Taking an AI company to the U.S.: 8 tax and compliance checkpoints for software and hardware teams (2026)

Software or hardware, you face six common checkpoints: entity choice, annual filings (including Form 5472), getting paid, sales tax, cross-border withholding and transfer pricing, and the tax treatment of research and other costs. Hardware adds two more: tariffs and imports, and product authorization and safety. On top of that sit legal questions, such as export controls, outbound investment rules, CFIUS and data rules, which an attorney advises on.

AI teams entering the U.S. tend to fall into two groups. Software teams sell SaaS subscriptions, usage-priced APIs, mobile apps, model licenses or AI agents. Hardware teams sell AI glasses, companion robots, cleaning and service robots, wearables, edge computing boxes, chips or modules. The tax paths differ, so here they are side by side.

Description: Each row is one checkpoint, with what software teams do, what hardware teams do, and where to read more.

Checkpoint	AI software (SaaS, API, apps, models, agents)	AI hardware (devices, robots, wearables, chips and modules)	Read more
1. Entity	Delaware C corp to raise money; Wyoming LLC to test the market	Same; a company holding inventory and importing must be able to act as importer	This guide; yclcpa.com/llc, yclcpa.com/ccorp
2. Annual filings	1120 or pro forma 1120 with Form 5472; BE-13; state reports	Same; states where you hold inventory may bring income or franchise tax	yclcpa.com/5472, yclcpa.com/subsidiary
3. Getting paid	Stripe, App Store, Google Play; Form 1099-K	Stripe, Amazon, your own site; Form 1099-K	This guide; yclcpa.com/1099k
4. Sales tax	SaaS taxable in some states; check economic nexus	Physical goods taxable almost everywhere; marketplaces collect, your own site doesn't	yclcpa.com/stripetax, yclcpa.com/fba
5. Cross-border payments	10% withholding on royalties; services depend on where performed; transfer pricing	No withholding on purchases, but prices and customs values must line up	This guide; yclcpa.com/subsidiary
6. Research and costs	Research abroad amortized over 15 years; U.S. research deducted now; R&D credit; cloud and GPU costs	Same; inventory cost includes duties; equipment depreciation	This guide; yclcpa.com/financials
7. Tariffs and imports	Usually not relevant (except importing servers or GPUs)	Section 301 tariffs; de minimis suspended; importer of record and bond	This guide
8. Authorization and safety	Privacy, data and state AI laws (attorney)	FCC authorization, CPSC certificates, UFLPA (attorney or test lab)	This guide

Teams usually come to the U.S. to be close to paying customers, get paid in dollars, list in U.S. app stores and raise U.S. venture money. All of that needs a U.S. company, but which kind depends on your stage: testing the market, raising money, importing hardware, or setting up a subsidiary under a Chinese parent.

Common reasons:

• Customers: business customers expect U.S. contracts and dollar invoices, and many procurement processes want a U.S. vendor with a W-9 and a U.S. bank account.
• Payments: a U.S. Stripe account needs a company registered in the U.S. with an EIN; App Store and Google Play developer proceeds can also go to a U.S. company account.
• Financing: U.S. venture investors generally invest in Delaware C corporations with preferred stock and an option pool; LLCs and foreign companies are hard for U.S. funds to take directly.
• Hardware channels: selling on Amazon, your own site or in retail needs someone in the U.S. to act as importer, hold inventory and handle returns and support.

Description: Each row is a common stage, with the usual structure, the main annual filings and what to watch.

Your stage	Usual structure	Main annual filings	Watch out for
Testing the market: 1–3 founders, building the product and landing first U.S. customers	Wyoming or Delaware single-member LLC	Pro forma 1120 with Form 5472; with U.S. business income, the owner also files Form 1040-NR or 1120-F	Stripe requires a full SSN or ITIN for individual-type accounts; raising money later means converting to a C corp
Raising money: taking U.S. funds, granting options	Delaware C corporation (founders hold stock directly or through a Cayman-type structure)	1120 with Form 5472 (25% or more foreign-owned); Delaware report and franchise tax	Section 1202 helps only non-corporate holders; an attorney prepares share documents
Importing hardware: holding inventory and shipping in the U.S.	C corp or LLC acting as importer of record (IOR)	Same as above, plus sales tax and taxes in inventory states	Tariffs, customs bond, FCC authorization; duties go into inventory cost
Chinese parent in control: the group forms a U.S. subsidiary	Delaware C corporation owned by the parent	1120 with Form 5472; BE-13; Form 1042-S for payments to the parent	ODI in China; arm's-length intercompany pricing (see yclcpa.com/subsidiary)

Teams planning to raise money usually choose a Delaware C corporation: investors know it, it can issue preferred stock and options, and founders may later use Section 1202 to exclude gain when they sell. Small teams getting started often use a Wyoming LLC because it's cheap to form and keep. Getting this wrong means paying attorneys and accountants to convert later, and the Section 1202 holding period only starts when the company becomes a C corporation.

• Delaware C corporation: files its annual report and franchise tax by March 1 (minimum $175 or $400 depending on the method; pay the lower), files Form 1120 and pays the 21% federal corporate tax. Offices or employees in another state mean registering there as a foreign corporation (see yclcpa.com/llc).
• Wyoming LLC: $100 to form, with a $60 minimum annual fee. A foreign-owned single-member LLC is disregarded by default and files a pro forma 1120 with Form 5472 every year. If the LLC has U.S. business income, a foreign individual owner also files Form 1040-NR, and a foreign corporate owner files Form 1120-F (see yclcpa.com/5472).
• No S corporation: foreign individuals and foreign companies can't own S corporation stock.
• California: employees or an office in California, or California sales, property or payroll above the state's "doing business" thresholds, bring California's $800 minimum franchise tax for LLCs and corporations, wherever they were formed.

What does converting an LLC to a C corporation cost?

• Two routes: the LLC can elect corporate tax treatment on Form 8832 (a C corporation for tax, still an LLC under state law), or convert under state law, for example a Wyoming LLC into a Delaware corporation. Investors usually want the second. Whether you need a new EIN depends on how it's done (see yclcpa.com/dupein).
• Tax result: generally treated as contributing the assets to a new corporation, usually tax-free, though liabilities exceeding basis and similar facts need a closer look (see yclcpa.com/ccorp).
• Form 8832's 60-month rule: after changing classification, you generally can't change again for 60 months.

How did OBBBA change Section 1202 (qualified small business stock)?

The One, Big, Beautiful Bill Act (OBBBA), signed July 4, 2025, changed the rules for qualified small business stock issued after July 4, 2025: hold 3 years and exclude 50% of the gain, 4 years for 75%, 5 years for 100%. The per-company cap rose from $10 million to $15 million (or 10 times basis), and the gross asset limit rose from $50 million to $75 million.

• Only C corporation time counts: stock issued or received once the LLC becomes a C corporation qualifies, with the holding period starting then; appreciation before the conversion isn't excluded. If you plan to raise money, becoming a C corporation earlier starts the clock earlier.
• Holders must be individuals or other non-corporate holders: stock held by a Chinese parent company gets no Section 1202 benefit. This matters most to founders who are U.S. taxpayers.
• Business tests: at least 80% of assets must be used in a qualified active business; consulting, financial, health and similar service businesses don't qualify. Software and hardware product companies generally aren't in the excluded fields, but confirm against your actual business.
• Full rules: see yclcpa.com/ccorp.

A U.S. corporation that a foreign person (including a foreign company) owns 25% or more of, directly or indirectly, files Form 5472 with its 1120 for each related party it had transactions with. A foreign-owned single-member LLC files regardless of the percentage, using a pro forma 1120 with Form 5472. Capital contributions, loans, service fees, royalties and expenses the owner pays for the company all count, so in practice it's nearly every year. Each missed form costs $25,000 per year.

• C corporation: a regular 1120 that computes and pays tax, with Form 5472 attached and e-filed; answer "Yes" to Schedule K, question 7 and give the foreign owner's percentage and country.
• Foreign-owned single-member LLC: the pro forma 1120 shows only the name, address and items B and E, with Form 5472 attached, faxed to 855-887-7737 or mailed to the IRS; it can't be e-filed (see yclcpa.com/5472).
• Deadline: April 15 for a calendar year; Form 7004 extends to October 15, but not the time to pay.
• BE-13: when a foreign person sets up or buys a U.S. business and holds 10% or more of the vote, the U.S. business files with the Commerce Department's Bureau of Economic Analysis (BEA) within 45 days, notice or not. Investments of $40 million or less file only the short Claim for Exemption.
• BOI: as of October 2026, U.S.-formed companies are permanently exempt (FinCEN final rule effective August 14, 2026); see yclcpa.com/boi.
• States: annual reports in the state of formation (Delaware corporations by March 1; Wyoming by the first day of the anniversary month), plus foreign registration, reports and taxes where you operate.
• Financial statements: statements for investors, banks or the parent should tie to Schedule L of Form 1120 (see yclcpa.com/financials).

According to Stripe's U.S. support pages, a U.S. account needs a company registered in the U.S. with an EIN, the address where the business actually operates (no P.O. boxes), and identity details for the representative and owners. A representative with an SSN or ITIN gives the last four digits; a non-U.S. person without either can, per Stripe, provide a local tax ID and supporting documents. Individual and sole proprietor account types require a full SSN or ITIN. Go by what your Stripe dashboard asks for.

• EIN: if the responsible party has no SSN or ITIN, you can't apply online; fax or mail Form SS-4 to the IRS. List the person who actually controls the company as responsible party, not a formation agent (see yclcpa.com/dupein).
• U.S. address: a registered agent's address is generally for legal service; whether it works as a business address is up to Stripe and the bank.
• ITIN: an individual without an SSN who has a U.S. filing need (a Form 1040-NR to file, or treaty benefits to claim) can apply for an ITIN. An ITIN generally goes with a tax return or under one of the Form W-7 exceptions, so wanting a payment account alone may not qualify. Check before applying.
• Through a CAA: YCL is an IRS Certifying Acceptance Agent (CAA). We verify the passport, so the original stays with you instead of going to the IRS; IRS processing generally takes about 7 weeks (see yclcpa.com/itin).
• Form 1099-K: Stripe and other payment processors issue Form 1099-K when the year's payments exceed $20,000 and 200 transactions. It reports gross amounts, which can include refunded sales and sales tax collected, so reconcile before filing (see yclcpa.com/1099k).
• App Store and Google Play: complete the developer tax forms for the company (a U.S. company gives a W-9). Platform commissions are expenses; whether revenue is booked gross or net depends on the contract and accounting rules.

It depends on the state. Sales tax is a state tax, and SaaS and digital products are generally taxable in states such as Texas, Washington and New York and generally not in North Carolina or California. If you have employees or an office in a state, or your sales into it exceed its threshold (usually $100,000; $500,000 in California, Texas and New York), you have nexus there and need to register, collect and file. Stripe Tax collects only in states where you're registered; registering and filing are still on you or your CPA.

• Break the product apart: software access, usage-based API fees, training and consulting, digital content and bundled hardware follow different rules in each state; bundles follow each state's mixed-transaction rules.
• Thresholds count every channel: Stripe, the App Store, direct wires from business customers and Amazon may all count toward the same state's threshold, and states such as North Carolina count nontaxable sales too.
• B2B exemptions: collect resale certificates from resellers; in states where business buyers self-assess use tax, check what the contract says.
• Income taxes are separate: some states tax corporate income or gross receipts (such as Washington's B&O tax) apart from sales tax.
• Details: thresholds, tax codes, Stripe Tax plans and costs are in yclcpa.com/stripetax; North Carolina's rules are in yclcpa.com/salestax.
• Digital services taxes abroad: France, the U.K. and others tax large digital companies, usually above global revenue in the hundreds of millions of euros, so startups rarely reach them.

It depends on what you're paying for. Royalties and license fees for using a model, software or trademark in the U.S. are U.S.-source income with 30% statutory withholding; if the recipient is a Chinese tax resident and gives you Form W-8BEN-E, the U.S.–China treaty generally cuts that to 10%. Research, operations and other technical services the team performs in China are generally not U.S.-source income and usually aren't subject to withholding. Both must be priced at arm's length, documented in agreements, and reported on Form 5472.

• Royalties: the U.S. company is the withholding agent. It withholds 10% or 30%, deposits it with the IRS, and by March 15 files Form 1042 (annual summary) and Form 1042-S (one per recipient, also sent to the parent). Without a valid W-8BEN-E, withhold 30%.
• Service fees: depends where the work is done. Work done in China is generally foreign-source with no withholding; if people come to the U.S. to do the work, the U.S. portion may be subject to withholding, depending on the facts.
• Characterizing software deals: the same agreement could be a transfer of copyright, a license, a service or a sale of copies, each with different tax results. Write the contract clearly; the characterization follows the IRS rules on computer program transactions.
• Deduct when paid: amounts owed to a foreign related party that are subject to withholding (such as royalties and interest) are generally deductible on Form 1120 only in the year actually paid. Accruing without paying doesn't give you the deduction.
• Transfer pricing: royalty rates and service fees must match what unrelated parties would agree to. The IRS can adjust them under IRC §482 and add a 20% or 40% penalty in serious cases, unless qualifying documentation existed when the return was filed. Service fees often use cost plus a markup; royalty rates need comparables or a supportable calculation.
• Match both sides: Chinese tax authorities apply transfer pricing rules to the parent's royalty and service income too, so keep the agreements, invoices and pricing consistent on both sides (see yclcpa.com/subsidiary).

New Section 174A, added by OBBBA, lets companies deduct domestic research costs immediately for tax years beginning after December 31, 2024. Research done outside the U.S. (engineers in China writing code or training models, for example) is still amortized over 15 years. Software development counts as research. The Section 41 research credit covers only U.S. research, and qualifying startups can apply up to $500,000 a year of it against the employer's payroll taxes.

• 15 years for research abroad: when the U.S. company bears the risk and owns the results, development fees it pays a team or parent in China are generally its foreign research costs, amortized over 15 years starting at the midpoint of the year paid, so only 1/30 is deductible in the first year.
• Domestic research now: research by U.S. employees or contractors can be deducted in the year paid, or amortized over at least 60 months if you elect.
• Payroll tax offset: a "qualified small business" (gross receipts under $5 million and no gross receipts more than five years back) can elect on Form 6765 with its income tax return to apply up to $500,000 of the credit against the employer share of Social Security and Medicare, then claim it on Form 941 with Form 8974. With no U.S. payroll, this doesn't help.
• Contractors in China: payments to foreign persons for services performed outside the U.S. generally aren't U.S.-source income, so no Form 1099-NEC and no withholding. Keep a W-8BEN (individuals) or W-8BEN-E (entities) on file to document foreign status.
• Cloud and GPUs: cloud servers, rented GPU capacity and API fees are generally current operating expenses, or research costs under the rules above if they're for research. Purchased servers and GPUs qualify for 100% bonus depreciation, which OBBBA restored for property acquired after January 19, 2025.
• Revenue recognition: for annual prepaid subscriptions, the books generally recognize revenue over the service period and carry the unearned part as deferred revenue. For tax, companies with average gross receipts of $32 million or less (2026) can use the cash method; accrual-method companies can generally defer advance payments no later than the next year (see yclcpa.com/financials).
• Sales to customers outside the U.S.: a C corporation's service and license income from foreign customers may qualify for the foreign-derived deduction eligible income (FDDEI) deduction, lowering the effective rate; it takes item-by-item calculation.

Chinese-origin hardware pays duty based on origin and HTS code. As of November 2026, the Section 301 tariffs remain, and since July 24, 2026 a further 12.5% Section 301 duty stacks on top. Tariffs imposed under IEEPA ended after the Supreme Court's February 20, 2026 ruling, and refunds can be claimed. The $800 de minimis exemption has been suspended for all countries since August 29, 2025. The importer of record pays the duty and is the only party that can claim refunds.

Description: Each row is one layer of duty, with its status and what it means for AI hardware. Rates change often; check the latest from U.S. Customs and Border Protection (CBP) and the U.S. Trade Representative (USTR).

Layer	Status	What it is	Impact on AI hardware
General (MFN) duty	In effect	By HTS code	Many electronics are duty-free or low
Section 301 (2018 Lists 1–4A)	In effect; second four-year review opened May 2026	Generally 25% on Lists 1–3 and 7.5% on List 4A; some exclusions expire Nov. 9, 2026	Most electronics and parts are on the lists
Section 301 (2024 increases)	In effect	Semiconductors (HTS 8541, 8542) 50% from 2025; non-EV lithium-ion batteries 25% from 2026	Check chips, modules and battery-powered devices carefully
Section 301 (forced labor action)	In effect since July 24, 2026	12.5% on Chinese-origin goods, stacked on the existing Section 301 duties; Section 232 goods excluded	Another layer of landed cost
IEEPA tariffs (fentanyl, reciprocal)	Ended: the Supreme Court held on Feb. 20, 2026 that IEEPA doesn't authorize tariffs	Refunds through CBP's ACE (the CAPE function, from April 20, 2026)	Only the importer of record or its broker can file
Section 122 temporary 10% surcharge	Expired (Feb. 24 – July 24, 2026)	150-day temporary duty	Goods entered in that window carry it in their cost
Section 232 (semiconductors)	In effect since Jan. 15, 2026	25% on certain advanced computing chips and derivative products, except imports supporting the U.S. supply chain buildout	Check before importing high-end GPUs and accelerator cards
$800 de minimis	Suspended for all countries since Aug. 29, 2025; OBBBA repeals the statutory basis from July 1, 2027	Small parcels need an entry and pay duty	Higher costs for direct-to-consumer parcels and overseas warehouses

• Importer of record (IOR): the IOR is responsible for the entry, the duties and compliance. Under DDP terms, the supplier or forwarder is the importer, the duty is in their name, and only they can claim refunds. If your U.S. company is the importer, it registers with CBP as an importer, and formal entries (generally goods over $2,500) need a customs bond.
• Customs value: generally the transaction value. When you buy from the Chinese parent, customs value and transfer pricing need to work together: the tax basis of inventory imported from a related party generally can't exceed its customs value (IRC §1059A).
• Duties go into inventory: duties, inbound freight and brokerage fees are inventory costs, deducted through cost of goods sold when the goods sell, not all in the year paid. Small businesses with average gross receipts of $32 million or less can use simplified inventory methods (see yclcpa.com/fba).
• FCC authorization: devices with Wi-Fi, Bluetooth or cellular radios generally need FCC equipment authorization before they're imported or marketed. Equipment on the FCC's Covered List can't get new authorizations, and since December 22, 2025 that includes foreign-produced drones and their critical components, with exemptions and changes since. Have a test lab and an attorney confirm during product design.
• CPSC and product safety: consumer products covered by CPSC rules need a certificate of compliance, and since July 8, 2026 importers file certificate data electronically through ACE at entry. Children's products face stricter rules. UL and similar safety marks are often a retailer requirement.
• UFLPA: under the Uyghur Forced Labor Prevention Act, goods or inputs linked to Xinjiang or to listed entities are presumed made with forced labor and can be detained, so be ready to document your supply chain. Batteries, polysilicon and aluminum deserve particular attention.
• Sales tax: physical goods are taxable in almost every state with a sales tax. Amazon and other marketplaces collect under marketplace facilitator laws; for your own site, you register and collect (see yclcpa.com/stripetax).

None of these are tax questions, and an attorney advises on them: export controls on advanced AI chips and technology, limits on U.S. persons investing in Chinese AI and semiconductor businesses, CFIUS review of foreign investment in U.S. businesses, limits on sending Americans' sensitive data to China, and state privacy and AI laws. Our part is getting the related structure, money flows and filings right on the tax side.

• Export controls (BIS): advanced computing chips, some AI model weights and semiconductor equipment are controlled by Commerce's Bureau of Industry and Security (BIS). In May 2025, Commerce announced it was rescinding the "AI diffusion rule" that was set to take effect May 15, 2025. From January 2026, exports of certain chips (the H200 tier, for example) to China moved to case-by-case review with conditions. If you export or re-export chips or technology to China from the U.S., have an attorney classify them and assess licensing first.
• Outbound investment (Treasury): the outbound investment rule (31 CFR Part 850), effective January 2, 2025, prohibits or requires notice of certain investments by U.S. persons in Chinese (including Hong Kong and Macau) semiconductor, quantum and some AI businesses. A U.S. company is itself a U.S. person, so a U.S. company funding a new AI subsidiary in China, or investing in a Chinese AI company, may be covered; so may a founder with a green card. The COINS Act (December 18, 2025) put the program into statute, and Treasury proposed a broader rule in October 2026 (comments due December 7, 2026). As of November 2026 it isn't final, and the current rule still applies.
• CFIUS: a foreign investor acquiring a U.S. business or certain rights involving critical technology, critical infrastructure or sensitive personal data may face a mandatory filing. A greenfield startup generally isn't a covered transaction, but land purchases and acquisitions need a separate look (see yclcpa.com/subsidiary).
• Sensitive data: the Justice Department's rule at 28 CFR Part 202, effective April 8, 2025, limits transfers of bulk U.S. sensitive personal data (precise location, biometrics, health data and more) to countries of concern, including China. If your app, wearable or robot collects user data, have an attorney review where it's stored and who can access it.
• State privacy and AI laws: California, Colorado and other states have consumer privacy laws, and some have passed AI-specific laws with different scopes and effective dates, some still changing. Products for children also fall under the federal COPPA. An attorney advises product by product.

A Chinese company or individual investing in the U.S. goes through outbound direct investment (ODI) procedures in China, handled in China by Chinese professional firms; YCL provides the U.S.-side documents (formation papers, EIN, bank and capital contribution records, financial statements) and coordinates. In the other direction, a U.S. company that owns a Chinese subsidiary files Form 5471 every year, and the subsidiary's profits may be included in the U.S. company's income as NCTI.

• Keep the numbers consistent with ODI: the ODI amount, the capital and loans actually wired, paid-in capital and intercompany loans on the U.S. books, and the amounts on Form 5472 should agree.
• "Round-trip" structures: a common setup has the U.S. company (or a Cayman company) form a wholly foreign-owned enterprise in China for R&D. A U.S. company owning a Chinese subsidiary files Form 5471; starting in 2026, GILTI is renamed NCTI, the return on tangible assets carve-out is gone, and the deduction for corporate shareholders drops to 40% (see yclcpa.com/5471).
• Outbound investment rules: before a U.S. company forms an AI subsidiary in China, have an attorney check the rules in the previous section.
• A Chinese subsidiary doing R&D for the U.S. company: plan the service fee pricing, whether the U.S. company's research costs fall under 15-year amortization, and how both sides' transfer pricing lines up, together.

U.S. employees mean running payroll: withholding federal and state income tax, Social Security and Medicare, and paying unemployment taxes as the employer. Contractors working in the U.S. who are paid $2,000 or more in a year (the threshold from 2026) get Form 1099-NEC (see yclcpa.com/1099nec). Employee or contractor depends on control, not on what the contract calls it.

• Payroll taxes: open payroll accounts, deposit and file each period, issue W-2s at year-end; see yclcpa.com/payroll.
• Employee or contractor: someone working on the company's schedule and methods, long-term and full-time for the company, is generally an employee; misclassification brings back taxes and penalties.
• Staff from China and visas: wages for work done in the U.S. are generally taxable in the U.S. H-1B and other visas are handled by an immigration attorney, with the company supplying payroll and financial records (see yclcpa.com/h1b).
• R&D credit: the payroll tax offset above only works once you have U.S. payroll for research.

Form the company and get the EIN, file BE-13 within 45 days, then open the bank and Stripe accounts. If you'll have employees or sales tax nexus, open those accounts before paying wages or collecting tax. In the following year, the Delaware report and Form 1042 come in March, and Form 1120 with Form 5472 is due April 15 (extendable to October 15); state reports follow each state's dates.

Description: Read down in time order; each row is what's due and where it goes.

When	What to do	Filed with
Before formation	Choose the structure (Figure 2); the Chinese side handles ODI; if a Chinese subsidiary is planned, an attorney checks the outbound investment rules	Chinese authorities; attorney
Week 1	Incorporate in Delaware (or through our online process at yclcpa.com/apply), issue shares, set up the stock ledger; apply for the EIN (fax Form SS-4 if no SSN or ITIN)	Delaware Division of Corporations; IRS
Within 45 days of setup	BE-13 (short form at $40 million or less)	Bureau of Economic Analysis (BEA)
After the EIN arrives	Open the U.S. bank account and Stripe; sign license and service agreements with the parent; collect its W-8BEN-E	Bank; Stripe; company files
Before the first payroll	Register for withholding and unemployment accounts and as a foreign corporation in the operating state	State revenue department; Secretary of State
When nexus is reached	Register for sales tax in that state, add it to Stripe Tax, file on the state's schedule	State revenue departments
Each quarter	Form 941 and state payroll returns; Form 8974 if using the R&D payroll offset	IRS; state
Around January 31 of the next year	W-2s, Form 940; Form 1099-NEC for U.S. contractors	IRS; SSA
March 1 of the next year	Delaware annual report and franchise tax	Delaware Division of Corporations
March 15 of the next year	Forms 1042 and 1042-S (if royalties, interest or dividends were paid)	IRS; the parent
April 15 of the next year (extendable to Oct. 15)	Form 1120 with Form 5472 (and Form 6765 for the R&D credit); state corporate tax; North Carolina and other annual reports	IRS; state revenue department; Secretary of State

Example (hypothetical numbers, to show the method): On January 5, 2026, Chinese company A forms US Co in Delaware, owns 100% and contributes $200,000. US Co has a small office and one salesperson in North Carolina and sells an AI SaaS subscription through Stripe: $30,000 a month, $360,000 for 2026. US Co pays A a license fee of 15% of revenue for the model and software, $54,000 for the year, and A's engineers in China develop the product for US Co for a cost-plus development fee of $120,000.

What missing one form costs: skipping this single Form 5472 starts at a $25,000 penalty, nearly five times the $5,400 withheld on the year's license fees. And withholding 10% without a W-8BEN-E on file leaves a $10,800 shortfall that US Co pays itself.

Start with your stage, who owns the company, and whether you sell software or hardware, then check which filings have been made. Here are the common situations.

• Situation A: 1–3 founders testing the market. Start with a Wyoming or Delaware LLC, get the EIN, open the bank account and Stripe; file a pro forma 1120 with Form 5472 each year, and owners with U.S. business income file their own returns too. If you expect to raise money within a year, forming a Delaware C corporation from the start is simpler.
• Situation B: raising money. A Delaware C corporation, with founders getting stock early so the Section 1202 clock starts; an attorney handles shares, options and preferred stock; we do the books, Form 1120, Form 5472 and the Delaware franchise tax.
• Situation C: a Chinese parent forming a U.S. subsidiary. ODI in China; on the U.S. side, BE-13 within 45 days, license and service agreements, a W-8BEN-E from the parent, arm's-length pricing, and at year-end Form 1120 with Form 5472 and Form 1042-S (see yclcpa.com/subsidiary).
• Situation D: hardware imports. Decide who's the importer, confirm HTS codes and origin, and model the duties; build FCC and CPSC work into product design; put duties into inventory cost and handle Amazon and own-site sales tax separately.
• Situation E: operating for years without filing Form 5472 or BE-13. Missing Forms 5472 can be filed with amended returns under the Delinquent International Information Return Submission Procedures (DIIRSP) with a reasonable cause statement; the outcome depends on the facts and the IRS (see yclcpa.com/diirsp). File BE-13 as BEA instructs.