S Corporation With Foreign Shareholder In Middlesex
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FAQ
Any foreign individual or company can own a C-corp in the US. It is not exclusively for US residents. Ownership in a C-corp is given out by offering company's stock. Ones who own this stock are the called the shareholders of the corporation.
Can a foreign national start a business in the U.S. without being a resident? “Yes, You Can!” Every day, foreign nationals are setting up US businesses, from major enterprises to small shops. Accessing the US marketplace is the key to success for many businesses around the world.
There is no limit on the number of shareholders a corporation taxed under Subchapter C can have. Anyone can own shares, including business entities and non-U.S. citizens.
Similarly, all the members of the U.S. corporation's Board of Directors and all its officers can, if so desired, be non-U.S. nationals and U.S. non-residents. Most states require that all companies formed in the state have a registered agent in the state (more about registered agents can be found here).
If you're not a citizen, you must qualify as a resident alien to own a stake in an S Corp. Resident aliens are those who have moved to the United States and have residency but aren't citizens. Of the below, only permanent residents can own an S Corp.
Each shareholder's distribution amount for the corporation's fiscal year should be reported on Schedule K-1 (Form 1120-S) Shareholder's Share of Income, Deductions, Credits, etc., Line 16, with "D" as the reference code.
Line 14a of the Schedule K is the sum of Self-Employment earnings for all partners.
Line 13H - Investment Interest Expense - Amounts reported in Box 13, Code H represent a taxpayer's share of investment interest expense incurred by the partnership.
Corporations file Form 5472 to provide information required under sections 6038A and 6038C when reportable transactions occur with a foreign or domestic related party.
