Does a US corporation organized under the laws of the US become a "foreign" corporation for IRS purposes if owned by foreign co?

Asked over 2 years ago - San Diego, CA

We have a Delaware corp. but it is currently entirely owned by a Chinese company, based on what I've found on the IRS/Treasury website this does not change the fact that the corporation is still considered a "domestic" corporation. Is this true?

Attorney answers (5)

  1. Robert V Cornish Jr.

    Contributor Level 16


    Lawyers agree

    Answered . If your corporate entity is incorporated in a US state or territory, it is considered to be a company within the United States, notwithstanding who owns the shares.

    If you don't want the Chinese company (or its officers/directors) to be subject to US laws, I would suggest incorporating your corporation somewhere outside the US.

    The foregoing is not legal advice nor is it in any manner whatsoever meant to create or impute an attorney/client... more
  2. Frank Wei-Hong Chen

    Contributor Level 20


    Lawyers agree

    Answered . Correct. The Delaware corporation is still considered a domestic corporation for IRS purposes.

    The information presented here is general in nature and is not intended, nor should be construed, as legal advice.... more
  3. Phillip Monroe Smith

    Contributor Level 18


    Lawyers agree

    Answered . Yes

    Sent from my Verizon Wireless 4G LTE DROID

    -----Original message-----

    THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can... more
  4. Linda Yin Liang

    Contributor Level 15


    Lawyers agree

    Answered . Why the question?

  5. Michael Shaun Goode

    Contributor Level 7


    Lawyers agree

    Answered . If the goal is to avoid US taxes, I would caution that there are other considerations. For example, those that meet a substantial presence test, green card holders, and US citizens must file US taxes, as well as comply with other reporting requirements (FBAR, FATCA, etc.).

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