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

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

An E-2 move from Sweden 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

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Quick answer

Is an E-2 investor from Sweden 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 Sweden 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 Sweden: In force since February 20, 1992 (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 January 1, 1987

What USCIS looks for

E-2 condition (USCIS)	In short
Nationality	You must be a national of a treaty country; Sweden's E-2 treaty has been in force since February 20, 1992 (State Department)
Substantial investment	Capital at risk in a bona fide enterprise; no fixed minimum, judged against the cost of the business
Not marginal	The business must be able to earn more than a minimal living for the investor and family
Develop and direct	At least 50% ownership or operational control
Stay	Up to two years at a time, with extensions in increments of up to two years

Sources: State Department treaty countries, USCIS E-2 page.

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).

Residence clarity for E-2 investors

Question	Answer for an E-2 investor from Sweden
Are E-2 days excluded?	No. E-2 is not an exempt-individual category in IRS Pub 519
When do I become a US tax resident?	When you meet the substantial presence test (31 days this year, 183 weighted days over 3 years), usually in your first full year
The first year	Usually dual-status: nonresident before the residency starting date, resident after
Resident in both countries?	Article 4 (Residence) of the treaty decides; Form 8833 discloses the position
Social security	Agreement in force since January 1, 1987

Sources: IRS Pub 519, Form 8833, SSA.

Capital or loan

The money you bring from Sweden can go in as capital (shares or membership interest) or as a loan to the company. For tax reporting, the difference matters: while the company is foreign-owned, loans from you, the balance outstanding and any interest are related-party transactions on Form 5472 (IRS). Keep a loan agreement and bank records for every transfer.

US withholding on payments to Sweden

Timing matters. Paid to you as a nonresident living in Sweden, 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 Sweden	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 Sweden.
FBAR and Form 8938 for accounts you keep in Sweden; see FBAR and FATCA and Form 8938.
Form 5471 if you keep control of a company in Sweden: 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 Sweden 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.

Sources for E-2 investors from Sweden

Treaty

The IRS lists the 1994 income tax treaty, amended by a 2005 protocol. General effective date (IRS Table 3): treaty Jan. 1, 1996; protocol Jan. 1, 2007 (IRS treaty documents for Sweden; 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 Sweden in force since February 20, 1992); 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 Sweden 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 Sweden: 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

What counts as a substantial E-2 investment from Sweden?

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 Sweden 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 Sweden 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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