US Company Formation from Portugal (2026): LLC or C-Corp, Portuguese Tax and Reporting, the US–Portugal Treaty, Costs and Banking
Forming a US company from Portugal: LLC or C-Corp, how Portugal taxes a US company run from Portugal, CFC rules, the US–Portugal treaty, costs and banking.
Portugal has become home to many founders, remote workers and digital businesses, from Lisbon's startup scene to freelancers in Porto and the Algarve. Many of them serve US clients or sell to US customers, and some already have a US company from before they moved. A US company can be formed from Portugal without travelling.
Portugal taxes its residents on worldwide income, has CFC rules, and expects foreign companies run from Portugal to be looked at carefully. For people who have recently moved to Portugal with an existing US LLC, the question is often how that LLC is now taxed. This guide explains both cases.
Short answer: a resident of Portugal can own 100% of a US corporation or LLC, formed remotely, and a Portuguese company can own a US subsidiary. With UCB, a Wyoming LLC with EIN is $249 all-in, and a Delaware corporation with EIN is $308. The US–Portugal treaty taxes business profits in the USA only through a US permanent establishment and generally limits dividend withholding to 15% for individuals. On the Portuguese side, how Portugal classifies a US LLC, whether a company managed from Portugal is Portuguese resident, Portugal's CFC rules, and any special regime you may be under all need checking with a Portuguese adviser before you form, or as soon as you move with an existing company.
Can a resident of Portugal own a US company?
Yes. US states place no restriction on the nationality or residence of owners. Portuguese citizens and residents of Portugal, including foreigners who have moved there can own 100% of a US LLC or corporation, be its only manager or director, and form it entirely remotely, with no US visa, Social Security number or US address. Every US company needs a registered agent in its state, included for the first year in every UCB formation. See registered agent explained.
Why founders in Portugal form a US company
- The US market: the largest consumer and business market in the world, with buyers who often prefer a US vendor.
- US investors, who invest in Delaware corporations. See raising US investment as a foreign founder.
- A US entity for US contracts, staff and liability, separating the US business from the home company. See US subsidiary for a foreign company.
- Payments in dollars, through a US bank account and US payment platforms. See Stripe for non-residents.
The tax picture for residents of Portugal
The US–Portugal tax treaty
Portugal has an income tax treaty with the USA. Dividends from a US corporation to a resident of Portugal can be withheld at a reduced treaty rate, generally 15% for an individual shareholder, instead of the standard 30%, if the owner gives the payer a valid W-8BEN claiming the treaty. The treaty also says business profits are taxable in the USA only through a permanent establishment there. See W-8BEN-E vs W-8BEN explained.
On the US side: LLC or corporation?
| US LLC (single-member) | US C-Corporation | |
|---|---|---|
| US federal tax if all work is done from Portugal | Usually none | 21% of profits |
| US tax when profits are paid to the owner | None (not a dividend) | Treaty rate, generally 15% for an individual owner |
| Yearly federal filing | Form 5472 + pro forma 1120 | Form 1120 + Form 5472 |
| Investors | Most will not invest | Standard (Delaware) |
A single-member US LLC owned by a non-resident is ignored for US income tax. If you do all the work from Portugal, with no US office, employees or dependent agents, the income is usually not effectively connected with a US trade or business, and no US federal income tax is due. The LLC still files Form 5472 with a pro forma Form 1120 every year, and missing it costs $25,000. A C-Corporation pays 21% on its profits wherever its people work, which suits startups raising US investment and businesses reinvesting in the USA. See effectively connected income explained, Form 5472 explained and LLC vs Inc for non-residents.
For a European resident, the US view is only half the picture. Your home country may classify a US LLC as a company even though the IRS ignores it, a US company managed from your country may be treated as tax resident there, and controlled foreign company rules can tax low-taxed profits at home. That is why many European founders choose a C-Corporation for a trading business, and use an LLC only after a local adviser has confirmed how it will be treated.
The Portuguese side
Points for your Portuguese contabilista or tax adviser:
- Classification and attribution. Portugal decides for itself how to treat a US LLC; the answer affects whether profits are taxed as they arise or when distributed.
- Place of effective management. A foreign company effectively managed from Portugal can be treated as Portuguese tax resident.
- CFC rules can apply to controlled foreign companies subject to clearly more favourable tax.
- Special regimes. If you moved to Portugal under a special tax regime, ask how it applies to income from a US company.
- An existing LLC after moving. If you formed a US LLC before moving to Portugal, review it now; your old position does not carry over automatically.
We handle the US side; your Portuguese adviser confirms the Portuguese side.
US sales tax is not VAT: there is no national system and no input tax recovery, and each state sets its own rules. A European brand selling goods into the USA should plan for state sales tax separately; it is not a service we provide, but we refer you to a specialist. See state taxes for a foreign-owned LLC.
Which US state?
- Wyoming: the usual choice for freelancers, agencies and online businesses run from abroad, with low yearly costs and owners' names kept off the formation filing. See Wyoming LLC for non-residents.
- New Mexico: no annual report at all. See New Mexico LLC for non-residents.
- Delaware: for a corporation that will raise from US investors. See Delaware LLC for non-residents.
- Florida, Texas or New York: when the business will have an office, warehouse, staff or property there. See Florida, Texas and New York.
Try our state selector or read best state for non-residents.
What it costs
| With UCB | |
|---|---|
| Wyoming LLC with EIN, all-in | $249 |
| Wyoming LLC with EIN and US bank account application | $348 |
| Delaware corporation with EIN, all-in | $308 |
| Keeping a Wyoming LLC active each year | $121 |
| Keeping it active plus the yearly federal return | $421 |
| US business address add-on (own suite number) | $60 a year |
State fees and the first-year registered agent are included in our formation prices, with nothing added for the state. See what a US LLC costs every year and the cost calculator.
Documents you need
| Document | Notes |
|---|---|
| Passport or national ID card | Valid passport (or Portuguese Cartão de Cidadão or residence card), clear colour scan |
| Proof of address | A recent Portuguese utility bill, atestado de residência or bank statement |
| Company name and business description | Two or three names; a specific description of what the company does |
| Share structure (corporation) | Number of shares and par value; we suggest a structure that keeps Delaware franchise tax at the minimum |
| Home company documents | Only if your company at home will own the US company: register extract and ownership |
No SSN, ITIN or US address is needed to form the company or obtain its EIN. See EIN for non-residents.
Banking and payments
Residents of Portugal are generally well served by US banks and fintechs that accept remote applications, and European identity documents are widely accepted. What still matters: a specific business description, a working website, consistent details across the state record, EIN letter and application, and a US business address with your own suite number rather than the registered agent's address.
See US business bank accounts for non-residents, why banks reject non-resident applications and Stripe for non-residents.
Worked examples
These are illustrative examples, not client cases.
Example 1: the newly arrived freelancer. A Canadian designer who moved to Lisbon already owns a Wyoming LLC. On the US side nothing changes: the LLC keeps filing Form 5472. Their Portuguese adviser reviews how Portugal now taxes its profits.
Example 2: the Porto software company. A Portuguese Lda forms a Delaware subsidiary to contract with US customers.
Example 3: the startup. Lisbon founders raising from US investors form a Delaware C-Corporation.
Common mistakes
- Assuming an existing US LLC is untaxed after moving to Portugal.
- Running a US company from Portugal without considering Portuguese residence.
- Ignoring Portuguese CFC rules.
- Ignoring Form 5472 because the LLC owes no US tax.
- Using the registered agent's address as the business address on bank applications.
Frequently asked questions
I moved to Portugal with a US LLC. What changes? Nothing on the US side; it still files Form 5472 every year. In Portugal, take advice on how its profits are now taxed.
Can my Portuguese company own the US company? Yes. The US company becomes a subsidiary, with transfer pricing between them.
Can I form a US company from Portugal without visiting the USA? Yes. Formation, the EIN and bank applications are all done remotely. See open a US company without visiting.
Do I need an ITIN? Usually not for a single-member LLC or its EIN. See what is an ITIN and who needs one.
How UCB helps founders in Portugal
We form US LLCs and corporations for residents of Portugal remotely, all-in: a Wyoming LLC with EIN is $249, and our formation, EIN and bank account package is $348. Each year we keep the company active and file its federal return through our US tax filing service, working alongside your Portuguese tax adviser, who confirms the Portuguese side. If an LLC or a corporation clearly suits your plans better, we will tell you which and why. See also forming a US company from abroad: country guide.
Living in Portugal and need a US company? WhatsApp us at +91 8105 199 399 or email enquiries@ucbsolutions.com, and we will recommend the right structure and state for you.
Let our experts handle it for you
Every business is different. Message us with your country, business type and goals, and we will recommend the right structure, state and package. We do the work; you focus on your business.
This article is general information for non-resident business owners and is not legal or tax advice. Rules and fees change; contact us to confirm what applies to your situation.
