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Whether you are opening a US subsidiary, sending staff to work for US clients or selling into the US from abroad, US federal, state and payroll rules apply from day one. We set up the structure and keep the filings right.
Serving United States, Virginia, Washington, DC, Maryland.
What we handle
A foreign company that is engaged in a trade or business in the United States pays US corporate income tax, currently 21%, on income effectively connected with that business, and files Form 1120-F. If the company is resident in a treaty country, the US can generally tax business profits only if they are attributable to a permanent establishment, such as an office or dependent agent, and the treaty position is disclosed on Form 8833. A foreign company that operates through a US branch can also owe a 30% branch profits tax on earnings treated as sent home, often reduced by treaty.
Many foreign companies operate instead through a US subsidiary, usually a Delaware or Virginia corporation. The subsidiary pays 21% federal tax plus state tax on its own profits, and dividends paid to the foreign parent are subject to 30% US withholding unless a treaty reduces the rate. A US corporation that is 25% or more foreign-owned, and any US single-member LLC owned by a foreign person, must file Form 5472 to report transactions with related parties, and the penalty for missing it is $25,000 per form. Prices charged between the US company and its foreign affiliates must meet the arm's-length standard under the transfer pricing rules.
Payments from the US to foreign persons bring their own rules. US-source interest, dividends, royalties and rents paid to a foreign company are generally subject to 30% withholding, reported on Forms 1042 and 1042-S, unless a treaty or exemption applies and a valid Form W-8BEN-E is on file. Selling US real estate triggers FIRPTA withholding. Treaties do not bind the states, so state income and franchise taxes, sales and use tax, payroll taxes and local business taxes such as Virginia BPOL can apply even when federal tax is reduced by treaty.
Speak with an advisorWhere we help
Entity choice, EIN, state registrations, payroll, intercompany agreements and the first-year Form 1120 and 5472.
IT and consulting companies sending employees to US client sites, where permanent establishment and payroll rules matter.
Remote sellers and e-commerce companies facing state sales tax economic nexus and income tax exposure.
Rental income elections, FIRPTA withholding on sale and state filing obligations.
Our approach
A senior advisor reviews your facts and documents.
Scope, fees and timeline in an engagement letter.
Returns, elections and forms prepared and reviewed.
IRS contact and planning all year.
Questions
If your question isn't here, call (703) 880-8412 and you'll reach a person.
Possibly not federal income tax if a treaty applies and there is no permanent establishment, but the company may still need to file Form 1120-F to claim treaty protection and preserve deductions, and states may impose income, franchise or sales tax based on sales into the state.
Most foreign companies choose a US corporation. It separates liability, simplifies state filings and avoids the branch profits tax, though dividends to the parent face withholding unless reduced by treaty. The right answer depends on your country's treaty and your plans.
US corporations that are at least 25% foreign-owned, and US single-member LLCs owned by a foreign person, report transactions with foreign related parties on Form 5472. The penalty for not filing is $25,000 per form, per year.
No. Income tax treaties apply to federal income tax. States set their own rules, so a company exempt from federal tax under a treaty can still owe state income, franchise or sales tax.
Their US work can create a permanent establishment for the Indian company, US payroll and state withholding obligations, and individual US tax filings. The US-India treaty and the employees' visa status shape the answer, so plan before the assignment starts.
Under FinCEN's March 2025 rule, foreign companies registered to do business in a US state remain subject to beneficial ownership reporting, while companies formed in the US are exempt.
Latest updates
Authorized representatives can now make balance-due, amended return, extension, proposed assessment and federal tax deposit payments for business clients online. Appropriate authorization for the client and tax matter is required.
Source: IRS (IR-2026-134)
For 2027 the joint-return standard deduction rises to $33,200, the estate tax basic exclusion to $15,480,000, the annual gift exclusion to $20,000 and the Section 179 expensing limit to $2,640,000. Our advisors recommend revisiting year-end gifting and equipment purchase plans with these figures in mind.
Source: IRS (IR-2026-133)
All 6,576 nominated census tracts, including 2,594 rural tracts eligible for enhanced benefits, become Opportunity Zones on January 1, 2027 for ten years. Investors with capital gains should review the new map before committing funds.
Source: IRS (IR-2026-132)
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