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

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

Investing in a US business from Denmark on an E-2? The visa is about immigration, but the tax questions start the day you fund the company: which entity, how the money goes in, and when the US starts taxing you on everything.

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

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Quick answer

Is an E-2 investor from Denmark 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 Denmark 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 Denmark: In force since December 10, 2008 (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, 2008

The E-2 treaty with Denmark

The E-2 route for Denmark rests on a treaty that has been in force since December 10, 2008 (State Department list). According to USCIS, the investor must be a Danish national (for this treaty), must put a substantial amount of capital at risk in a real US business, must not be running a marginal enterprise, and must hold at least 50% or operational control. There is no published minimum amount (USCIS).

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

Which entity, which filings

Choice	Yearly federal filing	Source
US corporation	Form 1120; plus Form 5472 while 25% or more is owned by a foreign person	IRS, IRS
Single-member LLC	Disregarded by default; Form 5472 with a pro forma 1120 while the owner is a foreign person	IRS
LLC with two or more owners	Partnership by default (Treas. Reg. 301.7701-3): Form 1065	IRS
Any new US business set up by a foreign person	BE-13, generally within 45 days	BEA rule

Are you a US tax resident on an E-2 from Denmark?

This is where E-2 investors from Denmark are most often surprised. The visa is nonimmigrant, but tax residence is decided only by Code section 7701(b), and E-2 days are not excluded (IRS Pub 519). Live here most of the year and you are a US resident, taxed on worldwide income from your residency starting date. If Denmark 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 Denmark have an agreement in force since October 1, 2008 (SSA); a certificate of coverage can keep you in one system (Pub 519).

Funding the business

Before you wire money from Denmark, 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.

Dividends and interest while you live in Denmark

Before you move, or in any year you are not a US resident, money the US corporation pays you is taxed by withholding. The statutory rate on US-source dividends and interest paid to a nonresident is 30% unless a treaty lowers it (IRS Pub 515).

Payment to a resident of Denmark	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	0%	Article 11(1)

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.

Once you are resident: the yearly list

Form 1040 on worldwide income every year you are resident, including income from Denmark.
FBAR and Form 8938 for accounts you keep in Denmark; see FBAR and FATCA and Form 8938.
Form 5471 if you keep control of a company in Denmark: 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 Denmark can be PFICs; see PFIC and Form 8621 for how the rules work.
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.

Where the rules come from

Treaty

The IRS lists the 1999 income tax treaty, amended by a 2006 protocol. General effective date (IRS Table 3): treaty Jan. 1, 2001; protocol Jan. 1, 2008 (IRS treaty documents for Denmark; treaty text; IRS Table 3).
Residence and tie-breaker: Article 4 (Residence).
Article 7 (Business Profits), business profits.
Article 10 (Dividends), dividends.
Article 23 (Relief from Double Taxation), relief from double taxation.

US law and E-2 rules

E-2 status: State Department treaty countries (E-2 with Denmark in force since December 10, 2008); 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 Denmark on leaving or keeping assets there also apply; a local adviser covers that side.

How we help

Gurleen Kaur, CPA licensed in British Columbia and Washington State, prepares the E-2 company's returns (Form 1120 or the LLC filings, Form 5472, BE-13) and your own first-year and ongoing US returns. Immigration filings stay with your lawyer. Written quote first.

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 Denmark 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 Denmark 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 Denmark 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.

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