With the entity, not the income. Before any figure is useful you need to know what the company is treated as for US purposes, because a corporation, a partnership and a disregarded entity produce different reporting and different timing on the very same profit. That conclusion comes out of the constitutional documents, the ownership register and the liability position of the owners. Everything else follows from it: the reporting package, whether profits are taxed to you as they arise, whether foreign tax can be credited. Starting with last year's profit and working backwards is how owners end up filing on the wrong basis.
US person with a foreign business — where do I start?
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Classification comes first: whether the entity is a corporation, a partnership or disregarded for US purposes changes which forms apply and whether the profits are taxed currently. Almost every one of these files is decided by a date and a document, so the sequence is the work.
Where to start
Classification comes first: whether the entity is a corporation, a partnership or disregarded for US purposes changes which forms apply and whether the profits are taxed currently. An election made on time can align the two countries; the same election made late leaves credits stranded.

The case that is treated differently
The company you incorporated in the country you moved to is, to the IRS, a foreign corporation with a US shareholder — with a reporting package attached and rules that can tax its profits before you take them out.
How to get this moving
The full treatment — who it binds, the deadline, the penalty and the fixed fee — is on US person with a foreign business. One call now is worth more than a filing season of guessing.
Reviewed for accuracy for the 2025 and 2026 filing seasons by Udit Gupta, International Tax, Cross-Border Tax & Transfer Pricing Expert, Legal Quotient Consultants. General information, not advice for your circumstances — call our 24-hour helpline to discuss your own position.
Files that look like this one
Reading the constitution before reaching any conclusion
A client wanted to know which forms applied. We asked instead for the company's constitutional documents and its ownership register, because the answer to the forms question is downstream of them. The documents showed a liability position that produced a different classification from the one assumed, which changed both the reporting and whether the profits were taxed to the owner as they arose. The engagement produced a classification memorandum citing the specific provisions relied on, and a filing plan that followed from it rather than from the client's expectation.
Read how this one runsFixing the years at issue for a long-standing company
A business had been running for many years with nothing reported on the US side. We began with the ownership register to establish when the client's interest first reached a reportable level, then built a year-by-year schedule of what a filing would have contained. Several of the earliest years produced no US tax once the credits were properly constructed. The engagement produced that schedule, a recommendation on the route for bringing the years in, and a decision taken with the size of the exposure known rather than feared.
Read how this one runsShaping a year before it closed rather than reporting it after
An owner came to us in mid-year, which made the work planning rather than compliance. We set out how each way of drawing money from the company would be treated on both sides, and which decisions had to be taken before the year end to be effective at all. The engagement produced a written plan for the remainder of the year, the classification position confirmed in advance, and instructions the company's own bookkeeper could follow, so the next year's reporting described a set of transactions that had been chosen deliberately.
Read how this one runsPricing the cost of closing against the cost of staying
A client with a small consulting company abroad wanted to wind it up and bill clients in their own name instead. We priced both paths: the tax the wind-up would trigger in each country, the treatment of the assets coming out, and the ongoing reporting the company would otherwise carry. We also collected the non-tax reasons the company existed, which included a licence that could not be transferred. The engagement produced a side-by-side comparison of keeping and closing, and the client's decision recorded with the reasons behind it.
Read how this one runsStarting from a local accountant's file rather than the client's memory
The owner's recollection of how the company had been set up did not match its documents. We worked from the file held by the company's own accountant: the filings made locally, the assessments issued, and the entries recording loans between owner and company. Two of those loans had never been treated as anything in particular. The engagement produced a reconciled history of the owner's dealings with the company, the classification conclusion that history supported, and a list of the items still needing a position taken on them.
Read how this one runsA second shareholder discovered in the ownership register
A client believed they owned the company outright. The register showed a family member holding a minority interest, recorded years earlier for a reason nobody could now explain. Because ownership levels determine what reporting applies and whose income the profits are, the discovery changed the starting point entirely. The engagement produced a corrected ownership history, the client's reporting position based on their actual interest, and a note of the questions the other shareholder's own position raises, which were for that person's adviser rather than ours.
Read how this one runsA US LLC Owned by a Canadian, Taxed Twice by Design
The two countries classify an LLC differently, so the credit relief that ought to apply frequently does not. The engagement looks at whether the structure can be changed, and where it cannot, at how to make the credit work.
Read how this one runsA Shareholder Loan Across a Border at No Interest
An interest-free loan between related companies is priced as if it carried interest, and in some cases a deemed benefit follows as well. The file sets a rate against the borrower's own credit profile and documents the terms that support it.
Read how this one runsAll case studies — every published engagement in one place.
Core International & Cross-Border Tax Services
Strategy and compliance for income, assets and families spread across borders.
Industries & Client Types We Serve Worldwide
- Foreign VAT / GST / sales tax registrations
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Software revenue crosses borders by default — sourcing rules, withholding on licence-like payments and IP location decide the effective rate.
Software revenue is rarely taxed where the team sits. Licence, subscription and service income are characterised differently by each side, and the answer decides withholding at source, treaty relief and whether a foreign customer creates a taxable presence at all — questions that are cheap to settle before the contract and expensive afterwards.
- Cross-border revenue sourcing & withholding
- IP structuring with real substance
- Equity for cross-border teams
- U.S. expansion: entity & PE setup
- Reg 105 / 102 waivers
- Permanent establishment risk
- Partner mobility planning
- Cross-border withholding recovery
- Section 216 rental returns
- FIRPTA withholding recovery
- Section 116 clearance
- Treaty credit optimization
- Transfer pricing documentation (s.247)
- Customs value vs transfer price
- Foreign affiliate reporting (T1134)
- Country-by-country reporting
- Reg 105 & U.S. CWA agreements
- Multi-state & country calendars
- Touring income allocation
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- Residency analysis before moving
- Employer payroll exposure
- Totalization & social security
- Foreign tax credits
- Treaty access & PPT reviews
- FAPI & surplus computations
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- Governance & substance
More on US person with a foreign business
The incorporation documents and constitution, the ownership register with the date of every change, the statutory financial statements for the years in question, the company's own returns and assessments, and a list of every dealing between you and the company: salary, dividends, loans in either direction, rent, anything at all. Dates matter more than amounts at this stage, because classification and the timing rules both turn on when things happened. If the company has had other owners, or has changed its legal form, bring that history too. It often explains why the current treatment is not the obvious one.
Before, because the personal return depends on it. The company's classification decides what your return has to show and when, so a personal filing prepared first is a guess that may have to be corrected. Where time is short, the order that causes least damage is to establish the classification, file on that basis, and leave refinements for later. What does not work is filing the personal return on the assumption that nothing is reportable until money comes out, then discovering the company should have been in the return from the year it was incorporated.
Establish the years first. Work out from the ownership register when your interest reached the level that brings reporting, then identify for each year since whether a filing was required and what it would have shown. That schedule is the whole basis of what follows, including which route to use for bringing the years in. The other half is the tax, and often the company's profits produce little or no US tax once the credits are constructed properly, which changes what you are dealing with. Fix the years and the figures before choosing how to file them.
Often yes, and that is the main argument for starting early. An election about classification is time-sensitive, and how profits are taken out, whether as salary, dividend or loan repayment, is a decision made during the year rather than repaired afterwards. Once a year end has passed the facts are fixed and the work becomes reporting what happened. So the first conversation is worth having while there is still a year to shape: the same arrangement that is straightforward if settled in advance can be expensive to replicate once the transactions have gone through the books.
Sometimes, and it is a fair question to ask early rather than after years of reporting. But closing a company is itself a taxable event in its own country and usually on the US side as well, and the two may treat the wind-up differently, so the cost of leaving has to be set against the cost of staying. There are also non-tax reasons the company exists: contracts, licences, local clients. The right order is to price both paths, including the reporting each involves, before assuming the simpler structure is the cheaper one.
It depends on the country, and a day count is only ever the start. Many use a threshold in a tax year, some also look at averages across several years, and some have no day test at all and decide on where your home and life are. Two countries can both conclude you are resident, which is what the treaty tie-breaker exists to settle. Counting days without checking the tie-breaker is how people end up filing as resident nowhere. See the residency tie-breaker.
Yes, where they are authorised to represent you with that tax authority and the filing is done electronically. What matters is not where the adviser sits but whether they can lawfully act for you and are competent in both systems — a return prepared with no knowledge of the other country is where the relief gets missed. We file on both sides, from offices in India, the USA, Canada and the UAE. See how we work.



