Selling or Transferring a US LLC as a Non-Resident Owner

For a business whose value is its operating stack, that first column is often worth more than any tax difference. A buyer acquiring a working Stripe account, a US bank account and platform integrations is acquiring something that took months and might not be reproducible from their own country.

Which cuts the other way too: a buyer taking the entity also takes its history and its liabilities, so they will do diligence on your filings.

An ownership change triggers re-screening at every institution.

"The restriction applies to any business owner named on the Relay Account application, including beneficial owners."

Relay, Prohibited Countries. Last updated August 11, 2026. If the buyer lives or holds citizenship in a country on the institution's list, the account the buyer is paying for does not survive the transfer. The value they thought they were buying evaporates at re-verification.

Check the buyer against Mercury's and Relay's published lists before signing. For a cross-border sale between two non-resident founders this is a live risk and it is trivially cheap to check.

When a foreign person disposes of an interest in a US business, US withholding can arise on the transaction, and it generally falls on the buyer as withholding agent. Two separate regimes could apply, at two different rates, and which one you are in depends on something you decided when you formed the company.

Section 1446(f), on a partnership interest.

A transferee of a partnership interest must withhold 10% of the amount realized where any of the gain would be effectively connected income under section 864(c)(8).[1]Internal Revenue Service, Partnership withholding

A multi-member LLC that has not elected corporate treatment is a partnership for federal tax purposes. So if you and a co-founder sell your interests, the interest being sold is a partnership interest and this is your regime.

The enforcement mechanism is worth knowing because it explains why buyers care:

Under IRC section 1446(f)(4), if the transferee fails to withhold any amount required to be withheld, the partnership must deduct and withhold from distributions to the transferee the amount the transferee failed to withhold (plus interest).

The buyer who skips withholding does not escape it. The company withholds from their distributions instead. That is why a competent buyer will insist on the paperwork, and why a seller who waves it away looks like a risk rather than a convenience.

Section 1445 / FIRPTA, on a US real property interest.

FIRPTA withholding on a foreign person's disposition of a US real property interest is generally 15%.[2]Internal Revenue Service, FIRPTA withholding

In most cases, the buyer (transferee) is the withholding agent. The transferee must find out if the transferor is a foreign person. If the transferor is a foreign person and the transferee fails to withhold, the transferee may be held liable for the tax.

This regime turns on what the entity holds, not on how it is taxed. If your LLC owns US real property, FIRPTA is in the room regardless of member count.

The single-member case, and why we are not going to pretend it is settled.

A single-member LLC is disregarded:

For income tax purposes, an LLC with only one member is treated as an entity disregarded as separate from its owner, unless it files Form 8832.

There is no partnership interest to transfer, so 1446(f) has nothing to attach to. The reasoning from there is that the sale is treated as a sale of the underlying assets, and the analysis follows what those assets are. That reasoning is ours, not the IRS's. We tried to retrieve the regulations that would make it a citation rather than an inference, and the electronic Code of Federal Regulations blocked automated retrieval both times. No IRS page we could reach walks through a foreign person selling their US LLC.

So we will say what we can stand behind: if your LLC is multi-member, 1446(f) and its rate are your starting point. If it is single-member, the regime depends on the assets and you need the analysis done properly before the deal is structured.

Anyone telling you a foreign seller of a US LLC has no US withholding exposure should be asked to put that in writing with a citation. So should anyone giving you a confident single-member answer, including us.

The Form 5472 obligation for the period you owned the company remains yours.

Failing to file Form 5472 when due and in the manner prescribed carries a $25,000 penalty.[3]Internal Revenue Service, Instructions for Form 5472 (12/2024)

If you sell mid-year, the period before the sale is still a reporting period and somebody has to file for it. Agree who, in the sale agreement, in writing. This is a common gap and it becomes an argument later.

1. Decide the structure, with advice, because the tax and withholding treatment differ.

2. Check the buyer against the banking lists if the entity's accounts are part of the value.

3. Diligence on your side too. Your filings, your good standing, your state position. A buyer will find gaps and price them.

4. Paper the deal, including who files for the pre-sale period.

5. Amend the operating agreement and the state filing.

6. Notify institutions rather than letting re-verification discover it.

7. File for your period of ownership.

Withholding rules, rates, forms and thresholds on a foreign person's disposition of a US business interest. State-level transfer requirements. Whether specific processors permit ownership transfer without a fresh application.

All three are material and none is stated here.

Can I just transfer the LLC to the buyer? Legally, membership interests can be assigned. Practically, the accounts attached to it are re-verified against the new owner, which is where cross-border transfers fail.

Does the buyer keep the EIN? In a membership interest sale the EIN stays with the entity. In an asset sale the buyer needs their own.

Who files Form 5472 for the year of sale? Somebody must, for the period you owned it. Agree it in writing in the sale agreement.

Is there US tax on my gain? Possibly, and there is a withholding question on the buyer's side too. Both need advice before structuring.

Which structure is better? It depends on what the value is. If it is the operating stack, the interest sale preserves it. If it is customers or product, an asset sale may be cleaner.