New at YCL: An AI Going-Global Compliance Package for Chinese AI Software and Hardware Companies Entering the U.S.
YCL's AI going-global compliance package serves Chinese AI teams setting up U.S. companies: SaaS, API, AI apps and AI hardware. Three modules by stage (landing, operating, cross-border) cover entity choice, EIN and ITIN, BE-13, Form 1120 with 5472, SaaS sales tax, 1042-S withholding and R&D cost rules, with one bilingual team.
The short answer
YCL Accounting & Consulting now offers an AI going-global compliance package for Chinese AI teams setting up in the U.S.: SaaS, API and AI application companies, AI hardware brands, and U.S. subsidiaries of Chinese parent companies. It is built from three modules you combine by stage: landing (first three months after formation), operating (every year) and cross-border (when there are related-party payments or a parent in China). The full rules and examples are in our guide at yclcpa.com/aichuhai.
Who this applies to
AI founders whose team is entirely in China. You want a U.S. company to take Stripe payments, sign U.S. customers and raise money in the U.S.
SaaS and API companies with first revenue. You need monthly books and annual returns and are starting to meet state sales tax thresholds.
U.S. subsidiaries of Chinese parents. The parent charges service or license fees or lends money to the U.S. company, which raises withholding, related-party and reporting questions.
AI hardware brands that import. Tariffs, who acts as importer and landed cost drive margins, and physical sales bring state sales tax.
What each module covers
Module 1: Landing (first three months)
Entity and state. Companies planning to raise capital usually use a Delaware C corporation; teams that want to start operating first may consider a Wyoming LLC. We explain upfront what a later restructuring would cost.
Formation, registered agent, EIN. If a foreign officer needs an ITIN, we review the passport as an IRS Certifying Acceptance Agent, so the original does not have to be mailed.
First-year filings. BE-13 to the Bureau of Economic Analysis within 45 days of a new foreign-owned U.S. business; whether BOI reporting applies (under FinCEN's 2025 rule, companies formed in the U.S. are currently exempt).
Banking documents and chart of accounts. The company papers banks and Stripe ask for, accounts set up for a SaaS or hardware business, and a first-year compliance calendar.
Module 2: Operating (every year)
Books and three financial statements. Subscription revenue, deferred revenue, cloud costs and R&D classified correctly, ready for investors and due diligence.
Federal and state returns. Form 1120, with Form 5472 for a company 25% or more foreign-owned; state returns, Delaware franchise tax and annual reports.
Sales tax. SaaS is taxable in some states and not in others; we watch each state's economic nexus threshold as revenue grows and register and file when needed.
Payroll and contractors. Payroll and payroll tax filings for U.S. employees; W-8BEN or W-8BEN-E forms and payment records for contractors abroad.
Module 3: Cross-border (related-party payments)
Pricing and contracts. How service fees, license fees and loan interest are priced and documented.
Withholding. Which payments need U.S. withholding, whether the U.S.–China treaty's 10% rate applies, and Forms 1042 and 1042-S at year end.
R&D costs. Domestic research costs can currently be deducted in the year paid; foreign research costs, including a team in China, are amortized over 15 years under section 174, so contracts and payment flows matter.
Reporting to the parent. Chinese-language reports that reconcile with the parent's consolidated accounts, plus the U.S. documents needed for China's ODI filings.
A simple example
This is a simplified example. An AI app team in Shenzhen plans a U.S. raise next year and forms a Delaware C corporation owned by its Chinese parent. Landing: formation, EIN, BE-13 and the Stripe onboarding documents. In year one, even with no revenue, the parent's capital contribution or any expenses it pays for the U.S. company must be reported on Form 5472 attached to Form 1120. In year two subscription revenue grows; we keep monthly books and flag a state as sales approach its threshold. When the parent starts charging the U.S. company a service fee, the cross-border module is added for withholding and related-party documentation.
Common mistakes
"No revenue, no filing." A U.S. company 25% or more foreign-owned, or a foreign-owned single-member LLC, must file Form 5472 for any year with reportable transactions with its owner, such as contributions, loans or expenses paid. The penalty starts at $25,000 per form.
"SaaS isn't physical, so sales tax doesn't apply." It depends on the state, and crossing a state's threshold triggers registration there.
"Salaries of engineers in China are fully deductible in the U.S. this year." Foreign research costs are amortized over 15 years; plan before you pay.
"Export controls and CFIUS are an accountant's job." Those are legal questions for a lawyer, and customs entries are filed by a licensed broker. We handle U.S. tax and accounting and provide the data the others need.
What to do and when
Before forming: Book a free 15-minute consultation to decide the entity, state and ownership.
Within 45 days of formation: File BE-13.
April 15 each year (calendar-year companies): Form 1120 with Form 5472 is due; a six-month extension is available.
March 1 each year: Delaware corporate franchise tax and annual report are due.
March 15 each year: Forms 1042 and 1042-S for the prior year's payments to foreign persons are due.
How YCL can help
Getting started: a free 15-minute call about your structure, product, revenue and where the team sits; a written scope and quote by module; online engagement and document upload in our client portal; then reminders before every deadline on your compliance calendar. See the AI going-global compliance package and the guide Taking an AI company to the U.S..
YCL Accounting & Consulting is a multi-state CPA firm serving clients across the U.S. in English and Chinese, led by co-founder Gloria (Chenchen) Liu, CPA. You can start with a free 15-minute consultation.
Sources
BEA: Surveys of Foreign Direct Investment in the United States (BE-13)
FinCEN: Beneficial Ownership Information Reporting
Last checked: November 4, 2026
This article is general tax information, not tax, legal or investment advice for any individual situation.
Questions this article answers
Can we form a U.S. company if the whole team is in China?
Yes. Formation, the EIN, the registered agent and annual filings can all be handled remotely. If an officer needs an ITIN, YCL reviews the passport as an IRS Certifying Acceptance Agent, so the original is not mailed. Banks and payment platforms set their own onboarding requirements.
Does a U.S. company with no revenue still have to file?
Yes. A U.S. company 25% or more foreign-owned, or a foreign-owned single-member LLC, files Form 5472 for any year with reportable transactions with its owner, such as capital contributions, loans or expenses paid. The penalty for not filing starts at $25,000 per form.
Do we charge U.S. sales tax on SaaS subscriptions?
It depends on the state. Some states tax SaaS and others do not, and registration is only required in a state once your sales there pass its economic nexus threshold.
Can research costs of engineers in China be deducted in the U.S.?
Domestic U.S. research costs can currently be deducted when paid, but foreign research costs, including a team in China, are amortized over 15 years under section 174. How contracts and payments are structured affects the deduction, so plan before paying.
Do we have to buy the whole package at once?
No. The landing, operating and cross-border modules are combined according to your stage and can be added later. It starts with a free 15-minute consultation and a written quote.
Ready to talk? The first 15 minutes are on us.
Book online, or send us a few details and we will come back with a written quote within one business day.