US Tax for Brazilian Founders Running US LLCs
Since Law 14.754/2023 (effective 1 January 2024), a Brazilian resident's controlled US LLC is taxed annually each 31 December at a flat 15% on its profits — distributed or not — when the LLC is low-taxed or under 60% active. Income outside that regime stays on the progressive scale to 27.5%. There is no US-Brazil treaty, so relief runs through unilateral reciprocity.
Approval-window and timing figures are based on founder reports tracked by Global Solo; regulatory figures follow the cited agency's published rules.
US tax for non-US-resident founders running US LLCs is shaped by three converging questions: does the US LLC have Effectively Connected Income (ECI), does the founder owe US tax personally on LLC profits, and how does the founder's home-country tax authority treat the LLC structure. For a non-US-person owner the US answer is usually narrow — no US income tax on foreign-earned business profits, with Form 5472 as the only filing; the expat-tax services below fit founders who are themselves US persons (citizens or green-card holders) living abroad. Home-country treatment requires a local CA / CPA familiar with the cross-border layer.
US Tax + Treaty options for Brazilian founders
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Brazil cross-border compliance layer
Brazil changed the calculus for this structure more than any other country in this matrix, through Law 14.754/2023. The US side is unchanged and standard: an LLC operated from Brazil with no US trade or business has no effectively connected income and no US federal income tax on business profits, with Form 5472 plus pro-forma Form 1120 due (USD 25,000 penalty, IRC Section 6038A). Because there is no US-Brazil tax treaty, any US-source FDAP income suffers the full 30% withholding with no treaty reduction.
On the Brazil side, residents are taxed on worldwide income, and since Law 14.754/2023 (effective 1 January 2024) the profits of a controlled offshore entity are taxed annually on 31 December at a flat 15% — whether or not distributed — replacing the old defer-until-distribution treatment. Control means more than 50% of voting capital (a single-member LLC qualifies), and the regime is triggered where the entity is in a privileged / low-tax regime or earns less than 60% active income. A US LLC that is disregarded and pays no US entity-level tax is commonly treated by Brazilian advisers as caught by the 15% annual charge; an LLC with at least 60% genuinely active income and not deemed a privileged regime may fall outside it, in which case income earned directly stays on the progressive DIRPF scale topping at 27.5%. Whether a specific LLC is in or out of the 15% regime is fact-dependent and is the point that needs a Brazilian tax adviser's opinion. Relief for US tax paid runs through Brazil's unilateral reciprocity mechanism (the US is a recognised reciprocity partner), and residents with offshore assets of USD 1 million or more also file the Central Bank's CBE declaration.
**Sources cited above:** IRC Section 6038A (Form 5472); IRS treaty index (no US-Brazil treaty); Law 14.754/2023 (effective 1 January 2024 — flat 15% annual taxation of controlled offshore entities, >50% control, privileged-regime / sub-60%-active triggers); DIRPF progressive scale (top 27.5%); Lei 4.131/1962 (reciprocity foreign-tax relief); Banco Central CBE declaration (USD 1,000,000 threshold). Last verified 2026-06-01.
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