Last updated January 9, 2021
Can a Foreigner Own an S-Corp?
What types of foreigners can own
a U.S. S-Corporation?
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)?
Non-resident alien (aka non-US resident)
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.
Note: Another word used for non-resident alien is non-US resident.
US resident alien
A foreigner that is a US resident alien 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 each calendar year.
Keep in mind: You will need to maintain your US Resident Alien Status for many years. Meaning, it’s not a one-time requirement to in order to be an S-Corporation owner. You must always be a US Resident Alien in order to keep the S-Corporation in compliance with IRS rules. If you don’t maintain this status, the IRS will not honor your S-Corporation election.
Simplified
The following people can own an S-Corporation:
- US citizens
- US residents
The following people can’t own an S-Corporation:
- non-resident aliens (non-US residents)
References
https://www.law.cornell.edu/uscode/text/26/1361
https://www.law.cornell.edu/uscode/text/26/7701
https://www.irs.gov/forms-pubs/about-publication-519
https://www.irs.gov/individuals/international-taxpayers/nra-withholding
https://www.irs.gov/individuals/international-taxpayers/foreign-persons
https://www.irs.gov/businesses/small-businesses-self-employed/s-corporations
https://www.irs.gov/individuals/international-taxpayers/alien-residency-green-card-test
https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test
