An LLC is a US limited liability company that many sellers use to sell on Amazon. If its only member is a foreigner, it normally has to file Form 5472 with a pro forma 1120 every year, even with no income, and the initial penalty for failing to do so is USD 25,000. An LLC also does not remove your tax obligations in your country of residence or EU VAT.
Data reviewed on 1 October 2026. This guide is informational and is not tax advice for your specific case.
What an LLC is and what it is used for in ecommerce
The LLC (Limited Liability Company) separates your personal assets from the company’s and is formed in a US state. For online selling, it is typically used to open a US Amazon seller account, get paid in dollars and work with US payment platforms. Forming one requires, among other things, a registered agent in the state and a tax identification number (EIN).
Annual obligations with a foreign owner
According to industry guides, an LLC with a single foreign owner is treated as a disregarded entity and must file:
- Form 5472, which reports transactions with related parties, including those between the owner and their own LLC.
- A pro forma Form 1120, to which the 5472 is attached, because it cannot be filed alone.
- Usual deadline: 15 April, with a possible extension to 15 October. Check the current date each year.
- Initial penalty for non-compliance: USD 25,000, with possible increases if it continues.
The obligation exists even if the LLC has not invoiced, when there have been transactions with the owner, such as contributions or withdrawals.
What an LLC does not solve
- Your taxes in your country of residence. If you live in Spain, you need to analyse how what you earn through the LLC is taxed in Spain. That depends on your case and should be settled before you operate.
- EU VAT. If you sell to EU consumers from a company outside the EU, you have your own VAT and import obligations. An LLC does not give you access to the EU One-Stop Shop as a European company would.
- Verification on Amazon Europe, which requires the company’s details to match the documents. See our guide to Amazon seller account verification.
LLC or OÜ: quick comparison
| Aspect | US LLC | Estonian OÜ |
|---|---|---|
| Type of company | US company | EU company |
| Natural market | Selling in the US and on US platforms | Selling in the EU, with access to the European VAT regime |
| Annual obligation with a foreign owner | Form 5472 and pro forma 1120 | Bookkeeping and filing of accounts in Estonia |
| EU VAT | Own import and registration obligations | Can declare VAT and OSS from Estonia |
Neither is better in the abstract. It depends on where you sell, where you operate and what you need to draw from the company. For Estonia, read our guide to setting up a company in Estonia to sell online.
When it can make sense and when it may not
It can make sense when:
- Your main market is the US and your platforms are American.
- You need a US bank account and payment gateways.
- You can meet the annual forms every year, even when there is no invoicing.
Think twice when:
- Your main sales are in Europe and you will need EU VAT from day one.
- You expect the LLC alone to reduce your taxes in your country of residence.
- You will not keep bookkeeping or file the annual forms.
Steps to decide
- Define where your customer is: the US, the EU or both.
- Work out the total annual cost: formation, registered agent, bookkeeping, forms and advice.
- Ask for a tax analysis of your residence before forming it.
- Compare with an OÜ if your customer is European.
- Decide with your own numbers.
How Data Biz helps
According to our US LLC page, formation from EUR 299 includes an EIN, a registered agent and a business bank account. We also file the annual 5472 and 1120 forms within our accounting service for your OÜ and LLC. Request a free consultation and we will review which structure fits your business.
Frequently asked questions
Do I have to file the 5472 if my LLC has not invoiced? According to industry guides, the obligation depends on there being a foreign owner and related-party transactions, not on income.
Can I sell on Amazon Europe with an LLC? It is possible, but you will have the VAT and import obligations of selling from outside the EU.
Will an LLC make me pay less tax? Not automatically. Your tax residence and how you operate determine how much you pay and where.
Sources and review
Obligation to file the 5472 with the pro forma 1120, deadline and initial penalty: Muay Tax, Form 5472 for foreign owners. Check deadlines and amounts with the IRS or your adviser. Reviewed on 1 October 2026.
Official sources: IRS, Instructions for Form 5472.
Customer reviews: read what clients say about Data Biz on Trustpilot.
Related guides
- VAT Adviser for Amazon Sellers: What It Should Include and How to Choose One
- EU Ecommerce VAT: One-Stop Shop (OSS), the EUR 10,000 Threshold and Registration by Country
- How to Get a VAT Number in Other European Countries to Sell on Amazon
- VAT Numbers in Europe: Names, Formats and Tax Offices by Country (Germany, France, Italy, Spain, Poland, Czechia, Netherlands, Estonia)
- Setting Up a Company in Estonia (OÜ) to Sell Online: Benefits, Costs and Risks in 2026
- Suspended Amazon Account: How to Prepare a Plan of Action Amazon Can Accept
- Amazon Seller Account Verification: Documents Requested and Why It Gets Rejected