Yes. Generally, there are no restrictions on foreign ownership of any company formed in the United States, except for S-Corporations. It is not necessary to be a U.S. citizen or to have a green card to own a limited liability company or corporation formed in the United States.

Who is considered as a US shareholder of foreign corporation?

U.S. Shareholders of Foreign Corporations: Form 5471 A U.S. shareholder is considered to have control of a foreign corporation if, at any time during the tax year, he owns more than 50% of the value of the foreign corporation’s shares or voting power. A foreign corporation controlled by a U.S. shareholder is a CFC.

How does a foreign company do business in the US?

A foreign company is not required to conduct business in the US through a US entity and could instead open a branch office. Doing so, however, is generally not advised for tax and liability reasons. A branch office, unlike a subsidiary, is not a separate legal entity of the parent company.

Can a foreign corporation have an US subsidiary?

U.S. business activities of foreign persons generally are conducted either through a US subsidiary or a US branch. There are vast differences in the US tax treatment and legal ramifications of these two forms, as briefly summarized below:

Do you pay tax on earnings from a foreign subsidiary?

Under pre-Act rules, if a foreign company owns a U.S. corporation, and that U.S. company owns a foreign subsidiary, the U.S. company pays tax on the foreign subsidiary’s earnings when they are distributed. When the U.S. company distributes earnings to its foreign parent, the distributions are subject to a withholding tax at the rate of 30 percent.

How is a foreign corporation taxed in the US?

Under this unauthorized method, like a US subsidiary, a US branch would determine its taxable income by including income that it receives or accrues and deducting expenses that it pays or incurs. Again, this approach is in contrary to the current tax laws, and exposes the foreign corporation for substantial tax risks.

When does a foreign company become a CFC?

If any foreign person (e.g. a foreign parent company), owns 50 percent or more of the shares of a U.S. corporation (or an interest in a U.S. partnership, trust or estate), that will cause every foreign corporation that is more than 50 percent owned by the foreign person to be treated as a CFC, even though it actually has no U.S. shareholders.