Forming a US LLC is just the beginning. To keep your business in good standing and avoid costly penalties, you need to stay on top of annual compliance requirements.
The good news? Compliance for foreign-owned LLCs is relatively simple once you understand what's required.
Miss these deadlines, and you could face:
- $25,000+ IRS penalties
- State fines and late fees
- Administrative dissolution of your LLC
- Loss of limited liability protection
- Damage to your business reputation
This comprehensive guide covers everything you need to know about staying compliant.
š Table of Contents
Compliance Overview
As a foreign-owned US LLC, you have compliance obligations at two levels:
1. State-Level Compliance
- Annual or biennial reports
- Franchise taxes (varies by state)
- Registered agent maintenance
- Business licenses (if applicable)
2. Federal-Level Compliance
- Form 5472 (if foreign-owned)
- Pro forma Form 1120 (with Form 5472)
- EIN maintenance
- FBAR reporting (if applicable)
State-Level Requirements
Wyoming LLC Compliance
Wyoming Annual Requirements
Total Annual Cost: $110-185/year
Penalty for Late Filing: $50 + dissolution after 60 days
Delaware LLC Compliance
Delaware Annual Requirements
Total Annual Cost: $350-425/year
Penalty for Late Filing: $200 penalty + $1.5% monthly interest
Other Popular States
| State | Annual Fee | Deadline | Late Penalty |
|---|---|---|---|
| Wyoming | $60 | LLC anniversary month | $50 + dissolution |
| Delaware | $300 | June 1 | $200 + 1.5%/month |
| Nevada | $350 | LLC anniversary month | $75 + dissolution |
| New Mexico | $0 | No annual report | N/A |
| Florida | $138.75 | May 1 | $400 + dissolution |
Federal Tax Requirements
Form 5472: Information Return
Who Must File: All US LLCs with 25%+ foreign ownership
What It Is: An informational return reporting transactions between your LLC and foreign related parties (including yourself as the owner)
ā° Critical Deadline
Due Date: April 15 (or 15th day of 4th month after year-end)
Extension: File Form 7004 for automatic 6-month extension to October 15
Penalty for Not Filing: $25,000 per form + $25,000 per member
What Form 5472 Requires
You must report:
- All transactions with foreign related parties
- Your personal capital contributions
- Loans to/from the LLC
- Services provided or received
- Rent paid or received
- Any other financial transactions
$25,000 Penalty Warning
The IRS assesses a $25,000 penalty for each Form 5472 not filed, plus an additional $25,000 for each member. For a single-member LLC, that's $50,000 in penalties!
Even if your LLC had $0 income, you still must file Form 5472 if you're a foreign owner.
Form 1120: Pro Forma Corporate Return
When filing Form 5472, you must also file a pro forma Form 1120 (US Corporation Income Tax Return).
Key Points:
- File even if LLC has no income
- Check "pro forma" box at the top
- Attach Form 5472
- Same April 15 deadline
- No tax owed (LLCs are pass-through entities)
Additional Federal Requirements
Other Federal Compliance Items
Registered Agent Requirements
Every US LLC must maintain a registered agent with a physical address in your formation state.
What a Registered Agent Does
- Receives official government correspondence
- Accepts service of process (lawsuits, subpoenas)
- Forwards important mail to you
- Ensures you don't miss critical deadlines
Registered Agent Options
Professional Service (Recommended): $50-125/year
- ā Never miss important documents
- ā Privacy (your home address not public)
- ā Always available during business hours
- ā Digital document scanning
DIY (Not Recommended for Foreign Owners):
- ā Must have physical US address
- ā Someone must be available 9-5 local time
- ā Your address becomes public record
- ā Easy to miss important documents
Never Let Your Registered Agent Lapse
If your registered agent resigns or your service expires without renewal, the state will mark your LLC as "not in good standing" and may dissolve it. Always renew before expiration.
Key Deadlines Calendar
Annual Compliance Timeline
January
- January 31: Issue 1099 forms to US contractors
- Prepare for Q1 tax filing season
March
- Begin preparing Form 5472 and pro forma 1120
- Gather all transaction documentation
April
- April 15: Form 5472 + 1120 deadline
- April 15: FBAR deadline (auto-extension to October)
- April 15: File Form 7004 for 6-month extension if needed
May-June
- June 1: Delaware franchise tax deadline
- Check state annual report deadlines
Throughout Year
- Your LLC Anniversary Month: Wyoming annual report
- Check State Website: Confirm your specific deadlines
October
- October 15: Extended deadline for Form 5472/1120
- October 15: FBAR extended deadline
Penalties for Non-Compliance
Federal Penalties
| Violation | Penalty | Additional |
|---|---|---|
| Not Filing Form 5472 | $25,000 per form | +$25,000 per member |
| Late Form 5472 | $25,000 | Criminal charges possible |
| Incomplete/Inaccurate 5472 | $25,000 | Must amend + potential audit |
| Not Filing FBAR | Up to $10,000 | $100,000+ if willful |
| Late 1099 | $50-290 per form | Caps at $1,194,500 |
State Penalties
| State | Late Fee | Dissolution Timeline |
|---|---|---|
| Wyoming | $50 | 60 days after deadline |
| Delaware | $200 + 1.5%/month | After extended non-payment |
| Nevada | $75 | After multiple reminders |
| Florida | $400 | Automatic after deadline |
Administrative Dissolution
If you fail to file annual reports or pay franchise taxes, your state may administratively dissolve your LLC.
Consequences:
- ā Loss of limited liability protection
- ā Cannot conduct business legally
- ā Bank accounts may be frozen
- ā Damage to business reputation
- ā Expensive reinstatement process ($300-1,000+)
Complete Annual Compliance Checklist
šļø Your Annual LLC Compliance Checklist
State-Level (Check Your State)
Federal-Level
Ongoing Maintenance
Compliance Cost Summary
Wyoming LLC Annual Costs
- State annual report: $60
- Registered agent: $50-125
- US tax filing (CPA): $500-1,000
- Total: $610-1,185/year
Delaware LLC Annual Costs
- State franchise tax: $300
- Registered agent: $50-125
- US tax filing (CPA): $500-1,000
- Total: $850-1,425/year
Professional Help is Worth It
While you can file everything yourself, the risk of missing a deadline or making mistakes that trigger $25,000+ penalties makes professional help a smart investment.
Cost of CPA: $500-1,000/year
Cost of Missing Form 5472: $25,000+ in penalties
Setting Up Compliance Reminders
Calendar Reminders:
- Set reminders 60 days before each deadline
- Add backup reminders 30 days before
- Include registered agent renewal dates
Email Notifications:
- Sign up for state reminder services
- Enable notifications from your registered agent
- Subscribe to IRS deadline alerts
Professional Services:
- Hire a CPA familiar with foreign-owned LLCs
- Use compliance management services
- Consider annual packages that handle everything
Frequently Asked Questions
What happens if I miss the Form 5472 deadline?
The IRS assesses a $25,000 penalty per form, plus $25,000 per member. File immediately if you've missed the deadline and consider consulting a tax attorney about penalty abatement.
Do I need to file Form 5472 if my LLC had no activity?
Yes. Even with $0 income, foreign-owned LLCs must file Form 5472 annually. The penalty applies regardless of business activity.
Can I reinstate a dissolved LLC?
Yes, most states allow reinstatement by paying back taxes, penalties, and a reinstatement fee ($300-1,000+). The process takes 2-8 weeks depending on the state.
Do I need a CPA, or can I file myself?
You can file yourself using tax software, but most foreign owners hire a CPA ($500-1,000/year) to ensure accuracy and avoid $25,000+ penalties.
How do I know if my LLC is in good standing?
Check your state's business registry online. Search for your LLC name and verify its status shows "Active" or "Good Standing."
The Bottom Line
LLC compliance isn't complicated, but it's critical:
- ā File state annual reports on time ($60-300/year)
- ā Maintain active registered agent ($50-125/year)
- ā File Form 5472 + 1120 by April 15 ($25K penalty if missed)
- ā File FBAR if bank accounts exceed $10K
- ā Keep business and personal finances separate
Total annual cost: $600-1,400/year
Cost of non-compliance: $25,000-50,000+ in penalties
Never Miss a Compliance Deadline
Our compliance management service handles everything:
- ā State annual report filing
- ā Form 5472 preparation and filing
- ā Registered agent services
- ā Deadline reminders and calendar
- ā Expert guidance from CPAs
Starting at $899/year - less than the cost of a single missed deadline