Cross-Border US Tax Help for European Founders & Expats

Yes — almost always. Even a fully inactive US entity that has never had a single customer can have informational filing obligations if it's foreign-owned. A single wire transfer between a foreign owner and the US entity — even to pay a registered agent — can trigger a filing requirement. The trap here isn't the tax owed (usually zero); it's the civil penalty for missing the paperwork, which can reach $25,000 per form. If you incorporated a US entity and "nothing happened," Carolin recommends a compliance check before assuming you're safe. 

Form 5472 is an informational return that foreign-owned US entities must file to report certain transactions with related foreign parties — including things as small as expense reimbursements or paying a registered agent. The penalty for failing to file is $25,000 per missed form, per year, and the IRS enforces it strictly. Many European founders don't know the form exists until Carolin flags it for them. Filing correctly is usually inexpensive; missing it is one of the most common expensive mistakes in cross-border US tax.

There's no universal right answer — it depends on where you're heading, not what's easiest today. A C-Corp is generally preferred if you plan to raise venture capital, join accelerator programs, or want to keep your US business fully separate from your personal tax status. An LLC is more entangled with the individual owner's tax profile, which can pull a foreign founder into US personal filings in ways they didn't expect. The right choice also depends on your existing European entity — whether your US presence functions as a branch or a subsidiary changes everything. This is one of the highest-value first conversations Carolin has with new clients.

Yes — through the Substantial Presence Test, which counts days in the US across the current year plus the two prior years (earlier years at a fraction). A long vacation two years ago combined with heavier travel this year can be enough to tip you over the line. Becoming a US tax resident means the IRS taxes your worldwide income, including European accounts, pensions, ETFs, and life insurance — with reporting obligations that carry heavy penalties. If you're traveling to the US regularly for business, planning a longer stay, or considering relocation, this is a conversation to have before it becomes retroactive.

Usually no — if you plan for it. The US has double-taxation treaties with virtually every major European country, plus mechanisms like foreign tax credits and "effectively connected income" rules that keep the same dollar from being fully taxed twice. What catches founders off guard isn't double taxation itself — it's the personal-side reporting that comes with becoming a US tax person: European ETFs, private pensions, and life insurance policies get treated under punitive US rules that require dedicated planning. The tax bill is usually manageable. The reporting exposure isn't — unless someone maps it early.

Nexus is the connection between your business and a US jurisdiction that makes that jurisdiction believe you owe it taxes. Nexus can be physical (an employee, warehouse, or office) or economic (a threshold of revenue or transactions with customers there). For SaaS and hardware companies, nexus is often triggered without any physical presence — even 200 transactions to a single client can create it. Rules differ by state, county, and even city — a product might be tax-free in Illinois but taxable in Chicago. A nexus analysis maps your actual exposure across jurisdictions so you know where you're required to file and where interstate-commerce rules actually protect you.

Almost certainly yes — and this is where expats get hit hardest. If you become a US tax person, you're required to report foreign financial accounts (FBAR filings), and many European investment vehicles — ETFs, private pensions, life insurance policies, non-US mutual funds — fall under punitive US tax regimes with dedicated informational forms. The value of the account doesn't matter; missing the reporting does. This is the single most under-communicated issue for European expats moving to the US, and it's why relocation planning ideally happens before you land, not after your first US filing season.

No — and often you shouldn't. Rental income from European property can typically stay under your own name and be handled through foreign tax credits, which is far simpler than routing it through a foreign entity. If you own a controlling interest in a foreign business entity after becoming a US person, you may trigger additional reporting requirements (with civil penalties for missing them) and potentially extra US tax. Where possible, keeping things simple under your own name is usually the smoother path — but the right answer depends on the country, the asset, and your personal tax status.

At a Big Four firm, cross-border expertise is typically siloed in an international team with senior specialists — but those teams are staffed for Fortune 500 clients. If you're a founder, SME, or scaleup, you're likely to be routed to the most junior member of the team, and the small details that catch smaller companies off guard often fall through the cracks. A boutique cross-border firm like Hock Tax Services works exclusively with founders, expats, and cross-border clients at your stage — meaning you talk directly to a senior CPA who has seen your exact situation before. For most EU tech companies and expats, this is the right fit.

Ideally, before you incorporate a US entity, relocate, or take your first US customer — not after. The traps in US cross-border tax (entity structure, residency, foreign investment reporting) are cheap to prevent and expensive to unwind. That said, if you're already behind on filings, the US has voluntary disclosure programs that let you come forward without penalties in many cases. The worst move is doing nothing and hoping it stays quiet. The best time to book a consultation is when you're planning your US move; the second-best is right now.

Yes — the majority of her clients are either based in Europe operating in the US, or European expats now living in the US. She speaks German, French, Spanish, and English, and works remotely with founders and expats across time zones.