US LLC from Australia: Partnership or Australian Company?

0:00How does Australia tax a US LLC?

It's late in Brisbane, and Chloe types a question into her phone. How does Australia tax a US LLC? The honest answer is a fork in the road, and most guides drive straight past it. As far as America goes, she can have the company. No social security number, and no trip to the US. It all happens online and in writing, so she never has to be awake in American hours. We're BaseAcross.

We set up US companies for founders outside America, so we'll be straight with you. Let's drive the road, one sign at a

0:36Do Australians even need a US company?

time. The first sign surprises people. You may not need a US company at all. The big card processor already takes Australian businesses. And a US LLC run from Australia can be taxed as an Australian company anyway. So it needs a reason. Good reasons are US buyers who want a US vendor, US contracts, US investors, or a platform that asks for one. Chloe has a buyer in America who wants to sign with a US company.

So she keeps driving.

1:10Can Australia treat my US company as Australian?

Now the fork. Australia sees a US LLC one of two ways. Take the left road. A company formed abroad is Australian-resident if it does business here, and its central management and control is here, or Australian residents control its votes. The Tax Office treats managing it from here as doing business here. A resident company is taxed on its worldwide income, like any Australian company.

Take the right road, and it isn't resident. Then Australia's foreign hybrid rule can treat the LLC as a partnership. Its income then counts as yours, every year.

1:50Wyoming LLC or Delaware C-Corp from Australia?

Forming it is the quick part, once you know which road you're on. A Wyoming LLC suits a business you run yourself, after advice. A Delaware C-Corp suits US investors, and where its board meets and decides sets its residence here. A C-Corp controlled from Australia has its own sign. The controlled foreign company rules can put some of its income in your hands, though for a US company the range is narrower.

The company needs a registered agent, an address in that state for legal papers. Then the EIN. Without a social security number, it's a paper form to the IRS.

2:30Can I bank in the US from Australia?

The bank is a straight stretch of road from Australia. One of the US fintech banks takes applications from founders here, and a multi-currency account can give the company US account details. Another fintech bank asks every owner for a physical US address. If you want to sell as a US business, the company can apply to the card processor's US side. It reviews you, and it can decline.

Use the same names and addresses everywhere.

3:01Partnership or Australian company: which is yours?

Back to the fork. Which way does an LLC like Chloe's go? Here's the guide's own illustration. You own all of a Wyoming LLC, and the IRS disregards it. You make every decision from Sydney. Central management and control is then likely in Australia, so the LLC can be Australian-resident. Resident, it isn't a foreign hybrid. It's taxed as an Australian company, at the lower rate if it's a small business.

If real management sat in the US instead, the foreign hybrid rule could make it a partnership, taxed to you each year. That's an illustration, not advice. Where management sits is a question of fact for your accountant.

3:46Your return, a temporary visa, the treaty and the IRS

Your own return is the next sign. Residents are taxed on worldwide income, and you can claim an offset for foreign tax, up to the Australian tax. On a temporary visa, broadly without an Australian spouse? Then most foreign income usually isn't taxed here. Work you do in Australia still is. There's a tax treaty with the United States, and it caps US withholding. But pay for work you do in Australia generally isn't US income, so it matters less for a services business.

The company still files a report with the IRS every year, even without sales, and missing it is expensive. It's usually due in the spring, and there's a form to ask for more time, filed before the deadline. Your Australian tax year runs on a different clock, so plan for both.

4:37In what order should I do it?

So here's how to drive it. See your accountant first: partnership, or Australian company? Then form, then bank. Record where decisions are made, and every payment between you and the company. Put the IRS report and your Australian returns on one calendar. The full guide, with every source and a checklist for your accountant, is linked below. And Chloe? She chose her turn-off with an accountant before she started the engine.