Delaware compliance for multi-country founders

Comprehensive summary: Delaware compliance for multi-country (foreign/non-U.S.) founders — checklist, key deadlines, federal filings, BOI/CTA status, banking and practical guidance. 1) Formation & state basics (Delaware) - Non-U.S. persons can form and own Delaware LLCs and corporations; only requirement is a Delaware registered agent with a physical Delaware address. (Delaware formation processes are standard; Operating Agreement recommended.) - Delaware LLCs: flat annual franchise tax $300 (due June 1); Delaware LLCs are not required to file an annual report.

Delaware corporations must file an Annual Report and pay franchise tax (due March 1). (State filing deadlines differ by entity type.) - If you operate (have nexus) in other U.S. states, you must foreign-qualify/register there; failure to register can limit your ability to sue and create penalties. 2) Federal tax & reporting obligations for foreign-owned entities - EIN: Foreign-owned entities generally need an EIN to open U.S. bank accounts and for IRS filings; foreign applicants without an SSN/ITIN apply via Form SS-4 by mail/fax (online may require an SSN/ITIN). - Form 5472 / pro forma 1120: Foreign-owned disregarded entities (single-member LLCs owned by a non-U.S. person) and certain other foreign-owned entities must file Form 5472 (and a pro forma Form 1120) to report reportable transactions with related parties.

Penalties for failure are severe (starting at $25,000). - Partnership tax and withholding: Multi-member LLCs treated as partnerships with foreign partners face special withholding and reporting requirements for effectively connected income (ECI) — withholding rules (IRC Sections such as 1446 for some partnerships) and Forms 8804/8805 may apply.

Foreign partners must file U.S. returns for ECI; withholding agents must comply. - Other federal considerations: income sourcing (FDAP vs ECI), treaty benefits (if applicable), FIRPTA for U.S. real-property sales, and payroll withholding if employing U.S. workers. 3) Beneficial Ownership Information (Corporate Transparency Act / FinCEN) - As of March 2025 FinCEN adopted an interim rule limiting BOI reporting to foreign reporting companies only; domestically formed Delaware LLCs were treated as exempt under the interim rule, but this remains subject to change.

Even if a Delaware domestic LLC is currently exempt from BOI filing, banks still perform KYC and may request owner identities. Monitor FinCEN for final rulemaking or changes.

Comprehensive summary: Delaware compliance for multi-country (foreign/non-U.S.) founders — checklist, key deadlines, federal filings, BOI/CTA status, banking and practical guidance. 1) Formation & state basics (Delaware)

- Delaware LLCs: flat annual franchise tax $300 (due June 1); Delaware LLCs are not required to file an annual report. Delaware corporations must file an Annual Report and pay franchise tax (due March 1). (State filing deadlines differ by entity type.)

2) Federal tax & reporting obligations for foreign-owned entities - EIN: Foreign-owned entities generally need an EIN to open U.S. bank accounts and for IRS filings; foreign applicants without an SSN/ITIN apply via Form SS-4 by mail/fax (online may require an SSN/ITIN). - Form 5472 / pro forma 1120: Foreign-owned disregarded entities (single-member LLCs owned by a non-U.S. person) and certain other foreign-owned entities must file Form 5472 (and a pro forma Form 1120) to report reportable transactions with related parties.

Penalties for failure are severe (starting at $25,000). - Partnership tax and withholding: Multi-member LLCs treated as partnerships with foreign partners face special withholding and reporting requirements for effectively connected income (ECI) — withholding rules (IRC Sections such as 1446 for some partnerships) and Forms 8804/8805 may apply.

Foreign partners must file U.S. returns for ECI; withholding agents must comply.

3) Beneficial Ownership Information (Corporate Transparency Act / FinCEN) - As of March 2025 FinCEN adopted an interim rule limiting BOI reporting to foreign reporting companies only; domestically formed Delaware LLCs were treated as exempt under the interim rule, but this remains subject to change.

Even if a Delaware domestic LLC is currently exempt from BOI filing, banks still perform KYC and may request owner identities. Monitor FinCEN for final rulemaking or changes.

• Non-U.S. persons can form and own Delaware LLCs and corporations; only requirement is a Delaware registered agent with a physical Delaware address. (Delaware formation processes are standard; Operating Agreement recommended.)
• If you operate (have nexus) in other U.S. states, you must foreign-qualify/register there; failure to register can limit your ability to sue and create penalties.
• Other federal considerations: income sourcing (FDAP vs ECI), treaty benefits (if applicable), FIRPTA for U.S. real-property sales, and payroll withholding if employing U.S. workers.

Banking, KYC and practical onboarding - Banks and payment processors still perform full customer due diligence (CDD/KYC) regardless of BOI/CTA regulatory changes. Expect to provide

EIN confirmation, certified Certificate of Formation, Operating Agreement naming managers and beneficial owners, passport/ID and proof of address for beneficial owners, signatory resolution, business description and funding sources. Bank onboarding is often the hardest part for foreign founders.

Multi-country founder specifics & practical guidance - For founders resident in different countries

ensure consistent ownership and identity documentation across formation documents, EIN/SS-4, and bank KYC packet. Consider U.S. tax residency risks, withholding on distributions to foreign members, and local-country tax reporting (FBAR/FATCA implications for owners). - Plan for state filings where the business has physical presence, employees, or inventory. Maintain Delaware registered agent and annual franchise tax payment to preserve good standing. 6) Risk areas and recommended next steps - High-risk areas: failing to file Form 5472 for foreign-owned disregarded entities; missing franchise tax payments; misunderstanding BOI status (it may change); failing bank KYC leading to inability to open accounts. - Recommended actions: engage a U.S. CPA/tax attorney to assess entity classification and reporting (5472, partnership withholding), secure an experienced Delaware registered agent, prepare a bank-ready document packet, obtain EIN early, monitor FinCEN/IRS/Delaware Division of Corporations for rule changes, and budget for annual compliance costs (registered agent, $300 franchise tax for LLCs, tax preparer/accounting fees). Practical checklist (actionable): - File Certificate of Formation with Delaware and appoint a registered agent. - Draft and adopt an Operating Agreement listing members/ownership percentages and capital contributions. - Apply for EIN (Form SS-4); if no SSN/ITIN, follow IRS procedures for foreign applicants. - Determine federal filing obligations: Form 5472 (DREs), partnership returns (Form 1065) and withholding (Forms 8804/8805), or corporate returns as applicable. - Pay Delaware franchise tax (LLC $300 by June 1) and file required state reports for corporations. - Build bank KYC packet (IDs, EIN, formation docs, operating agreement, business plan, source of funds). - Evaluate multi-state registration requirements (foreign qualification) and register where necessary. - Track BOI/CTA updates from FinCEN and plan to comply if rules change.