Taxation of a US LLC owned from Europe | Speed LLC

The mistake that costs $25,000

This is the most widely misunderstood question in the whole subject. A single-member LLC owned by someone who is not a US resident is treated by the IRS as a disregarded entity: it is not taxed as a company. Many conclude from this that there is nothing to report.

That is wrong. This classification exempts you from corporate income tax, it does not exempt you from filing a return. A disregarded entity owned by a foreign person must file Form 5472 together with a Form 1120 return — and must do so even if the LLC carried out no transactions and opened no bank account.

The calendar to remember

In the year of formation, the first return covers the current financial year. An LLC formed in 2026 therefore files its first return in 2027, no later than 15 April, for the 2026 financial year.

And what about tax on profits?

A single-member LLC is not taxed at company level. Its result flows directly through to its member, who is taxed according to their personal status. For a member resident in a country with which the United States has signed a tax treaty — as is the case for France, Germany, Spain, Italy and Belgium — the position is clearly framed.

• Profits from an activity carried on from Europe are in principle not taxed in the United States, in the absence of a permanent establishment on US soil.
• Those same profits are taxable in your country of residence, according to your regime: sole trader, company, or otherwise.
• The tax treaty prevents double taxation by allocating the right to tax to one of the two states according to the nature of the income.
• If you pay yourself a salary or dividends, they are treated under separate rules that should be reviewed with a professional.

What no longer has to be reported

The beneficial ownership information report (BOI), imposed by FinCEN from 2024, was removed for US companies by a rule that came into force in March 2025. A US LLC therefore no longer has to file that report, even though the obligation was a source of considerable confusion for two years.

What New Mexico does not require

At state level, New Mexico is the lightest of the commonly used states: no annual report, no tax on turnover, no annual fee. This is a frequent reason for choosing it, and it has no effect on your federal obligations, which remain identical whichever state you choose.

Our formation guide sets out the procedure in detail, and our comparison between Wyoming, Delaware and New Mexico explains why the latter is most often chosen.

In summary

• A single-member LLC owned by a non-resident must file the 5472, even with no activity.
• The deadline is 15 April, extendable to 15 October on request.
• The penalty for omission is $25,000 per year.
• Profits are taxable in your country of residence, not in the United States in the absence of a permanent establishment.
• The BOI report is no longer required for US companies since March 2025.