US Tax for Nigeria-Resident LLC Owners, and What to Ask

A treaty between two countries does several things: it allocates taxing rights over particular kinds of income, it sets reduced withholding rates, it provides a mechanism for relieving double taxation, and it gives a route for resolving disputes between the two tax authorities.

Without one, each country applies its own domestic law to your situation independently. Whatever relief exists comes from each country's unilateral rules rather than from a negotiated instrument, and there is no mutual agreement procedure to fall back on.

This does not automatically mean you pay twice. It means the mechanisms that would normally prevent that are domestic rather than bilateral, and whether they cover your situation is a question with a real answer that requires someone to look at your facts.

It is a reason to get advice, not a reason to abandon the plan. It is also a reason to be skeptical of anyone selling into this corridor who has not mentioned it.

Whether you owe US income tax turns on the effectively connected income test:

"A foreign person generally must be engaged in a U.S. trade or business during the tax year to treat income received in that year as ECI, which is taxable in the U.S."

IRS, Effectively Connected Income (ECI). Page last reviewed or updated August 18, 2026. Owning a US LLC neither creates nor avoids that. It is fact-specific.

And regardless of the answer:

Failing to file Form 5472 when due and in the manner prescribed carries a $25,000 penalty.[1]Internal Revenue Service, Instructions for Form 5472 (12/2024)

Form 5472 with a pro forma Form 1120, on paper, due April 15, extendable to October 15, due even in a year with no income.

Nigeria has its own rules on the taxation of residents, on foreign income, and on exchange control governing funds moving in and out, administered by the Federal Inland Revenue Service and the Central Bank of Nigeria.

We have not verified any of it and this page states none of it.

"Am I resident for tax purposes, and what does that make me liable for?"

"How is income I receive from a foreign entity treated, and when does it become taxable?"

"What relief is available for tax I pay in the US, given there is no treaty?" This is the question the treaty absence makes most important. Ask specifically what unilateral relief exists and what evidence it requires.

"Was the way I funded the US company compliant with exchange control requirements?" Ask this even if it was some time ago.

"Does owning this entity create a reporting obligation here, and have I missed any?"

"How should money coming back to me from the US company be routed and documented?"

Take the answers in writing.

Believing a US LLC is tax-free. No such rule exists in either direction. It is the most common sales line into this market and it is not a description of the law.

Believing the two filings are one problem. The US information filing is due whether or not you owe US tax and whether or not anything is settled in Nigeria.