Glossary
Foreign Person
Definition
For U.S. tax purposes, a foreign person is generally a nonresident alien individual, a foreign corporation, a foreign partnership, or a foreign trust or estate. It is the opposite of a “U.S. person,” which includes citizens, residents and domestic entities.
Who counts
- Nonresident alien individuals.
- Foreign corporations.
- Foreign partnerships.
- Foreign trusts and estates.
Why the label matters
Foreign persons are generally taxed only on certain U.S.-source income, and payers often must withhold under special rules. A foreign person owning a U.S. company can also trigger reporting obligations such as Form 5472.
Definitions vary by rule
The exact definition can differ by Code section or form instructions. For instance, withholding rules and information reporting rules do not always use the same wording, so the context matters before assuming someone is or is not a foreign person.
Practical example
For example, suppose a company in Colombia owns 100% of a Delaware corporation. The Colombian company is a foreign person, and the U.S. corporation may have reporting duties on Form 5472 for transactions with it.
General information, not tax advice
This page provides general educational information about U.S. federal tax rules. It is not individualized tax, legal or accounting advice, and it does not create a client relationship. Results depend on each taxpayer's specific facts.
Written by Roger I. Chirino, founder of Chirino USA Accountants & Advisors P.A.
Supported by licensed CPAs, IRS Enrolled Agents (EAs), and experienced U.S. tax professionals focused on cross-border compliance and planning.
Related questions
Can a foreigner own a U.S. LLC without an ITIN?
When does a U.S. corporation with a foreign shareholder need Form 5472?
Does a foreign-owned single-member LLC need an EIN?
Does a foreign-owned LLC need Form 5472 if there was no revenue?
Does paying LLC expenses personally trigger Form 5472 reporting?
What happens if Form 5472 is filed late?
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