Can a Foreigner Own an S-Corp?

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Can a Foreigner Own an S-Corp?

The short answer is yes, a “foreigner” can own an S-Corp (also known as an S-Corporation), but it depends on what type of “foreigner”.

If you look on the main S-Corporation page of the IRS website, they briefly state, “To qualify for S-Corporation status, the corporation must meet the following requirements: May not be partnerships, corporations or non-resident alien shareholders.”

This is not very helpful since not all foreigners understand what a non-resident alien is, and the “who can own S-Corp” could be expanded on.

Note: An S-Corporation owner is the same thing as an S-Corporation shareholder.

Who can own an S-Corporation (be an S-Corp shareholder)?

• A foreigner that is a non-resident alien cannot own an S-Corp. As per the IRS, a non-resident alien is an individual who is not a US citizen or a US resident alien.

• A foreigner that is a US resident can own an S-Corp. As per the IRS, a US resident alien is an individual that is not a US citizen or US national and who meets either “the green card test” or “the substantial presence test” for the calendar year.

Said another way…

Can own an S-Corp:
– US citizens
– US residents

Cannot own an S-Corp:
– non-resident aliens

Matt Horwitz
Founder & Educator, LLC University®
Forming an LLC shouldn't be so complicated. Our step-by-step guide will make the process a breeze – and no complex legal jargon! LLC University® teaches people how to form an LLC for free in all 50 states. We hope you find our free guides and resources helpful in your business journey.
Disclaimer: Nothing on this page shall be interpreted as legal or tax advice. Rules and regulations vary by location. They also change over time and are specific to your situation. Furthermore, this comment section is provided so people can share their thoughts and experience. Please consult a licensed professional if you have legal or tax questions.

5 Comments

  1. Damian February 1, 2019

    Hi,
    as an resident alien and owner of an LLC s-corp, can I switch my LLC s-corp to a regular LLC to be able to keep it if I were to leave the US?
    Thanks
    Damian

    reply
  2. Yasser March 5, 2019

    Hi Matt,

    Can a US Citizen, and two non-US Citizen/Foreigners who reside outside the US form an S-Corp?

    Regards;

    reply
    • Matt Horwitz March 5, 2019

      Hi Yasser, no, non-US resident/non-resident aliens cannot be S-Corp owners. Hope that helps.

      reply

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