U.S. LLC for International Payments: Brazilian Rules

A U.S. LLC can receive payments from clients abroad, but a Brazilian member remains subject to Brazilian law. In the US, a single-member LLC owned by a foreign person files Form 5472 with the IRS. In Brazil, Law 14,754, IN RFB 1,037, Law 14,286 and, from US$ 1 million abroad, the CBE apply.

How does a U.S. LLC receive international payments?

The LLC is the legal entity that contracts with the client and receives the money in the account opened in its name. This changes who signs the contract and where the money sits, but it does not change the member's tax residency. Anyone living in Brazil remains subject to Brazilian taxation on the profits and dividends the LLC generates.

This guide covers what comes after formation: receiving payments, IRS obligations and Brazilian rules. For setting up the company, use the guide to a Delaware LLC for Brazilians or the Wyoming vs. Delaware comparison. If the business is subscription software, see LLC for SaaS. If it is an online store, see LLC for e-commerce.

What does an LLC with a Brazilian member have to file with the IRS?

If the LLC has a single member who is neither a U.S. citizen nor a U.S. resident, the IRS instructions call it a "foreign-owned U.S. disregarded entity": a domestic entity ignored for income tax purposes, wholly owned by a foreign person. According to the IRS, a single-member entity can be disregarded as separate from its owner or elect to be treated as a corporation (Form 8832).

Even without its own income tax return, this LLC has an information reporting obligation. The Form 5472 instructions (revision 12/2024) say it must:

1. •File a pro forma Form 1120, completing only the name, the address and items B and E on the first page, with "Foreign-owned U.S. DE" written at the top.
2. •Attach Form 5472, which reports the transactions between the LLC and the foreign member.
3. •Meet the Form 1120 deadline, including extensions requested on Form 7004.
4. •Send it by fax or mail to the dedicated address indicated by the IRS, because this entity cannot file Form 5472 electronically.

Member contributions to the LLC and distributions from the LLC to the member go in Part V of the form. Filing is waived only if there was no reportable transaction during the year. The penalty for failing to file, or for failing to keep the required records, is US$ 25,000. If the failure continues for more than 90 days after the IRS notifies you, there is another US$ 25,000 for each 30-day period.

If the LLC has more than one member, the classification and the obligations change. In that case, ask a U.S. accountant to review it before any filing.

On the BOI report, the FinCEN page states that the final rule of August 11, 2026 exempts U.S. companies from the reporting obligation. Check the page before acting, because the text may be updated.

Does Brazil's Federal Revenue Service treat a Brazilian's LLC as a privileged tax regime?

It can. Art. 2, VII, of IN RFB 1,037/2010 includes among privileged tax regimes the one applicable to "legal entities formed as state Limited Liability Companies (LLC), whose ownership consists of non-residents, not subject to federal income tax". The US is not listed as a country in art. 1 of the same rule; the reference to the LLC appears only in art. 2.

The general definition of a privileged tax regime is in art. 24-A of Law 9,430/1996. The consequence for LLC owners comes from Law 14,754/2023:

• •Controlled entity: the LLC is controlled by the individual who holds more than 50% of the capital or profits, or who has the upper hand in decisions. The law refers to entities "with or without legal personality" (art. 5, § 1).
• •When art. 5 applies: a controlled entity that benefits from a privileged tax regime, or whose own active income is below 60% of total income, is subject to that regime (art. 5, § 5).
• •Taxation: profits are determined in an annual balance sheet, converted at the Central Bank's selling rate on the last business day of December and included in the annual adjustment return on December 31, with no need for a distribution (art. 5, § 10).
• •Rate: 15% on the annual portion of income, with no deductions from the tax base (art. 2, § 1).
• •No double taxation of what was already taxed: profit already taxed on December 31 and later distributed is not taxed again (art. 5, § 11). Tax due abroad may be deducted under the conditions of § 15.

Outside art. 5, what the individual receives from the controlled entity is declared as profits and dividends of a controlled entity, also at 15% (art. 2, caput and § 1). Whether your LLC falls under art. 2, VII, depends on its ownership composition and its IRS classification. Validate your case with an accountant before filing.

How do you bring the LLC's money to Brazil under Law 14,286?

Through a foreign exchange transaction at an institution authorized by the Central Bank. Law 14,286/2021 allows foreign exchange transactions "freely, with no limit on value" (art. 2), but only through institutions authorized to operate in that market (art. 3).

BCB Resolution 279/2022 reinforces this point for Brazilian capital abroad. Financial transfers related to it must be processed through an institution authorized to operate in the foreign exchange market (art. 6). Documentation of flows and stocks must be kept for 10 years (art. 3, sole paragraph).

In practice, keep the following for each remittance:

• •the contract or invoice that originated the LLC's revenue;
• •the LLC's account statement;
• •the record of the distribution to the member, which also goes into Form 5472;
• •the foreign exchange contract and the proof of the transaction.

The explanation of what to declare on your income tax return is in the guide How to declare an offshore company on your Brazilian income tax return.

When does an LLC require filing the CBE?

When total Brazilian capital abroad reaches US$ 1,000,000.00 on December 31. BCB Resolution 279/2022 requires reporting, among other items, equity interests in non-resident companies and deposits at non-resident institutions (art. 7, I and VI), as well as export revenue kept abroad and how it is used (art. 7, § 1, I).

The annual declaration applies to anyone who, on the December 31 base date, holds US$ 1,000,000.00 or more (arts. 8 and 10). The calculation covers the declarant's total assets abroad, not just the LLC.

According to the CBE page at the Central Bank, the annual deadline runs from February 15 to April 5 of the following year, and the penalty for failing to file ranges from BRL 2,500.00 to BRL 250,000.00.

What should you check about Stripe, PayPal and banks before opening the LLC?

Check each company's official rules. Payment processors and banks set their own onboarding, documents, supported countries, fees and payout timing, and these items change. This article does not describe them because it does not cite an official source from the company itself for any of them.

Before forming the LLC, read the provider's official documentation and confirm:

• •whether it accepts a company whose member lives in Brazil;
• •which LLC documents it requires;
• •in which currency and into which account the payout is made;
• •how the money moves from the LLC's account to you.

For the account structure, see the offshore banking service.

What is the step-by-step process for organizing how you receive payments?

1. •Define where the revenue comes from. Law 14,754, art. 5, § 6, excludes royalties, interest, rents and financial investments, among other items, from own active income.
2. •Form the LLC. Use the Delaware guide or the comparison with Wyoming.
3. •Confirm the IRS classification. Disregarded entity or check-the-box (Form 8832).
4. •Choose the payment provider and the bank based on each one's official documentation.
5. •Record every contribution and every distribution. They feed Form 5472.
6. •File the pro forma Form 1120 with Form 5472 on time, by the means the IRS accepts.
7. •Bring the money in through an authorized foreign exchange transaction and keep the documentation for 10 years.
8. •In Brazil, declare under Law 14,754 and assess the CBE.

To fit all of this into your tax planning, see the tax planning service and the corporate structures service.