Selling on Mercado Libre from the U.S. or China: Global Selling requirements, fees, fulfillment, USD payouts, who pays import taxes in Mexico and Brazil, and how U.S. companies and foreign-owned LLCs are taxed (2026)

Mercado Libre is Latin America's largest e-commerce marketplace, operating in Mexico, Brazil, Argentina, Chile, Colombia and other countries, with its own logistics (Mercado Envíos), payments (Mercado Pago) and ads (Mercado Ads). Its Global Selling program lets companies from the U.S., mainland China and Hong Kong list in several Latin American countries from one English-language account, without a local company, and get paid in dollars. For sellers who already have a U.S. company and inventory, it is a relatively light second growth channel.

• A growing market with different competition: e-commerce penetration in the region is still rising, and Amazon, Temu, SHEIN and TikTok Shop are all pushing in. Mercado Libre's edge is local delivery, payments and installment plans (Premium listings can offer buyers interest-free installments).
• No local company needed to start: on direct-to-consumer orders the buyer imports and Mercado Libre collects the import taxes, so you sell as a foreign exporter. That is the main difference from opening a local company in Mexico or Brazil.
• A managed route for Chinese sellers: Mercado Libre's 2026 terms include "China Full Managed Services" (updated 2026-08-26). Chinese sellers send goods to a Mercado Libre warehouse in China and set their net proceeds; Mercado Libre handles listings, pricing and promotions, customer service and returns, while the seller stays the owner of the goods until they are sold.
• A U.S. warehouse route for U.S. sellers: the terms also include "United States Envíos Full." U.S. sellers send stock to a U.S. fulfillment center Mercado Libre designates, and Mercado Libre exports each order to Latin American buyers. With stock in the U.S., the U.S. tax analysis has one more step (see below).
• Decide the entity first: onboarding includes a legal information validation, and once submitted you can't edit it yourself; you have to wait for a rejection to change it. Whether you use a U.S. or home-country company, and whether the U.S. company is an LLC or a C corporation, drives your filings in the U.S. and Latin America every year after. Read the entity table and the example below before you submit.

Description: Each row is one approach, showing where goods ship from, who imports, who is the seller and whether you need a local tax ID. Mercado Libre's terms at the time and your contracts decide.

Approach	Ships from	Importer	Seller	Local tax ID
A. Cross-border direct to consumer	The U.S. or China, order by order	The buyer (carrier clears customs; platform collects taxes at checkout)	You, as foreign seller and exporter	Generally not needed
B. Mercado Libre's U.S. or China warehouse (U.S. Full, China Full Managed)	Mercado Libre's U.S. or China warehouse, exported per order	The buyer	You; under China Full Managed the platform manages listings, pricing and service	Generally not needed
C. Local Full warehouse (Mexico, Chile)	Local warehouse, imported in bulk first	Mexico: you must prove lawful import and hold an RFC; Chile: a Chilean intermediary	Mexico: you; Chile: the intermediary imports and sells	Mexico requires an RFC
D. Local company selling as a domestic seller	Local warehouse	Your local company	Your local company	Yes (Mexican RFC, Brazilian CNPJ and so on)

Global Selling accepts companies incorporated in the U.S., mainland China and Hong Kong. U.S. companies provide an EIN, a U.S. principal business address and the contact person's ID, and a non-resident contact person provides the latest W-8 form; mainland Chinese companies provide a business license, a company certificate, the legal representative's ID (front and back) and a selfie; Hong Kong companies provide the certificate of incorporation, an NAR1 annual return or NNC1 incorporation form, a director's ID and details of anyone holding 25% or more. Once submitted, the information can't be edited until it is rejected.

Description: Each row is a seller location, with the documents to upload and the information to enter. Files must be PDF, JPG or PNG.

Seller location	Documents to upload	Information to enter	Watch out for
United States	Primary contact's passport or driver's license (U.S. residents may use an ID card or driver's license; non-residents only a passport); non-residents also provide the latest W-8	Legal name, entity type, EIN, business scope, U.S. principal place of business	The contact can be the legal representative or a beneficial owner and must pass face recognition
Mainland China	Business license, company certificate, legal representative's ID card front and back, selfie	Company name, type, license expiry, Unified Social Credit Code, business scope; representative's name, nationality, birth date, address, ID number and expiry	The same legal representative must fill in the form, upload the ID and take the selfie
Hong Kong	Company certificate template, certificate of incorporation, NAR1 or NNC1, director's ID, director's selfie	Company and business registration numbers and expiry, business scope; director details; individuals with 25% or more	Each file up to 50 MB

The rough order:

1. Create an international seller account: register a business account on Global Selling and accept the international sales terms, the international shipping terms and each destination site's terms.
2. Legal information validation (KYC): upload the documents in Figure 2. Mercado Libre says regulators require it and you can't sell without it.
3. Set your collection method: under Selling Preferences, choose an e-wallet (WorldFirst, Payoneer and similar) or a bank account in your or your company's name.
4. Set local return addresses: one address in each destination country for buyer returns; if you don't have one, Mercado Libre lists service providers. With Full and no return address, returns go to a Mercado Libre warehouse, and items not picked up within 20 days may be donated or destroyed.
5. Choose sites and logistics, then list: pick your destination sites and shipping method (direct or Full), set net proceeds per unit, and let the built-in translator turn English listings into the local language.

• Your U.S. company's entity type: Mercado Libre asks for entity type and EIN, and a W-8 if the contact is a non-resident. A single-member LLC owned by a foreign person with no corporate election is a disregarded entity for U.S. tax, and under IRS rules its foreign owner gives a W-8BEN (individual) or W-8BEN-E (entity) rather than the LLC giving a W-9. Confirm the LLC's classification with the IRS before you fill this in; more below.
• Keep everything consistent: the state formation documents, the IRS EIN letter (CP 575 or 147C), the payout account holder, and the name and address on Mercado Libre should all match. If the EIN letter shows an old address, update it on Form 8822-B first.
• Individuals: the Global Selling registration flow is for businesses, and Mercado Libre's public materials list company documents only. The registration page at the time decides.

Listing is free; you pay only when an order is placed. Mandatory fees are the selling fee and your share of shipping, plus a flat per-unit fee on low-priced items; Full in Mexico adds storage, and long-term storage fees apply to slow stock. Brazil's selling fee is a flat 12.5% (Classic) or 16.5% (Premium); Mexico, Chile and Colombia charge by category. You set net proceeds in the back office, and Mercado Libre adds fees, international shipping and taxes to reach the price the buyer sees.

Description: Each row is a destination country, with the selling fee, the per-unit fee on low-priced items and the minimum listing price. Category fees are in the back-office fee tables.

Destination	Selling fee (Classic / Premium)	Additional per-unit fee	Minimum listing price (direct / Full)
Mexico	By category	MXN $33 per unit up to MXN $299	USD 3 / USD 4
Brazil	12.5% / 16.5%	BRL $9.6 per unit up to BRL $79	USD 3 / not available
Chile	By category	CLP $1,650 per unit up to CLP $15,650	USD 3 / USD 4
Colombia	By category	COP $7,200 per unit up to COP $60,000	USD 3 / not available
Argentina	TBD	TBD	USD 13 / not available
Full Mexico storage	Daily per unit by size: small USD 0.0006, medium 0.0033, large 0.0095, extra large or heavy 0.0276	—	Long-term storage after 4 months, from USD 0.77 per small unit per month and higher after 12 months; storage in Full Chile waived for now

• Premium listings cost more but let buyers pay in interest-free installments, which Latin American shoppers expect, and get more exposure.
• Shipping: you pay part of the shipping cost, depending on your reputation, origin and destination country and logistics method. Above the local free-shipping threshold, you pay all of it and the buyer ships free.
• Removal and disposal: you can ask for Full stock back or have it disposed of, priced by volume; for example, up to 0.01 cubic meters costs USD 8.27 to retrieve or USD 0.38 to discard.
• Fees change: the terms say significant service changes are posted 10 calendar days ahead and shipping table changes 2 business days ahead. Rerun the Revenue Calculator before pricing, and reconcile against each settlement report.
• Who invoices the fees: Mercado Libre treats its fees as charges for "IT services" invoiced by group companies; the terms list Global Selling, LLC in the U.S. and the local Mercado Libre companies. Book fees by invoicing entity and currency.

Direct to consumer is the lightest: when an order comes in you hand it to the assigned carrier within 3 business days, and the carrier exports, clears customs for the buyer and delivers; it works for Mexico, Brazil, Chile, Colombia and Argentina. Full is Mercado Libre's warehouse service: local Full in Mexico and Chile gives next-day delivery and better ranking but requires importing stock first; U.S. sellers can use a U.S. Full warehouse, and Chinese sellers a China warehouse with Full Managed. The choice decides who clears customs and which country your goods sit in, and so your taxes.

Description: Each row is a logistics option, with eligible sellers, destinations, how import and customs work, and the tax effect.

Option	Eligible sellers	Destinations	Import and customs	Tax points
Direct to consumer	U.S., China and Hong Kong sellers	Mexico, Brazil, Chile, Colombia, Argentina	Buyer imports; platform collects duties and taxes at checkout; carrier clears	Declare values truthfully; U.S. export rules apply
Full Mexico	International sellers, with approval	Mexico	You must prove lawful import (pedimento, invoices, certificates of origin and so on)	An RFC is needed to invoice buyers; a sale within Mexico brings Mexican VAT and platform withholding rules into play
Full Chile	International sellers	Chile	A Chilean intermediary imports, transports, markets and sells	Put a contract and arm's-length pricing in place with the intermediary
U.S. Full (United States Envíos Full)	U.S. sellers	Latin American sites	Stock goes into Mercado Libre's U.S. warehouse and is exported per order; buyer imports	Stock sits in a U.S. state: check that state's income and franchise tax; a foreign-owned LLC must revisit whether it has a U.S. business
China warehouse + Full Managed	Chinese sellers	Latin American sites	Exported from China; buyer imports	You remain seller and owner; China export filings, VAT and income tax under Chinese rules

• U.S. Full rules: stock held more than 90 days may be treated as excess, with 20 calendar days to remove it after notice; shortage claims close 20 days after receipt; all duties and taxes must be paid before goods arrive. Mercado Libre gives no legal, tax or customs advice.
• The export step: carriers prepare export documents for direct and U.S. Full shipments. A U.S. export with more than $2,500 under one Schedule B number, or one that needs a license, requires Electronic Export Information in AES, usually filed by the carrier or forwarder from the description and value you provide.
• Paperwork for Full Mexico: under Mercado Libre's Mexico terms, it can ask for invoices, import entries and permits, packing lists, certificates of origin, bills of lading and tax receipts; if you can't prove lawful import, customs proceedings costs fall on you. Without your own Mexican import registration you generally need a licensed importer of record, with fees and responsibilities set out in a contract.
• Returns: when a direct order comes back, the buyer may legally be the exporter; for returns caused by the seller or the platform, import costs may be refunded to the buyer. A local return address keeps returns from going back across the border.

Buyers pay in local currency (through Mercado Pago and other methods), and you receive your net proceeds in U.S. dollars. Mercado Libre converts through an authorized entity, and conversion costs and rate differences are the seller's; payouts go to a bank account or e-wallet (WorldFirst, Payoneer and similar) in your name, and Mercado Libre recommends e-wallets. You can't collect from buyers directly; your claim is against Mercado Libre for settlement.

• Pricing by net proceeds: you set the dollar amount you want per unit, and Mercado Libre adds fees, shipping and taxes, converts at the exchange rate and adjusts as rates move. Currency swings don't eat directly into your margin, but your local price moves and so can your competitiveness.
• Deductions: Mercado Libre may deduct fees and losses you owe (returns, claims, penalties) from net proceeds. Download the settlement detail every period rather than relying on what lands in the bank.
• Whose account: the terms require the payout account to be in your name. A U.S. company uses its own bank account or e-wallet; collecting company sales in the owner's personal account muddles who earned the income and your 1099 and 5472 reporting.
• Sanctions and AML: sellers must comply with OFAC sanctions and anti-money-laundering rules and provide compliance documents within 10 business days on request.

Mercado Libre rates sellers through a reputation system that affects shipping costs and exposure, and all cross-border orders fall under its buyer protection program. Products must meet each destination's prohibited and restricted lists, and many categories need local certification (for example NOM in Mexico, ANATEL or INMETRO in Brazil). Rights holders can report infringement through the Brand Protection Program (BPP).

• Reputation and handling time: direct orders must reach the carrier within 3 business days; package dimensions and weight must be accurate, or shipping is recalculated and the difference charged back.
• Listing rules: listings are in the local language (auto-translation is available), labeled as international sales, and follow each site's listing and prohibited items policies plus country-specific restrictions for cross-border sales.
• Compliance is the seller's job: the terms make the seller responsible for all permits, certifications and filings for export and for import and sale in the destination country, and goods held by customs generally aren't returned to origin. Product certification and labeling are handled by testing labs and lawyers.
• Brands and IP: you grant Mercado Libre a free license to your listing materials; BPP reports can lead to takedowns and, in serious cases, sanctions on all your accounts. Trademarks must be registered country by country by local trademark counsel.
• Ads: Mercado Ads is available on each site under local terms.

On direct-to-consumer orders, import duties and import taxes are legally the buyer's: Mercado Libre collects an estimate at checkout and the carrier clears customs and pays in the buyer's name, and Mercado Libre doesn't issue Mexican CFDI invoices because it is neither seller nor importer. You don't pay these taxes directly, but they are built into the price the buyer sees, so they shape your competitiveness. Once goods sit in a local warehouse or you open a local company, local registration and filing rules apply.

Description: Each row is a country, with the import taxes on cross-border parcels, who collects them and what the seller must watch. Rates change; check the price breakdown before you list.

Country	Import taxes on cross-border parcels	Collected by	Seller watch-outs
Mexico	Global courier rate: goods from non-FTA countries such as China, up to $2,500, 33.5% from 2026-01-01 (was 19%); goods from the U.S. and Canada use USMCA tiers: duty-free up to $50, 17% for $50–$117, 19% for $117–$2,500	Buyer bears it; platform collects at checkout; carrier pays	Full Mexico requires proof of lawful import and an RFC; Mexico widened platform VAT and income tax withholding in 2026, and whether it applies is a question for a Mexican tax adviser
Brazil	Remessa Conforme certified platforms (Mercado Livre certified in 2023) selling to individuals: 0% import tax up to $50 (from 2026-05-12, previously 20%); 60% for $50–$3,000 less $30; plus state ICMS of 17%–20%	Buyer bears it; platform collects at checkout	Business buyers (CNPJ) don't get this treatment; Global Selling has no Full in Brazil
Chile	Remote purchases up to $500 taxed as a "sale" at 19% VAT from 2025-10-25, collected by platforms registered with the SII	Platform at checkout	Under Full Chile, the Chilean intermediary imports and sells
Colombia	Duties and VAT under import rules	Buyer bears it; platform collects at checkout	Sales into Colombia above 31,300 UVT in the prior or current year (UVT is COP 52,374 for 2026, about COP 1.64 billion) mean significant economic presence: the platform withholds 10% of each payment, unless you register with DIAN and pay 3% yourself

• Mexico's rate depends on where goods ship from and their origin: the 2026 increase targets goods from countries without a trade agreement. Parcels a U.S. seller ships from the U.S. usually move under USMCA tiers, but whether Chinese-made goods shipped from the U.S. qualify depends on origin rules and the carrier's practice. Don't shade customs data to get a lower rate.
• Brazil moves fast: the 20% rate up to $50 ran from August 2024 to May 11, 2026; from May 12, 2026 it is 0%, and the discount above $50 rose from $20 to $30 (Receita Federal table updated 2026-09-14). Reports suggest a federal tax or the new CBS may return in 2027; watch official announcements.
• Colombia's annual statement: before January 31 each year, send Mercado Libre's tax mailbox a sworn statement that you stayed under 31,300 UVT last year, or that you are registered with DIAN for SEP (attach your RUT); otherwise 10% may be withheld. That 10% is on gross payments, far more than 3% self-assessed, so compare early if you are near the threshold.
• Credit in the U.S.? A U.S. company may be able to claim a foreign tax credit for Latin American withholding, but whether a tax on gross receipts is creditable, and how much, has to be worked through under the U.S. foreign tax credit rules, not assumed.
• Local advice: registration, invoicing and filing in Mexico, Brazil, Chile and Colombia follow a local tax adviser's view; we handle the U.S. side and tie local withholding and filings into your U.S. books and returns.

If direct shipping works and volume is modest, usually not. Consider a local company or tax ID when you want next-day Full delivery in Mexico, sell bulky or high-value goods, need to invoice business buyers, or want out of the high cross-border parcel rates. A local company pays local corporate income tax and VAT, and the bookkeeping and compliance cost is much higher.

• Mexico: a foreign company can obtain an RFC from the SAT; a local company (often an S. de R.L. de C.V.) is a Mexican taxpayer that issues CFDI e-invoices and files monthly VAT. From 2026, platform withholding of income tax and VAT on domestic sellers extends to companies; rates and creditability are for a Mexican tax adviser to confirm.
• Brazil: domestic sellers need a Brazilian company (CNPJ) and deal with federal taxes, state ICMS and NF-e e-invoices, in a system that is mid-way through VAT reform.
• What it adds in the U.S.: a U.S. company that owns a Mexican or Brazilian subsidiary files Form 5471 every year and may face NCTI (the renamed GILTI) and related rules; goods and service charges between the U.S. company and the subsidiary need arm's-length pricing. See our guide at yclcpa.com/5471.
• Test cross-border first: most sellers can test categories and prices with direct shipping or U.S. Full and look at a local company once volume is steady.

In Latin America, Mercado Libre's strengths are local logistics, payments and installments, and cross-border sellers get paid in dollars without a local company. Amazon lets sellers fulfill Mexican and Brazilian orders from U.S. FBA stock; Temu and SHEIN rely mainly on managed models supplied by Chinese factories; TikTok Shop launched in Mexico and Brazil in 2025, mostly for local sellers. If you also sell in the U.S., U.S. sales tax and 1099-K rules are entirely separate from Latin America and need their own handling.

Description: The first four rows are cross-border approaches in Latin America; the rest are platforms you may also use in the U.S. Columns show who can join, fees, fulfillment, seller of record and tax, and 1099-K and payouts. Figures are typical and vary by category.

Platform	Who can join	Main fees	Fulfillment	Seller of record and tax	1099-K and payout
Mercado Libre (Global Selling)	Companies from the U.S., mainland China, Hong Kong	Free listing; Brazil 12.5% / 16.5%, other sites by category; per-unit fee on cheap items	Direct; Full Mexico and Chile; U.S. Full; China Full Managed	You are seller and exporter; buyer imports direct orders and platform collects import taxes; platform collects Chile VAT up to $500	USD to an account in your name; no public statement on 1099-K
Amazon Mexico and Brazil (Remote Fulfillment)	Amazon sellers on the unified North America account	$39.99/month Professional covers the U.S., Mexico, Brazil and Canada; referral fees by category	U.S. FBA stock shipped across the border; local FBA stock needs an RFC or CNPJ	You are the seller; import and local tax under each Amazon site's rules	U.S. sellers (W-9) get a 1099-K above the federal threshold
Temu, SHEIN (Latin America)	Mostly Chinese factory suppliers; local seller programs too	Managed models: platform sets price, you quote a supply price	Platform handles cross-border logistics	Under managed models the platform sells; local programs follow local rules (see yclcpa.com/temu, yclcpa.com/shein)	Per platform contract
TikTok Shop Mexico and Brazil	Launched 2025, mainly locally registered sellers; cross-border eligibility per local recruitment pages	Platform commission plus creator commission	Mostly local warehouses	Local rules	Local rules
Amazon U.S.	Individuals or businesses from most countries	$39.99/month; most referral fees 8%–15%	FBA or self-fulfilled	Amazon collects sales tax in marketplace facilitator states	W-9 sellers above $20,000 and 200 transactions get a 1099-K (see yclcpa.com/fba)
Walmart U.S.	U.S. companies or companies from listed countries; selling history reviewed	No monthly fee; 6%–20%	WFS or U.S. warehouse	Walmart collects sales tax	1099-K to W-9 sellers above the federal threshold (see yclcpa.com/walmart)
Wayfair	Furniture and home suppliers	You quote wholesale; Wayfair sets retail	Drop ship or CastleGate	Wayfair charges customers tax as retailer	Paid as wholesale (see yclcpa.com/wayfair)
Etsy	Handmade, vintage and craft supply sellers	$0.20 per listing; 6.5% transaction fee; payment processing	Seller ships	Etsy collects sales tax	1099-K to W-9 sellers above the federal threshold (see yclcpa.com/etsy)
TikTok Shop U.S.	Local shops need a U.S. company or U.S. identity	About 6% in most categories plus creator commission	FBT or approved warehouses	TikTok collects sales tax	1099-K to W-9 sellers above the federal threshold (see yclcpa.com/tiktok)

• The biggest difference is who imports: on Mercado Libre direct orders the buyer imports and the platform collects; under local Full or a local store, you or your local company import. Amazon's Remote Fulfillment import arrangements follow Amazon's rules at the time.
• One U.S. company can sell in both regions: U.S. platforms collect U.S. sales tax and issue 1099-Ks; Latin American platforms collect Latin American import taxes. Both streams are the U.S. company's income on one U.S. return.
• Count the full cost: shipping shares, currency spreads, returns and import taxes (through price) often matter more than the fee rate. A profit model that works in the U.S. has to be rebuilt with Mercado Libre's fees and each country's tax rates.

Profit from Latin American sales is your U.S. company's income and goes on its U.S. return like domestic sales: Schedule C for a single-member LLC owned by a U.S. person, Form 1120-S for an S corporation, Form 1120 for a C corporation. Goods sold to foreign buyers and shipped abroad generally carry no U.S. sales tax, and Latin American import taxes are the buyer's, not your expense. Mercado Libre hasn't said publicly whether it issues 1099-Ks to U.S. sellers; reconcile one if it arrives, and report all income either way.

• Single-member LLC owned by a U.S. person: profit goes on Schedule C with 15.3% self-employment tax and quarterly estimates; with steady, higher profit, an S election and a reasonable salary may help (see yclcpa.com/scorp).
• S corporations and partnerships: profit flows to the owners' returns, and FDDEI isn't available (only U.S. C corporations can claim it).
• C corporations: profit is taxed at 21%; the part from sales to foreign persons for foreign use can qualify for the FDDEI deduction, covered next.
• U.S. sales tax: goods shipped from the U.S. to buyers abroad are exports and generally not subject to U.S. sales tax. If you also sell domestically (your own site, Amazon, wholesale), state sales tax applies as usual (see yclcpa.com/salestax and yclcpa.com/stripetax).
• State tax from U.S. Full stock: stock in a Mercado Libre U.S. warehouse is inventory in that state. Even if every unit ships abroad, the inventory itself can create income or franchise tax filing duties there. Texas franchise tax applies to LLCs too (no tax due below $2,650,000 for 2026 and 2027 reports, but an information report is still due), and companies doing business in California pay an $800 minimum each year. Mercado Libre's inbound instructions tell you which state the warehouse is in.
• Foreign tax credit: withholding in Colombia and elsewhere may be creditable in the U.S. (Form 1116 for individuals, Form 1118 for corporations), item by item under the rules.
• 1099-K: Mercado Libre's public pages don't say whether it issues 1099-Ks to U.S. sellers. Report all income from settlement reports regardless; if one arrives, reconcile it as described at yclcpa.com/1099k.

Yes. The OBBBA renamed FDII as FDDEI (foreign-derived deduction eligible income). For tax years beginning after December 31, 2025, a U.S. C corporation deducts 33.34% of FDDEI, for an effective federal rate of about 14% (21% × 66.66%). Profit from Mercado Libre sales to individual Latin American buyers shipped to foreign addresses generally meets the "sold to a foreign person for a foreign use" test. Claim it on Form 8993 attached to Form 1120, and keep the support.

• Who qualifies: only domestic C corporations, including U.S. subsidiaries of foreign parents. LLCs under default classification, S corporations and partnerships can't; an LLC can after electing corporate treatment on Form 8832.
• What the OBBBA changed: the deduction falls from 37.5% to 33.34% (the scheduled drop to 21.875% in 2026 was repealed), giving about 14%; the reduction for a deemed return on tangible assets (QBAI) is gone, and interest and R&E expenses are no longer allocated against this income. For trading companies with inventory and warehouses, that is generally better than before. This follows IRC §250 for tax years beginning in 2026.
• The calculation: start with deduction eligible income (gross income less related expenses and taxes, but not interest or R&E), take the part from sales to foreign persons for foreign use (FDDEI), and multiply by 33.34%. The deduction is limited by taxable income.
• Proving foreign person and foreign use: under Treas. Reg. §1.250(b)-4, a sale to an end user with a shipping address outside the U.S. is presumed to be to a foreign person, and delivery through a carrier or freight forwarder to an end user who receives it outside the U.S. is a foreign use. Keep the destination country, order number and settlement record for each order; the presumption fails if you know or have reason to know the buyer is a U.S. person.
• Sales to a local intermediary: under Full Chile, a Chilean intermediary imports and sells; your sale to it is a sale for resale, and you need to show the goods ultimately reach end users outside the U.S.
• State tax: many states don't follow this deduction, so state income tax is computed separately.

It depends on where the goods ship from and whether there is any U.S. activity. If goods ship straight from China to Latin American buyers and there is no U.S. warehouse, employee or agent, the LLC's income is generally neither U.S.-source nor effectively connected, so the foreign owner generally owes no U.S. income tax. But the LLC is a foreign-owned disregarded entity and must file a pro forma Form 1120 and Form 5472 by April 15 every year, with a $25,000 starting penalty per missed form. Stock in U.S. Full, or U.S. staff or an office, means a fresh analysis.

A typical case: a Chinese seller formed a Wyoming or Delaware LLC, owns 100% of it, uses it on Mercado Libre and ships from Shenzhen to Mexico and Brazil.

• What the LLC is for tax purposes: under Treas. Reg. §301.7701-3, a single-owner LLC without a Form 8832 election is a disregarded entity, and its income belongs to the foreign owner. For information reporting only, it files a pro forma 1120 with Form 5472 covering transactions with its owner (contributions, loans, expenses paid, payouts to the owner), with no tax (see yclcpa.com/5472).
• W-9 or W-8: under the W-9 instructions, a disregarded entity with a foreign owner doesn't give a W-9 in its own name; the owner gives a W-8. Mercado Libre's validation guide also asks non-residents for a W-8. An individual owner uses W-8BEN, an entity owner W-8BEN-E (see yclcpa.com/w8ben). Unlike Walmart, which only offers a W-9 route for U.S. entities, this can usually be filled in truthfully; the full Walmart analysis is at yclcpa.com/walmart.
• Is there U.S. income tax? A foreign person owes U.S. income tax on business profits only if engaged in a U.S. trade or business with effectively connected income (ECI), or on certain fixed U.S.-source income. Goods held in China and sold to Latin American buyers generally pass title outside the U.S., and with no U.S. office, employee or dependent agent, there is generally no U.S. trade or business. A China-resident owner also has the U.S.–China treaty (no U.S. tax on business profits without a permanent establishment).
• When to look again: using U.S. Full (stock stored and exported from the U.S.), having U.S. employees or agents who close sales, a U.S. office, or also selling on U.S. platforms can turn part of the income into U.S. trade or business income. Then analyze the facts and, where needed, file a timely Form 1040-NR (individual) or 1120-F (foreign corporation), including a protective return to keep deductions; a 1040-NR needs an ITIN (see yclcpa.com/itin).
• Elect C corporation status on Form 8832? Usually not just for Mercado Libre. After the election, all the LLC's profit is taxed at 21% (about 14% on FDDEI), dividends to a Chinese owner are withheld (generally 10% under the treaty), and you generally can't change again for 60 months (§301.7701-3(c)(1)(iv)). It suits sellers who keep profit in the U.S. or also sell heavily in the U.S. See yclcpa.com/walmart and yclcpa.com/ccorp.
• State side: the LLC files its formation state's annual report and fees (Wyoming's is due in the anniversary month); with U.S. Full, look at the warehouse state too.
• China side: how a China tax resident reports foreign business income in China is a question for a Chinese tax adviser.

When your factory in China sells to your own U.S. company and the U.S. company sells on Mercado Libre into Latin America, the price between them is a related-party transaction. U.S. law requires arm's-length pricing (§482), and a U.S. company that is 25% or more foreign-owned reports transactions with foreign related parties on Form 5472 every year. Price too low and profit lands in the U.S.; price too high and a U.S. company that loses money year after year invites an IRS adjustment.

• No U.S. import, usually no §1059A: §1059A caps the cost basis of goods imported into the U.S. from related parties at the customs value. Goods that go straight from China to Latin America without U.S. customs generally fall outside it; with U.S. Full, goods are imported first, and customs value and book cost need to line up.
• Contracts must match who sells: with the Mercado Libre account in the U.S. company's name, the U.S. company is the seller and the factory a supplier. Contracts, invoices, payment flows and the platform account should all agree, not a Chinese company shipping, the U.S. company collecting, and no purchase on the books.
• Pricing methods: usually benchmarked to comparable distributors' margins (resale price or transactional net margin method) and reviewed yearly. See yclcpa.com/subsidiary for the full parent-subsidiary picture.
• China export rebates: the factory's export declarations and VAT rebates on goods shipped directly to Latin America follow Chinese rules and are handled by its Chinese accountant.

Example (hypothetical numbers, to show the method): Ms. Wang's family owns a factory in China. In 2025 they formed a Delaware C corporation (100% owned by the Chinese parent), and from 2026 it sells through Global Selling direct to consumers in Mexico, Brazil and Chile, shipping from Shenzhen to individual buyers, all with foreign delivery addresses. Annual sales (excluding import taxes the platform collects) are $800,000; Mercado Libre's fees and shipping share total $200,000, so net proceeds are $600,000. Costs: purchases from the parent at arm's length $280,000, freight to the carrier $40,000, Mercado Ads $40,000, conversion and payout fees $12,000, software, staff and professional fees $58,000. Taxable income is $170,000, with no interest or R&E. Federal income tax only.

How to read it:

• FDDEI saves $11,902 a year ($35,700 − $23,798), taking the effective rate from 21% to about 14%, provided every order can be shown to go to a foreign end user at a foreign address. Keep the settlement reports and order records.
• Dividends add a layer: profit kept for growth bears about 14%; profit paid to the Chinese parent bears another 10% withholding. Whether and when to pay dividends belongs in the cash plan.
• D looks cheapest, but only while goods never enter the U.S. and there is no U.S. activity; using U.S. Full or selling in the U.S. can change that. D's profit is also taxed in China under Chinese rules.
• State tax is separate: a Delaware company with no Delaware operations generally pays only Delaware franchise tax and the annual report; with U.S. Full, look at the warehouse state.

Start with who owns the business, where goods ship from, whether profit stays in the U.S., and which other platforms you use. U.S. resident sellers choose among an LLC, an S corporation and a C corporation by profit, and a C corporation with FDDEI gains ground as exports and retained profit grow; a foreign-owned single-member LLC that ships from China into Latin America can stay disregarded but files Form 5472 every year; a foreign company's U.S. subsidiary is usually a C corporation that can use FDDEI; multi-platform sellers keep entity and tax forms consistent everywhere.

Description: Each row is a kind of seller, with the usual entity, how it joins Mercado Libre, the annual federal filings and what to watch. Individual modeling decides.

Seller	Usual entity	Joins with	Annual federal filings	Watch out for
(a) U.S. resident seller (citizen, green card holder, resident)	LLC to start; S election once profit is steady; C corporation for high export share or retained profit	U.S. company, EIN, W-9	Schedule C + 15.3% SE tax; or 1120-S; or 1120 (with 8993)	Only C corporations get FDDEI; an S corporation saves SE tax but can't use FDDEI, so model both
(b) Foreign-owned single-member U.S. LLC	Disregarded; 8832 corporate election if needed	U.S. company, EIN; owner gives W-8BEN or W-8BEN-E	Pro forma 1120 + 5472; owner files 1040-NR if there is ECI	U.S. Full or U.S. activity means a fresh analysis; after 8832, generally no change for 60 months
(c) U.S. subsidiary of a foreign company	U.S. C corporation (Inc.) or an LLC taxed as one	U.S. company, EIN, W-9	1120 + 5472 + 8993; withholding on dividends and fees to the parent (1042, 1042-S)	Arm's-length pricing with the parent; a single-member LLC owned by the parent without an election is disregarded, back to (b)
(d) Chinese company joining directly, or a multi-platform seller	Chinese company via the China route (Full Managed available); or one U.S. company across platforms	China: business license; U.S.: EIN	Chinese company generally has no U.S. filing; U.S. company files by entity type	Don't get an EIN for the Chinese company just to onboard; keep tax forms consistent across platforms; reconcile U.S. platforms' 1099-Ks separately

More entity comparisons at yclcpa.com/entity; which state to form in at yclcpa.com/llc; C and S corporation elections at yclcpa.com/ccorp and yclcpa.com/scorp.

Record revenue gross and book selling fees, shipping shares, per-unit fees, storage, ads and conversion costs separately; import duties and taxes the platform collects for the buyer are neither your revenue nor your expense. You are paid in dollars, but orders are priced in local currency, so refunds and shipping chargebacks have to be matched line by line to the settlement detail.

• Revenue: record the item price from Mercado Libre's settlement detail (excluding collected import taxes). Booking only net proceeds hides fees and won't match the platform's invoices.
• Expenses: book selling fees by invoicing entity (for example Global Selling, LLC or a local Mercado Libre company); Mercado Ads from ad invoices; Full storage, removal and disposal separately.
• Currency: you sell in local currency and settle in dollars, and the spread is yours. Book the dollars actually received and show exchange gains and losses separately where needed.
• Inventory: track quantities and cost by location (China, U.S. Full, Mexico Full); destroyed stock goes to cost.
• Withholding: book Colombia's 10% SEP withholding and similar as prepaid or foreign tax, and keep the platform's certificates for the U.S. credit analysis.
• Small business simplification: businesses with average gross receipts over the prior 3 years at or below the 2026 threshold of $32,000,000 can use simplified inventory methods.

The most expensive mistakes happen before onboarding: the wrong entity, a W-9 where a W-8 belongs (or the reverse), an EIN or an 8832 filed just to get through, or stock sent to a U.S. or Mexican warehouse without thinking about tax. Work through the checklist below and most problems are solved before you list.

Description: Read top to bottom by date; each row is what to do by then and who handles it.

When	What to do	Who
1–2 months before	Choose the entity: U.S. C corporation, foreign-owned LLC or Chinese company; model FDDEI and dividend tax; confirm W-9 or W-8 consistency across platforms	YCL (paid in-depth consultation for complex cases, yclcpa.com/advisory)
1 month before	For a new company: state filing, registered agent, EIN; company bank account or WorldFirst / Payoneer account in the company's name	Secretary of State; IRS; bank or e-wallet
Before validation	Prepare Figure 2 documents; check the name and address on the EIN letter; W-8 for a non-resident contact	Mercado Libre
Before the first shipment	Choose logistics (direct, U.S. Full or local Full); check destination certifications and prohibited items; set local return addresses; check how Mexican and Brazilian taxes affect price	Mercado Libre; testing labs; carriers
Before Full Mexico	Settle the importer of record and RFC; complete import documents	Mexican importer; Mexican tax adviser
Monthly	Download settlement detail, ad invoices and inventory reports and keep books; invoice related-party purchases under the pricing policy	YCL
By January 31 each year	If Colombian sales are near 31,300 UVT, send the annual statement or register with DIAN first	Mercado Libre Colombia
April 15 next year	1120 + 5472 + 8993, or pro forma 1120 + 5472; state returns; 1042 and 1042-S for dividends (March 15)	IRS; states

• One entity, one set of records: company name, tax ID and W-9 or W-8 match across Mercado Libre, Amazon, banks and e-wallets.
• Don't get an EIN casually: a Chinese company joining directly doesn't need one; an EIN plus U.S. activity raises U.S. filing questions.
• Think tax before choosing a warehouse: U.S. Full brings state tax and an ECI question for foreign-owned LLCs; Mexico Full brings an RFC and Mexican tax; direct is lightest.
• Keep export proof: FDDEI rests on each order's foreign delivery address and settlement record; download and archive reports monthly.
• Watch local withholding: miss Colombia's January 31 statement and 10% is withheld.

Start with your entity, where goods ship from and where else you sell, then decide how to onboard and file. Common situations:

• Situation A: a U.S. resident already selling on Amazon through an LLC who wants to add Mercado Libre. Use the same LLC; Latin American profit goes on the same Schedule C or 1120-S. If exports keep growing and you want to keep profit in the business, compare a C corporation with FDDEI.
• Situation B: a Chinese seller with a U.S. single-member LLC. If goods ship from China, stay disregarded, have the owner give a W-8BEN and file the pro forma 1120 + 5472 each year; before using U.S. Full, analyze ECI and state tax.
• Situation C: a Chinese factory with a U.S. C corporation subsidiary. Onboard with the subsidiary, buy from the factory at arm's length, claim FDDEI on Form 8993 with the 1120 and keep foreign delivery records for every order.
• Situation D: only a Chinese company, testing Latin America. Join directly through the China route or Full Managed; no U.S. company or EIN needed; Chinese export filings and taxes apply as usual.
• Situation E: Colombian sales near 31,300 UVT, or already withheld at 10%. Compare registering with DIAN at 3% with continued 10% withholding, file the annual statement on time, and decide at U.S. filing time whether the tax withheld is creditable.