SaaS & Software Business TaxAnswered

All my app servers are in Virginia, but I run the company from Hong Kong. Is that enough for U.S. tax?

CH
carmen_hk_f8bfnew member
July 24, 2024 1,610 views 1 answer
awsvirginiahong-kongapieciform-5472

I am based in Hong Kong and run an AI API business through a Delaware LLC. We do about $150,000 per year and all infrastructure is on AWS us-east-1 for latency reasons. No employees or contractors are in the U.S. and I have not visited the U.S. this year.

I keep hearing mixed opinions about whether U.S.-based servers alone create effectively connected income or a U.S. trade or business. I understand I likely still have Form 5472 because of owner funding, but I do not know whether the Virginia hosting changes anything beyond that.

Related Questions

SaasAnsweredFeatured

My German SaaS LLC has U.S. customers and a U.S. freelance closer. Did I create ECI?

I live in Berlin and own a Wyoming single-member LLC that sells workflow software to U.S. companies. Revenue is now about $240,000 per year. I write the code and manage the company from Germany, but I...

LD
lena_de_0310·Jun 19, 2024
2,8401
SaasAnswered

People keep telling me to claim the R&D credit, but my LLC is disregarded and barely has U.S. tax. Is that advice even aimed at me?

I am in Canada and run a software startup through a New Mexico LLC. The engineering team is in Toronto and Montreal, and we are still early enough that my U.S. filing picture is mostly Form 5472 and b...

S0
sophie_0901·Feb 27, 2025
1,7151
SaasAnswered

A U.S. reseller wants to collect from my customers and pay my LLC. Is that cleaner or riskier for tax?

I live in Germany and my SaaS product is sold to manufacturing clients. A U.S. reseller wants to invoice U.S. customers directly and then pay my LLC after keeping its margin. From a commercial point o...

MU
mila_us_b841·Feb 22, 2025
1,8601
SaasAnsweredFeatured

I formed a Delaware SaaS LLC with Stripe Atlas from India. If I have no U.S. office, is Form 5472 my only filing?

I am based in Bangalore and formed a Delaware single-member LLC through Stripe Atlas in early 2024 for a B2B SaaS product. We are around $90,000 ARR, with about 70% of customers in the U.S. and the re...

AI
arjun_in_2888·Jun 12, 2024
3,9201
SaasAnswered

I hired a U.S. sales engineer for demos. Did my foreign-owned SaaS LLC become a U.S. business?

I live in Dubai and own a Delaware LLC for an API SaaS business doing around $420,000 annual revenue. I recently hired a part-time sales engineer in Texas as an independent contractor. He joins enterp...

YD
yousef_d7d0·Jul 17, 2024
1,7601
SaasAnsweredFeatured

My Atlas LLC has almost no revenue yet. Can I skip U.S. filing for the first year?

I am in Lagos and formed a Delaware LLC through Stripe Atlas for a micro-SaaS project. Revenue in 2024 is maybe $8,000 and most of that came late in the year. Before that, I personally paid for format...

TN
tolu_ng_3a60·Jul 30, 2024
1,8901
SaasAnsweredFeatured

My SaaS contract has a $12,000 setup fee and $1,200 monthly subscription. Do I analyze the tax the same way?

I live in India and own a Delaware LLC that sells workflow software to U.S. companies. One new client agreed to pay a one-time $12,000 implementation fee plus $1,200 per month after launch. I do all o...

AE
arjun_ee8e·Feb 11, 2025
2,1401
SaasAnswered

I signed a renewal in Texas on the last day of a U.S. trip. Is that the kind of fact I need to flag separately?

I live in Australia and usually sell my software remotely through a Delaware LLC. I spent one week in Texas meeting an existing client and, on the last day, signed a renewal expansion that added anoth...

ED
ethan_d941·Mar 3, 2025
1,4901
SaasAnsweredFeatured

I flew to New York for demos and signed two SaaS deals there. Did I just create a much bigger U.S. tax problem?

I am based in the UK and run a small B2B SaaS company through a Wyoming LLC. Last month I spent six days in New York, met prospects in person, and signed two annual contracts worth about $48,000 total...

DU
daniel_us_49d5·Feb 17, 2025
2,4351
SaasAnswered

Stripe and PayPal keep asking for tax status on my LLC. Should I be giving W-9 or W-8 paperwork?

I am a Brazilian founder with a New Mexico single-member LLC selling a small SaaS product. Gross receipts are around $65,000 and I use both Stripe and PayPal. I do not have a U.S. SSN or ITIN, but the...

MB
mateus_br_119a·Jun 27, 2024
2,5101

Have a similar question?

ForeignLLCTax members get expert answers with IRS citations. One CPA consultation costs $200+. Full access is $9.99/month.

Become a Member — $9.99/mo

Disclaimer: All content on ForeignLLCTax.com is created by a tax professional and is provided for general educational and informational purposes only. It does not constitute tax, legal, or accounting advice, and should not be relied upon as such. Every tax situation is different — for advice specific to your circumstances, please consult a licensed CPA, Enrolled Agent, or tax attorney. By using this website, purchasing a subscription, or accessing any tools or services, you acknowledge that no client-professional relationship is established between you and ForeignLLCTax.com or its operators. This website is not affiliated with the IRS.

Watch the walkthroughs