Does my US LLC have to file Form 5472 if it made no money?
Yes. A foreign-owned single-member LLC files even with no income and no activity, which is the commonest surprise in this area. The form reports dealings between the entity and its related foreign parties, and a year with nothing in it still has to be reported as a year with nothing in it. The practical consequence is that a company you stopped using but never dissolved carries an annual obligation for as long as it exists, with a penalty attached per form.
I am not a US person, does my single-member LLC still file?
That is precisely the case the rule is aimed at. Foreign-owned single-member US LLCs are within it, along with US corporations that have a foreign shareholder at the reporting ownership level. Your own residence and your own tax position are not the test; the entity's ownership is. Non-residents who set up an LLC to hold a bank account, take payments or buy a property are the group most often unaware of it, because nothing about opening the company suggests that an annual filing is coming.
My LLC is disregarded for tax, why does it file anything?
Because the two questions are unrelated. The entity is invisible for US income tax purposes, since its results belong to the owner, and highly visible for this form. Being disregarded is the reason for the filing rather than a defence against it: the form exists so that transactions between the entity and its foreign owner can be seen at all, which the income tax treatment on its own would not achieve. So a company that files no income tax return of its own still has an annual information filing.
What counts as a reportable transaction with my own LLC?
Dealings between the entity and its related foreign parties, and you as the foreign owner are one of them. In practice that means the movements owners tend to regard as internal: money put in, money taken out, amounts the owner pays on the entity's behalf and amounts the entity pays on theirs. They are transactions between two persons for this purpose even though only one bank balance feels like yours. Record them as they happen with a note of what each one was, because reconstructing them a year later from a statement is guesswork.
Does my US company with one foreign shareholder have to file?
It can, and the question is the level of that shareholding rather than the number of shareholders. US corporations with a foreign shareholder at the reporting ownership level are within the rule, and what the form then reports is the corporation's transactions with its related foreign parties, meaning the shareholder and the companies connected to them. Groups where one individual abroad owns both the US company and a supplier or service company overseas need the most care, because the related parties are more numerous than they look.
What is the penalty for not filing Form 5472 for a dormant LLC?
The exposure is attached per form, so a dormant LLC that has existed for several years without filing has an obligation for each of them rather than one overall failure. That is what makes a forgotten company expensive: the entity had no income, no activity and nothing to report, and the missing filings still accumulate year by year. It is also why dissolving an unused LLC properly matters, because while it exists the annual filing exists, whatever the entity is doing.
What is a permanent establishment, and how easily do we create one?
A taxable presence in another country under the treaty — typically a fixed place of business such as an office, branch, factory or workshop, or a dependent agent habitually concluding contracts on your behalf. Some treaties add a services test measured in days. Purely preparatory or auxiliary activity is excluded, but that carve-out is narrower than it sounds: one senior employee working from home in the other country, with authority, has been enough. See business profits and permanent establishment.
Which business structure has double taxation?
The corporation — specifically a US C corporation, where profit is taxed to the company and the dividend again to the shareholder. Sole proprietorships, partnerships and LLCs treated as flow-throughs are taxed once, in the owners' hands. Across borders that tidy answer breaks: an entity treated as a flow-through in one country can be opaque in the other, which produces a mismatch neither system planned for. See LLC against corporation for Canadians.
