If you are not a US person, FBAR almost never applies to you, even though you own a US LLC with a US bank account. FATCA works in the opposite direction and mostly affects banks outside the US, not the LLC itself. This guide walks through both rules in plain terms and points to what you likely do face instead.
What FBAR actually covers
FBAR stands for Report of Foreign Bank and Financial Accounts. It requires certain US persons to report foreign financial accounts to FinCEN each year if the combined value crosses a set threshold at any point in the year. Two things matter here.
First, FBAR only looks at foreign accounts. A US bank account held by your US LLC at a bank like Mercury, Wise Business, or Relay is a US account, not a foreign one. So even if FBAR applied to you personally, that particular account would not be the kind of account it covers.
Second, FBAR only applies to US persons. If you are not a US person, the filing does not apply to you at all, regardless of what accounts you hold.
Who counts as a US person
This is the part that trips people up. A US person for this purpose generally includes:
- US citizens, wherever they live
- Green card holders (lawful permanent residents)
- People who meet the substantial presence test and count as US resident aliens for tax purposes
- US-formed entities, including certain LLCs, depending on how they are classified
If you are a founder living outside the US, without a green card, and you do not meet the substantial presence test, you are generally not a US person. That means FBAR is not something you need to file, even though your LLC is a US entity with a US bank account.
There is a nuance worth naming rather than glossing over. Rules around residency tests and entity classification can shift, and individual circumstances vary. If you are unsure whether you meet the substantial presence test, or if you have other US ties, check the current guidance or ask a licensed tax professional before assuming either way.
How FATCA is different
FATCA, the Foreign Account Tax Compliance Act, does not ask non-US persons to file anything with the IRS directly. Instead, it requires foreign financial institutions to identify and report accounts connected to US persons. This obligation sits with the bank, not with you.
Here is the practical effect for a foreign founder. If you hold a bank account in your home country, and that account is connected to a US LLC or shows US indicia in some way, your home bank may ask you for a tax residency declaration or similar form as part of its own FATCA compliance. That is the bank checking its own reporting duty. It is not you filing a FATCA report, because there is no such filing for individuals.
Quick comparison
| Rule | Who it applies to | What it covers | Who files |
|---|---|---|---|
| FBAR | US persons | Foreign financial accounts above the threshold | The individual or entity, to FinCEN |
| FATCA | Foreign financial institutions | Accounts connected to US persons | The bank, to the IRS, not the account holder directly |
What a foreign-owned LLC may face instead
Since FBAR and FATCA mostly do not land on you directly, here is what usually does apply when you own a US LLC as a non-resident.
Bank KYC at account opening. When you open a business account with Mercury, Wise Business, or Relay after getting your EIN, the bank runs its own know-your-customer checks. This is standard practice for any new business account and is separate from FBAR or FATCA. Approval is always the bank's decision, and requirements vary by bank.
Form 5472 with a pro forma 1120. If your LLC is foreign-owned and treated as a disregarded entity, the IRS requires an information return, Form 5472, filed together with a pro forma Form 1120, by April 15 each year. This is not an income tax return in the usual sense, it is an information filing about transactions between the LLC and its foreign owner. Missing this filing carries real penalties, so it is worth treating as a firm deadline.
BOI reporting. Under the current interim FinCEN rule effective for 2026, companies formed in the United States are exempt from beneficial ownership information reporting. Rules like this can be revisited, so it is worth checking FinCEN's site periodically rather than assuming the exemption is permanent.
Home-country foreign-account rules. Many countries have their own version of account reporting for residents who hold interests abroad, sometimes tied to systems like the Common Reporting Standard. Since these rules vary widely by country and change over time, this guide will not describe specific dollar figures or country rules. Check your home country's tax authority site for what applies to a US LLC interest or a connected US bank account.
A word on getting this wrong
Filing FBAR when it does not apply, or skipping Form 5472 because you assumed FBAR-style rules covered it, are both easy mistakes. The two systems are unrelated in terms of who files what, even though they sound similar and often get mentioned in the same breath online.
This guide is general information, not tax advice for your specific situation. Your residency status, the classification of your LLC, and your home country's rules all affect what actually applies to you.
What to do next
If you already have a PowerLaunch plan, the Run and Scale plans include a licensed tax professional consultation and cover the annual Form 5472 and pro forma 1120 filing as part of your IRS tax filings, so this is a conversation worth having early rather than close to the deadline.
If you have not formed your LLC yet, or you want to talk through your specific residency situation before deciding on a plan, book a free 20-minute consultation at powerlaunch.solutions/book. You can also start directly at powerlaunch.solutions/signup, or reach out through contact@powerlaunch.solutions if you have questions first.
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