC does. If the LLC earns income effectively connected with a U.S. trade or business, the individual owner files Form 1040-NR and a corporate owner files Form 1120-F, with Form 8833 where the India-U.S. treaty limits U.S. tax. If the LLC only holds an asset or has no U.S. effectively connected income, Form 5472 with the pro forma Form 1120 may be the only federal filing. The state the LLC is registered in will have its own annual filing and minimum tax regardless.
You might also like
Accounting
Accrual Accounting: When to Switch From Cash Basis
Cash basis is simple but lies about timing. When accrual accounting is required, when it is simply the smarter call, and exactly how the switch works.
Fractional CFO
When Does a Small Business Need a Fractional CFO?
Bookkeepers record. Accountants close and report. CPAs file. None of them help you make the next decision. That's what a CFO does.
Accounting
Month-End Close Checklist for Small Businesses
A repeatable monthly close cadence, what to reconcile, what to accrue, and how to know your books are actually done.
Educational content, not tax, legal, investment, or accounting advice. See our Terms.
Want a CPA to own your filings?
Federal, state, and local returns prepared and reviewed by a licensed CPA, with the planning done before year-end rather than after it.