I just set up a company abroad — do I file Form 926?
Probably, if you put anything into it. Capitalising a foreign company you have just formed is a transfer of property to that company, and it is reported by the person who made the transfer. People miss it because the act feels administrative rather than transactional: you open the company, you fund it, you get on with trading. A reporting level applies, so not every small contribution is caught, but the test looks at the value you transferred rather than at what the company later did with it. The obligation sits on facts, not on tax owing, so a company that lost money in its first year does not remove it. Establish the date and value of each contribution early, while the bank records are still easy to obtain.
Does wiring money into my own foreign company count as a transfer?
Yes, cash is property for this purpose. A wire to the company's own account in exchange for its shares, or as a further contribution to a company you already own, is the commonest reportable transfer there is. What it is not, necessarily, is a loan: money advanced on genuine loan terms is a different transaction with different reporting, and the paperwork made at the time decides which one you have. That distinction is worth getting right on the day rather than reconstructing later from a bank statement that records only an amount. If you have funded the company in several tranches, each one needs pinning to a date and a value.
Do I file Form 926 if I contributed shares instead of cash?
Yes. Shares are property, and contributing shares in one company to a foreign company is a transfer within these rules. It is also where the harder questions start, because the value of what you handed over has to be established rather than assumed, and the penalty on this form is computed as a percentage of the value transferred. That makes valuation part of the compliance work and not an afterthought. Where the shares are in a private company, expect the file to need a supportable basis for the figure used, prepared as at the date of the transfer and kept with the form.
Does transferring software or a brand to my foreign company count?
Intangibles are named among the things this form reports, so software, a brand, customer lists or the rights to them can all be reportable when they are contributed to a foreign corporation. Founders are the group most exposed, because the transfer often happens informally: development simply continues in the new country and, in substance, the asset has moved. The questions to settle are what was transferred, when, at what value, and whether anything was received in exchange. Reconstructing that after a funding round, when someone else is asking the same questions, is considerably more work than documenting it at the time.
My spouse and I both funded the company — who files Form 926?
Each transferor reports their own transfer. The obligation attaches to the person who parted with the property, so where two people fund a company from separate resources there are two reporting positions to consider rather than one joint one. Where the money came from a jointly held account, the underlying ownership of the funds rather than the name on the account drives the analysis. This matters because the reporting is assessed transferor by transferor. Settle who is treated as contributing what before the funds move; afterwards it becomes an evidence exercise built on statements that were never designed to answer the question.
Do I file Form 926 if the company made no profit?
Yes, if a reportable transfer happened. This is one of the quietest filings in the international set precisely because nothing about the company's results points at it: the reporting is triggered by what you put in, not by what came out. A dormant company you funded at formation can carry a reporting obligation, while a profitable one you never capitalised may not. Since the penalty is computed as a percentage of the value transferred rather than as a share of tax owing, the absence of profit removes neither the requirement nor the exposure. Treat the funding of any foreign company as a reportable event until the facts show otherwise.
How is a US LLC taxed for a Canadian owner?
This is the classic hybrid mismatch. The United States generally treats a single-member LLC as transparent and taxes the member on the profit as it arises. Canada treats the LLC as a corporation and taxes the member on distributions. So the two countries tax different amounts in different years, and the foreign tax credit — which needs the same income taxed by both in the same year — often cannot bridge it. The treaty relief for hybrids is narrow. See why a Canadian should rarely own an LLC.
What is GILTI?
A US rule that taxes shareholders of controlled foreign corporations currently on the corporation's income above a routine return on its tangible assets, rather than waiting for a dividend. The target was profit — especially from intangibles — parked in low-tax jurisdictions. The name, the deduction and the asset-based reduction are the parts Congress has revisited, so we compute it from the rules in force for the filing year instead of a remembered percentage. See the GILTI inclusion and Form 8992.
