How to Pay Yourself from a US LLC as a Non-Resident Owner

A non-resident who owns a US LLC often asks how to take the money out. The answer is different from a US employee's, because the owner of an LLC is not paid a salary in the usual way. This guide explains owner draws and distributions, how to move the money, what to record and why your own country's tax rules matter most. It is general information, so check your situation with an adviser who knows your country.

Key takeaways

• An LLC owner usually takes money out as a distribution or draw, not a salary.
• Move it from the LLC's business account to your own account and keep a record.
• A foreign-owned LLC with no US-source income generally owes no US income tax, but your home country may tax the money.
• Keep business and personal money separate.

Salary or distribution?

A single-member LLC is usually treated as a disregarded entity for US tax, and its owner is not an employee of it. So the owner takes distributions (also called draws) out of the LLC's profits instead of running payroll. A foreign owner who wants to work for the LLC inside the US needs to check immigration and work rules separately.

How to take the money out

1. Keep the LLC's money in its own business account. See a US business bank account for non-residents.
2. Decide the amount from the LLC's profits, after its costs and the yearly fees.
3. Transfer it to your personal account, by bank transfer or an online business account.
4. Write down the date, the amount and that it is an owner distribution.

What to keep on record

• The business account statements.
• A simple log of each distribution.
• The LLC's invoices and costs.
• Your operating agreement, which can say how profits are shared. See operating agreement for foreign owners.

Good records matter for the yearly filing as well. A foreign-owned single-member LLC reports certain transactions with its owner on Form 5472, and money paid to you is one of them. See Form 5472 guide.

Tax: two countries

A foreign-owned LLC with no US-source business income generally owes no US income tax, but the picture changes if the LLC earns US-source income or is treated differently. Your own country may also tax the profits, and when it taxes them, as profit or as a payment to you, depends on its rules. Read US taxes for a foreign-owned LLC and ask a tax adviser in your country.

Common mistakes

• Paying personal costs from the business account.
• Paying yourself without any record.
• Assuming the money is tax-free in your own country.
• Forgetting that the LLC still has yearly filings after you take the profit out.

A simple example

Say the LLC receives USD 10,000 from clients in a year and pays USD 2,000 in costs, including the registered agent and the state fee. That leaves USD 8,000 of profit. You take USD 5,000 out as owner distributions during the year and leave USD 3,000 in the business account for later costs.

• The USD 5,000 is a distribution, not a salary. Record each transfer.
• The USD 3,000 stays in the LLC and can be taken out later.
• Your own country's rules decide how much of the USD 8,000 is taxed there, and when.

The numbers are only an illustration. Your costs, profit and tax will differ.

Frequently asked questions

Can I pay myself a salary from my US LLC?

An LLC owner generally takes distributions rather than a salary. Whether anything else applies depends on how the LLC is taxed and on your work status, so ask an adviser.

Do I pay US tax on money I take out of the LLC?

A foreign-owned LLC with no US-source business income generally owes no US income tax on it, but your own country may tax it. Check with an adviser for both countries.

How do I move the money to my country?

By bank transfer from the LLC's business account, or through an online business account that supports your country. Compare the fees and the exchange rate.

Do I need to file anything when I take money out?

The distribution itself does not need its own form, but a foreign-owned single-member LLC generally reports owner transactions on its yearly Form 5472. Keep a record of each one.

Can I leave the profit in the LLC?

Yes. You can leave it in the LLC and take it out later. The LLC still has its yearly filings and costs, see what a US LLC costs each year.

Need a hand?

We prepare the yearly IRS filing for foreign-owned LLCs: US LLC tax filing service. To form the company, see LLC registration in the USA for non-residents. This is general information, not legal or tax advice.