Foreign-Owned U.S. DE

Foreign-owned U.S. DE stands for foreign-owned United States disregarded entity. It describes a US company, almost always a single-member LLC, that is ignored for income tax purposes and whose one owner is a foreign individual or foreign company. If you live outside the US, hold no green card, and own a Delaware or Wyoming LLC by yourself, your company is a foreign-owned U.S. DE.

This label carries a specific filing duty. Since the 2017 tax year, the IRS has treated foreign-owned U.S. DEs as corporations solely for Form 5472 reporting. That means the LLC must get an EIN, keep records of dealings with its owner, and file Form 5472 attached to a pro forma Form 1120 each year it has reportable transactions with the owner or other related parties.

The phrase itself appears on the paperwork. You write Foreign-owned U.S. DE across the top of the pro forma 1120 so the IRS processing center knows the return is informational. The package is due April 15 for a calendar-year LLC and must be faxed or mailed to the IRS in Ogden, Utah. Form 7004 can extend the deadline by six months.

The stakes are high for such a quiet requirement. An owner in Brazil who formed an LLC, deposited $1,000, and made no sales still has a reportable capital contribution and must file. Missing the filing, even for a dormant company, risks a $25,000 penalty. If the LLC ever takes on a second member, it stops being a disregarded entity and switches to filing Form 1065 with K-1s, due March 15.