A Chinese parent's U.S. subsidiary — do foreign shareholders register with the state, and which filings actually apply?

No. Neither North Carolina nor Delaware has a process for registering shareholders or ownership percentages. North Carolina's certificate of authority and annual report ask only for the company name, registered agent, principal office and principal officers. Delaware's annual franchise tax report lists the directors, the signing officer and the principal place of business, plus share counts and gross assets used to compute the tax. Neither lists shareholders.

We hear this question often. A Chinese group forms a Delaware corporation and opens a plant or office in North Carolina; the parent holds 70% and a Chinese individual holds 30%. The group's legal or finance team asks whether the foreign shareholders must "file their ownership" with the state. There's no such state filing. The real foreign-ownership filings are federal, and we walk through them one at a time below.

North Carolina: officers only

• Certificate of authority: a Delaware corporation doing business in North Carolina applies to the North Carolina Secretary of State. Under N.C.G.S. 55-15-03, the application gives the company name, state of incorporation, date of incorporation, principal office, North Carolina registered office and agent, and the names and business addresses of current officers, with a Delaware certificate of existence (good standing) attached. No shareholders, and no directors.
• Annual report: under N.C.G.S. 55-16-22, North Carolina corporations and foreign corporations with a certificate of authority file an annual report showing the name and state of incorporation, registered office and agent, principal office address and phone, principal officers' names, titles and business addresses, and a brief description of the business. It's due by the 15th day of the fourth month after the fiscal year ends, so April 15 for a calendar year. Again, no shareholders.
• Stock ledger: who holds how many shares is recorded in the company's stock ledger and share certificates (or electronic records), kept by the corporate secretary. Update the ledger when ownership changes and keep the board and shareholder resolutions with it.

Delaware: directors and officers, plus shares and gross assets

• What's on it: under 8 Del. C. §502, the annual franchise tax report shows the registered agent, nature of the business, principal place of business, names and addresses of all directors and the signing officer, and authorized shares and par value. No shareholders.
• Shares and gross assets: there are two ways to compute the franchise tax. The authorized shares method has a $175 minimum. The assumed par value capital method needs issued shares and total gross assets (from Form 1120, Schedule L) and has a $400 minimum. Run both and pay the lower one. The report fee is $50, filing is online by March 1, and late filing costs $200 plus 1.5% interest a month (see yclcpa.com/annual).
• A Delaware corporation that only operates in North Carolina: still files the Delaware report and franchise tax, and files North Carolina's report and taxes separately. Keep good standing in both states.

Does the North Carolina Securities Division need a filing?

Usually not. The Securities Division of the North Carolina Secretary of State oversees securities offerings. Issuing shares to the founding shareholders (the parent and the individual) at formation generally falls under the exempt transactions in N.C.G.S. 78A-17, so no filing is normally needed. Raising money from investors is different: if you sell under Rule 506 of Regulation D and file Form D with the SEC, North Carolina requires a notice filing within 15 days after the first sale in the state.

Securities law is a question for an attorney, who advises on which exemption applies and how the documents read. Our part is making sure the capital contributions, share issuances and stock ledger tie out in the books.

To the IRS. For a foreign-owned U.S. C corporation, shareholder information mainly shows up on the federal Form 1120: Schedule G lists corporate and individual shareholders with 20% or more of the vote, Schedule K, question 7 reports a 25% foreign owner and its country, Part II of Form 5472 lists the 25% foreign shareholders, and the later parts report the related parties and transaction amounts.

• The bank isn't a government filing: under FinCEN's customer due diligence (CDD) rule, banks collect information on individuals who own 25% or more and one control person when a company opens an account. With a corporate parent, the bank traces up to the individuals behind it. Since February 2026, FinCEN lets banks rely on previously collected information for later accounts if the customer confirms nothing has changed.
• When ownership changes: update the stock ledger; Schedule G and Part II of Form 5472 follow year-end ownership; tell the bank and, for a new responsible party, the IRS (Form 8822-B within 60 days).

The real foreign-ownership filings fall into four groups: Form 5472 with the IRS, BE-13 with BEA, withholding returns for payments to foreign shareholders (Forms 1042 and 1042-S), and the parent's ODI filings in China. On top of that come the state reports, state taxes and payroll taxes any company has. What you don't file: a shareholder registration with the state, BOI, and in most cases a securities filing.

Description: Each row is one filing, with whether it applies, where it goes, when, and the cost of skipping it; filings that apply come first.

Filing	Required?	Filed with	When	If you don't
Form 1120 (with Schedule G and Schedule K, question 7)	Yes	IRS	15th day of the 4th month (April 15 for a calendar year); Form 7004 extends 6 months	5% a month, up to 25%
Form 5472 (one per related party with transactions)	Yes (25% or more foreign-owned)	IRS, with the 1120	Same as the 1120	$25,000 per form per year; continuation penalties with no cap
BE-13 (new or acquired business)	Yes (foreign person with 10% or more of the vote)	Bureau of Economic Analysis (BEA)	Within 45 days of setup or acquisition; short form at $40 million or less	Civil penalty of $5,911 to $59,114 (2025 adjustment); criminal liability if willful
BE-15 annual / BE-605 quarterly surveys	If BEA contacts you	BEA	Per BEA's notice	Same as above
Forms 1042 / 1042-S (withholding on dividends, interest, etc.)	Yes, when you make such payments	IRS; 1042-S also to the recipient	March 15 of the next year	The company owes tax it didn't withhold, plus late-filing penalties
Payroll: 941, 940, W-2, NC-5, NCUI 101, NC-3	Yes, with employees	IRS, SSA, NC Department of Revenue, NC Division of Employment Security	Quarterly and annually (see yclcpa.com/payroll)	Late deposit and filing penalties; withheld taxes can be collected from responsible individuals
North Carolina CD-405 (income and franchise tax)	Yes	NC Department of Revenue	15th day of the 4th month	Penalties and interest
North Carolina annual report	Yes	NC Secretary of State	15th day of the 4th month (April 15 for a calendar year)	Certificate of authority can be revoked
Delaware annual report and franchise tax	Yes	Delaware Division of Corporations	March 1 each year	$200 plus 1.5% a month; charter void if long unpaid
Parent's ODI outbound investment filings	Yes (under Chinese law)	China's development and reform, commerce and foreign exchange authorities (through a bank)	Before funds leave China	Per Chinese rules
Registering shareholders or percentages with the state	No	—	Neither North Carolina nor Delaware has such a process	—
BOI beneficial ownership report	No (U.S.-formed companies)	—	Permanently exempt under FinCEN's final rule effective Aug. 14, 2026	—
NC Securities Division filing for founder shares	Usually no	—	Only for offerings to investors (such as Rule 506); an attorney confirms	—
S corporation election	Not available	—	Corporations and nonresident aliens can't be S corporation shareholders	—

A U.S. corporation is a "reporting corporation" when one foreign person owns, directly or indirectly, 25% or more of its vote or value. It attaches Form 5472 to its Form 1120, one for each foreign or U.S. related party it had transactions with during the year: loans and interest, service fees, purchases and sales, rents, royalties, commissions and similar items. The penalty is $25,000 per missed form per year.

• Not the same as a foreign-owned LLC: this is a regular 1120 that computes and pays tax, and Form 5472 goes with it, e-filed. Only a foreign-owned single-member LLC uses the "pro forma 1120" (see yclcpa.com/5472).
• Related parties: 25% foreign shareholders (the parent and the 30% individual) and companies the parent controls (say, sister companies in Hong Kong or Vietnam). If the only dealings are with the parent, it's usually one form.
• Loans: report beginning and ending balances, or the monthly average; interest goes on its own line.
• Small amounts: a category of transactions totaling $50,000 or less for the year can be reported as "$50,000 or less."
• Capital contributions for stock: Part IV doesn't have a line for capital contributions; whether and how to show them depends on the instructions and the facts.
• Schedule K, question 7: 7a is the foreign owner's percentage (the largest, if there are several), 7b the country, and the number of Forms 5472 attached.
• Records: the company must keep books and records that support the related-party transactions, and failing to do so carries the same $25,000-per-year penalty. The assessment period doesn't close until the Forms 5472 are filed.

Yes. BE-13 is the Commerce Department's Bureau of Economic Analysis (BEA) survey of new foreign direct investment. When a foreign person gets 10% or more of the voting interest in a U.S. business, directly or indirectly (by setting up a new business, buying one, or an existing foreign-owned company setting up or expanding), the U.S. business files within 45 days, whether or not BEA contacts it. Since October 3, 2025, investments of $40 million or less file only the short BE-13 Claim for Exemption.

• Which form: BE-13A for acquiring an existing U.S. business; BE-13B for establishing a new one; BE-13D for a foreign-owned company expanding with a new facility; and BE-13E if BEA later asks for actual costs. If the investment is $40 million or less, file the Claim for Exemption with basic company and investor information and the total cost.
• The threshold changed: a final rule published September 3, 2025 and effective October 3, 2025 raised the short-form threshold from $3 million to $40 million. Guidance that still says $3 million is out of date.
• Deadline: 45 calendar days after the acquisition closes, the new entity is established or the expansion begins, or after you receive a BEA notice letter.
• How: online through BEA's electronic filing system. By law, BEA survey data is confidential and used only for statistics; it can't be used by the IRS or other agencies for tax, investigation or regulation.
• Later surveys: the annual BE-15 and quarterly BE-605 are generally filed only when BEA contacts you, and if it does, you must respond (filing an exemption if you don't meet the criteria). The five-year benchmark BE-12 (last done for 2022) requires every company that meets its criteria to file whether or not contacted; check BEA's announcement for the next benchmark year and thresholds.
• Penalties: the civil penalty for failing to report is $5,911 to $59,114 (2025 inflation adjustment), and willful failures can be criminal. Many companies learn about these surveys only from a BEA letter; if one arrives, answer on time.

No. As of October 2026, under FinCEN's final rule effective August 14, 2026, companies formed in any U.S. state are permanently exempt from BOI reporting, whoever owns them. Foreign-formed companies that register to do business with a U.S. state still report.

• The Delaware subsidiary in this guide: a domestic company, so no BOI.
• The Chinese parent itself: if the parent (not the subsidiary) registered to do business in a U.S. state, it's a foreign reporting company and files BOI within 30 days.
• Full rules and scam warnings: see yclcpa.com/boi.

A Chinese company investing abroad goes through outbound direct investment (ODI) procedures in China, generally a project filing or approval with the development and reform authorities, a filing with the commerce authorities (which issue the Enterprise Overseas Investment Certificate), and foreign exchange registration through a bank, all before money leaves China. A listed parent also has disclosure duties under its exchange's rules.

• Who handles it: ODI and disclosure follow Chinese law and are handled by attorneys or other professionals in China.
• What we supply: the U.S. side, including formation documents, the EIN, bank account and capital contribution records, and U.S. financial statements in the format the group needs (see yclcpa.com/financials).
• Keep the numbers consistent: 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 all agree.

Dividends and interest paid to a foreign shareholder carry 30% withholding by statute. If the parent is a Chinese tax resident and gives you Form W-8BEN-E, the U.S.–China tax treaty generally cuts both to 10%. As withholding agent, the company files Form 1042 and a Form 1042-S for each recipient by March 15 of the following year. Service fees for work performed in China are generally not U.S.-source income, so withholding usually doesn't apply.

• Dividends: 30% statutory, 10% under the treaty (for the parent and for a 30% Chinese individual shareholder who gives you Form W-8BEN). Without a valid W-8, withhold 30%.
• Interest: a parent owning 10% or more doesn't qualify for the portfolio interest exemption, so it's 30% by statute and 10% under the treaty. Interest owed to a foreign related party is generally deductible only in the year it's actually paid (IRC §267(a)(3)); accruing it without paying doesn't give you the deduction.
• Service fees: depends where the work is done. Management and IT support the parent provides from China is generally foreign-source and usually not subject to withholding. If the parent sends people to work in the U.S., the U.S. portion may be, and it depends on the facts.
• Filing: Form 1042 (annual summary) and Form 1042-S (one per recipient) are due March 15; tax you should have withheld but didn't is on the company.
• Not a branch: the branch profits tax applies to a foreign corporation's U.S. branch, not to a U.S. subsidiary, which is a separate corporation. Profits go home as dividends, subject to dividend withholding.

Loans, service fees and prices between the subsidiary and its parent must be at arm's length, meaning what unrelated parties would agree to in similar circumstances. The IRS can adjust them under IRC §482, and large adjustments can bring a 20% or 40% penalty unless the company had qualifying transfer pricing documentation when it filed its return.

• Sign agreements first: a loan agreement (amount, rate, term), a services agreement (scope, how fees are computed), and purchase or agency agreements; then follow them and invoice under them.
• Support the price: base interest rates on market rates and the IRS applicable federal rates (AFR); service fees are commonly cost plus a markup, with a clear explanation of the cost base and markup.
• Penalties: underpayments from §482 adjustments fall under the IRC §6662(e) accuracy penalty: 20% when a price is substantially misstated or the year's net adjustment exceeds the lesser of $5 million or 10% of gross receipts, and 40% in more serious cases.
• Contemporaneous documentation: to avoid that penalty, the documentation must exist when the return is filed and be provided within 30 days of an IRS request. A small company doesn't always need a full transfer pricing study, but keep the agreements, the pricing basis and the calculations.
• Match both sides: Chinese tax authorities also apply transfer pricing rules to the fees and interest the parent receives, so keep the two sides consistent to avoid adjustments in both countries.

The same as any North Carolina employer: withhold federal and North Carolina income tax and the employee share of Social Security and Medicare, and pay the employer share, FUTA and North Carolina unemployment insurance. Federally, file Form 941 quarterly and Forms 940 and W-2 annually; in North Carolina, file NC-5 withholding returns, the quarterly NCUI 101 and the annual NC-3. Report new hires to NC New Hires within 20 days.

• Accounts first: register a withholding account with the NC Department of Revenue and an unemployment insurance account with the Division of Employment Security (DES) before the first payroll.
• Foreign employees: collect W-4, NC-4 and I-9 based on status. Wages for work done in the U.S. by employees sent from China are generally taxable in the U.S.; Social Security and Medicare depend on their status.
• Details: deposit schedules, rates and deadlines are in yclcpa.com/payroll.

What else is due each year in North Carolina and Delaware?

• North Carolina CD-405: corporate income tax (2% for 2026) and franchise tax (minimum $200) on one return, due the 15th day of the fourth month; a federal extension carries over when you check the box, but the tax is still due on time (see yclcpa.com/ccorp).
• North Carolina annual report: by April 15 each year for a calendar-year company, filed on the Secretary of State's website.
• Delaware annual report and franchise tax: by March 1; a company whose only Delaware presence is its registered agent generally owes no Delaware corporate income tax.
• Sales tax: if you sell goods or taxable services in North Carolina, register separately (see yclcpa.com/salestax).

Foreign companies and foreign individuals can't own S corporation stock, so a foreign-owned subsidiary is a C corporation (Form 1120) or another classification. An LLC's default classification depends on how many owners it has: a single-member LLC 100% owned by the Chinese parent is disregarded, so the parent itself is treated as doing business in the U.S.; an LLC with two or more owners is a partnership. Either can elect C corporation treatment on Form 8832.

• Single-member LLC (parent 100%): files a pro forma 1120 and Form 5472 each year; if the LLC has U.S. business income, the parent files Form 1120-F and may owe branch profits tax (see yclcpa.com/5472).
• Multi-member LLC (parent 70%, individual 30%): a partnership by default, filing Form 1065, with IRC §1446 withholding on foreign partners' share of effectively connected income (21% for corporate partners, 37% for individuals), and the foreign partners file U.S. returns.
• Electing C corporation treatment: file Form 8832; after that it files Form 1120 with Form 5472 like any corporation, and generally can't change again for 60 months (see yclcpa.com/ccorp).
• Forming a corporation directly: a Delaware or North Carolina corporation is a C corporation by default with no election. Most foreign-owned subsidiaries go this way (see yclcpa.com/llc).

Most ordinary subsidiaries, such as a trading company, an office or a typical factory, don't need to file with the Committee on Foreign Investment in the United States (CFIUS) or report farmland. Investments involving critical technology, sensitive personal data or critical infrastructure, or buying farmland or land near military installations, may trigger mandatory filings or restrictions; have an attorney review them first.

CFIUS

• Mandatory declarations: under current rules there are two main cases: a foreign government acquiring a "substantial interest" in a U.S. business involved with critical technology, critical infrastructure or sensitive personal data (a TID U.S. business), and investments in U.S. businesses that produce, design or test critical technologies that would need an export license. Failing to file a required declaration can cost up to $5 million or the value of the transaction, whichever is greater.
• Voluntary filings: other transactions within CFIUS jurisdiction, including real estate near military installations, can be filed voluntarily. A greenfield startup that doesn't acquire an existing U.S. business generally isn't a covered transaction under Part 800, but buying land for it may fall under the real estate rules.
• 2026: Treasury requested comments in 2026 on a Known Investor Program. As of October 2026 nothing is final, and it wouldn't remove mandatory filings.
• Who decides: whether CFIUS has jurisdiction and whether to file is an attorney's call.

Farmland: AFIDA and North Carolina's new law

• Federal AFIDA: a foreign person, including a U.S. company in which foreign persons hold a significant interest, that acquires, transfers or holds an interest in U.S. agricultural land (including leases of 10 years or more) reports it to the U.S. Department of Agriculture (USDA) within 90 days. Penalties for missing or inaccurate reports run up to 25% of the land's fair market value. USDA proposed changes in June 2026 (broader reporting, higher penalties), not final as of October 2026.
• North Carolina S.L. 2026-54 (North Carolina Farmland and Military Protection Act): signed July 7, 2026, with its main provisions effective April 1, 2027. It bars an "adversarial foreign government" (based on the list in 22 CFR 126.1 of the International Traffic in Arms Regulations, which includes China), its state-controlled enterprises, and entities in which it holds a significant interest (33% or more) or substantial control from acquiring North Carolina agricultural land or land within 50 miles of listed military installations. Existing holders must register with the Secretary of State, and buyers sign an affidavit.
• Private companies: whether a privately owned Chinese parent is covered depends on whether the Chinese government holds an interest or control. An attorney reviews the ownership chain. State-controlled groups need to pay particular attention.

Finish ODI in China, form the company and get the EIN, then the North Carolina certificate of authority and the BE-13 within 45 days. Set up payroll accounts before hiring. Year-end and January bring the payroll annual filings; March brings the Delaware report and Form 1042; April brings Form 1120 with Form 5472, CD-405 and the North Carolina annual report.

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

When	What to do	Filed with
Before formation	Parent completes ODI and foreign exchange registration; settle ownership, entity type and state	China's development and reform and commerce authorities; bank
March 2026	Incorporate in Delaware; board resolution to issue shares; set up the stock ledger; apply for the EIN	Delaware Division of Corporations; IRS
April 2026	North Carolina certificate of authority (with a Delaware certificate of existence); open the bank account; shareholders fund their shares	NC Secretary of State; bank
Within 45 days of setup	BE-13 (Claim for Exemption at $40 million or less)	BEA
Before the first payroll	Register NC withholding and unemployment accounts; collect W-4, NC-4, I-9; report new hires within 20 days	NC Department of Revenue; DES
End of the month after each quarter	Form 941, NCUI 101, NC-5 (on its required schedule)	IRS; DES; NC Department of Revenue
When signing loan and service agreements	Price at arm's length; keep agreements and pricing support	Company files
Feb. 1, 2027	Q4 Form 941; Form 940; W-2 / W-3; NC-3 (Jan. 31 is a Sunday)	IRS; SSA; NC Department of Revenue
March 1, 2027	Delaware annual report and franchise tax (first year)	Delaware Division of Corporations
March 15, 2027	Forms 1042 and 1042-S (if interest or dividends were paid)	IRS; recipients
April 15, 2027	Form 1120 (Schedule G, Schedule K, question 7) with Form 5472; NC CD-405; NC annual report	IRS; NC Department of Revenue; NC Secretary of State

Example (hypothetical numbers, to show the method): In March 2026, Chinese company A and Mr. Wang, a Chinese individual, form US Co in Delaware. A pays $700,000 for 70%; Mr. Wang pays $300,000 for 30%. US Co gets its North Carolina certificate of authority in April and hires three employees there from May. On July 1, 2026, A lends US Co $500,000 at 5% a year, and US Co pays six months' interest of $12,500 on December 31. A also provides management and IT support from China for a $120,000 annual service fee.

The interest withholding: $12,500 × 10% = $1,250. US Co pays A $11,250 and deposits $1,250 with the IRS. If A hadn't given a valid W-8BEN-E, US Co would withhold 30%, or $3,750. And missing this one Form 5472 would start at $25,000, twice the interest paid.

Start with whether the subsidiary is new or has been running for years, what type of entity it is and who owns it, then check which filings have been made. Here are the common situations.

• Situation A: about to set up. The parent finishes ODI first. On the U.S. side, settle the entity type (usually a C corporation) and state, set up the stock ledger, file BE-13 within 45 days, and open payroll accounts before hiring.
• Situation B: running for years, never filed Form 5472 or BE-13. Missing Forms 5472 can be filed under the Delinquent International Information Return Submission Procedures (DIIRSP) with amended 1120s and a reasonable cause statement; the outcome depends on the facts and the IRS (see yclcpa.com/diirsp). For BE-13, follow BEA's instructions and answer any letter on time.
• Situation C: the subsidiary is an LLC. If the parent owns 100%, it files a pro forma 1120 and Form 5472, and the parent may also file Form 1120-F. With two or more owners, it's a partnership by default. Form 8832 can elect C corporation treatment if that fits better.
• Situation D: buying land or farmland, or the business involves critical technology or sensitive data. Have an attorney review CFIUS, AFIDA and North Carolina's farmland law (effective April 2027) before signing.
• Situation E: ownership changes (new capital, share transfers, new shareholders). Update the stock ledger; check for new 25% foreign shareholders and related parties; new foreign investment may trigger another BE-13; update the bank and the IRS responsible party if they change.