For Australian nationals investing in a US business on an E-2 visa

E-2 Investors From Australia: Tax on the Business, the Investment and You

An E-2 move from Australia creates two US taxpayers: the company you invest in and, usually within the first year, you. This page sets out both, from official sources, and shows where residence starts.

E-2 treatyForm 1120Form 5472BE-13Tax residence

Request a Quote Residence Rules

Quick answer

Is an E-2 investor from Australia a US tax resident?

Usually yes, once living in the US for most of the year. E-2 is not an exempt-individual category under IRS Pub 519, so your days count under the substantial presence test, and a resident is taxed on worldwide income. If Australia also treats you as resident, Article 4 (Residence) of the treaty breaks the tie. Your company files its own returns: Form 1120, and Form 5472 while it is foreign-owned.

Prepared by Illuminous Accounting · Sources checked November 11, 2026

At a glance

E-2 treaty with Australia: In force since December 27, 1991 (State Department)
Company: US corporation (Form 1120) or LLC; Form 5472 while foreign-owned
Your tax residence: Substantial presence test; E-2 days are not excluded
Treaty tie-breaker: Article 4 (Residence)
Social security agreement: Yes, since October 1, 2002

E-2 from Australia: the basics

Australia is on the State Department list of E-2 treaty countries; the E-2 treaty with Australia entered into force on December 27, 1991 (State Department). USCIS sets out the main conditions (USCIS):

you must be a national of the treaty country;
you must have invested, or be actively investing, a substantial amount of capital in a real, operating US enterprise. USCIS does not state a fixed minimum: the amount is judged against the total cost of the business, and the lower the cost, the higher the proportion expected;
the enterprise may not be marginal, meaning it must have the capacity to earn more than a minimal living for you and your family;
you must be coming to develop and direct it, shown by at least 50% ownership or operational control.

Immigration questions belong with your immigration lawyer. We handle the tax side: the company, the money you put in, and your own US returns.

The company: corporation or LLC

Most E-2 businesses are a US corporation or an LLC.

Corporation: files Form 1120 every year, with or without taxable income (IRS). While a foreign person owns 25% or more, it also files Form 5472 for transactions with related parties, including loans to or from you; the penalty for missing it is US$25,000 (IRS).
LLC: classified under Treas. Reg. section 301.7701-3. One owner means a disregarded entity and two or more a partnership, unless it elects corporate treatment (IRS).
BE-13: generally due within 45 days when a foreign person sets up or buys a US business (BEA rule).

Funding the business

Before you wire money from Australia, decide whether it is equity or a loan and record it that way. While a foreign person owns the company, loans from the owner and interest paid on them are related-party items for Form 5472 (IRS). Clean records also help with the E-2 file, which your immigration lawyer manages.

Ongoing US filings for an investor from Australia

Once you are a US resident you are no longer a foreign person for Form 5472, which the IRS defines as an individual who is not a citizen or resident (IRS). Whether the company still files depends on who else owns it.
Form 1040 on worldwide income every year you are resident, including income from Australia.
FBAR and Form 8938 for accounts you keep in Australia; see FBAR and FATCA and Form 8938.
Form 5471 if you keep control of a company in Australia: a US person controlling more than 50% of a foreign corporation is a Category 4 filer, with a US$10,000 penalty per year for not filing (IRS). See Form 5471.
Funds held in Australia can be PFICs; see PFIC and Form 8621 for how the rules work.

Residence: when the US taxes you on everything

E-2 status does not make you an exempt individual: IRS Pub 519 limits that to foreign government-related individuals, teachers and trainees on J or Q visas, students on F, J, M or Q visas and certain athletes (IRS Pub 519). So your days in the US count under the substantial presence test in Code section 7701(b), and most E-2 investors become US tax residents in the first year they live here. That first year is usually dual-status.

If Australia also treats you as resident, Article 4 (Residence) of the treaty is the tie-breaker; relying on it on a US return needs Form 8833 under Treas. Reg. section 301.7701(b)-7 (IRS).

For social security, the US and Australia have an agreement in force since October 1, 2002 (SSA); a certificate of coverage can keep you in one system (Pub 519).

US withholding on payments to Australia

Timing matters. Paid to you as a nonresident living in Australia, a dividend or interest from the US company is subject to US withholding (30% by statute, lower under a treaty, IRS Pub 515); paid after you become a US resident, it is simply part of your worldwide income.

Payment to a resident of Australia	General treaty rate (IRS Table 1)	Treaty citation
Dividends from a US corporation	15%	Article 10(2)
Interest on a loan you made to the company	10%	Article 11(2)

Rates from IRS Tax Treaty Table 1 (Rev. May 2023). The IRS notes the table is not a complete guide to eligibility; the treaty's conditions, including any limitation on benefits, must be met. Once you are a US resident these rates no longer apply to you.

Sources for E-2 investors from Australia

Treaty

The IRS lists the 1982 income tax treaty, amended by a 2001 protocol. General effective date (IRS Table 3): treaty Dec. 1, 1983; protocol Jan. 1, 2004 (IRS treaty documents for Australia; treaty text; IRS Table 3).
Residence and tie-breaker: Article 4 (Residence).
Article 7 (Business Profits), business profits.
Article 10 (Dividends), dividends.
Article 22 (Relief from Double Taxation), relief from double taxation.

US law and E-2 rules

E-2 status: State Department treaty countries (E-2 with Australia in force since December 27, 1991); USCIS E-2 Treaty Investors, 8 CFR 214.2(e).
Tax residence: Code section 7701(b) (Pub 519). Treaty residence: Treas. Reg. section 301.7701(b)-7 and Form 8833 (IRS).
Company filings: Code section 6038A and Treas. Reg. section 1.6038A-1 for Form 5472 (IRS); Treas. Reg. section 301.7701-3 entity classification (IRS); 15 CFR 801.7 BE-13 (eCFR).
Foreign companies you control: Form 5471 (IRS).

The tax rules of Australia on leaving or keeping assets there also apply; a local adviser covers that side.

How we help

We set up the tax side of an E-2 move from Australia: the company's yearly returns and Form 5472, the BE-13, and your dual-status first year and resident returns after it. Gurleen Kaur, CPA (BC and Washington), signs. You get a written quote before any work.

E-2 investors from other countries

All countries: E-2 investor tax by country. From Canada: E-2 taxation for Canadian founders. Moving without an E-2: moving to the US, by country.

Common questions

How much must an E-2 investor from Australia invest?

USCIS does not set a fixed minimum. The investment must be substantial in relation to the total cost of the business, and the lower the cost, the higher the proportion expected. The enterprise may not be marginal. Your immigration lawyer advises on this.

Does an E-2 investor from Australia pay US tax on worldwide income?

Usually yes, once resident. E-2 is not an exempt-individual category, so the substantial presence test applies, and a US resident is taxed on worldwide income from the residency starting date.

What if Australia also treats me as resident?

Article 4 (Residence) of the treaty decides residence for treaty purposes; claiming it on a US return needs Form 8833.

Does the E-2 company file Form 5472?

A US corporation that is 25% or more foreign-owned files Form 5472 with Form 1120, and a single-member LLC files it while its owner is a foreign person. Once you are a US resident you are no longer a foreign person for this purpose.

Sources

Every rule and figure on this page links to the IRS, CRA or other official source it comes from. Amounts change; we re-check them before each engagement.

Gurleen Kaur, CPA licensed in British Columbia and Washington State. Last updated November 11, 2026. This page is general information, not tax or legal advice for your situation.

E-2 investor from Australia? Request a quote

Tell us your situation in a few lines. We confirm whether we can help, what records matter and the next step. Substantive advice begins under a paid diagnostic or signed engagement.

Prepared and signed by a licensed US CPA who can represent you before the IRS. Verify Gurleen Kaur's Washington licence (#41150) on CPAverify

Call +1-778-325-0564 [email protected]

Name

Phone optional

Service needed

Briefly describe what you need

How did you find us? optional

By submitting, you agree that Illuminous Accounting may use this information to respond to your inquiry. Please do not include account numbers or other sensitive documents. If we work together, documents come in through our secure client portal, never by email. Read our privacy notice.