For founders outside the US, last checked October 30, 2026
Foreign-Owned Delaware C-Corp: Form 1120, Form 5472 and Franchise Tax
Many founders from India, Canada and elsewhere form a Delaware C-corporation because investors expect one. It brings more yearly filings than a single-member LLC: a full corporate tax return, Form 5472 for transactions with foreign owners, and Delaware's franchise tax and annual report.
Quick answer
What does a foreign-owned Delaware C-corp file each year?
At least three things. Form 1120, the corporate tax return, which a US corporation files whether or not it has taxable income (IRS). Form 5472, attached to it, for each foreign related party the company had reportable transactions with, if a foreign person owns 25% or more (IRS). And Delaware's annual report (US$50) plus franchise tax by March 1, where the minimum is US$175 under the authorized shares method or US$400 under the assumed par value capital method (Delaware). Dividends paid to a foreign shareholder also need withholding and Forms 1042 and 1042-S.
The yearly filings
| Filing | What it is | Due | Source |
|---|---|---|---|
| Form 1120 | Corporate income tax return, filed even with no taxable income; can generally be e-filed | 15th day of 4th month after year end; Form 7004 gives generally 6 more months to file, not to pay | IRS |
| Form 5472 | One per foreign or US related party with reportable transactions, when a foreign person owns 25%+; attached to Form 1120 | With Form 1120, including extensions | IRS |
| Delaware annual report and franchise tax | US$50 report; tax from US$175 (authorized shares) or US$400 (assumed par value capital), up to US$200,000 | March 1 | Delaware |
| Forms 1042 and 1042-S | Withholding on dividends to foreign shareholders: 30% or the treaty rate; reported even if a treaty exempts it | When dividends are paid | IRS |
| BE-13 Claim / BE-12 | BE-13 within 45 days of forming with a 10%+ foreign owner; BE-12 benchmark survey every five years (years ending in 2 and 7) | 45 days / survey year | 15 CFR 801.7 |
Delaware franchise tax: why the bill can look huge
Delaware's default notice is often calculated with the authorized shares method, which can produce a very large figure for a startup with millions of authorized shares. Delaware says to use whichever method gives the lesser tax, and that the tax is never less than US$175 or more than US$200,000. The assumed par value capital method uses the company's gross assets (from Form 1120, Schedule L) and issued shares, so you need those figures ready when you file (Delaware calculation guide).
Missing it costs a US$200 penalty plus 1.5% interest a month, and a corporation that does not pay for a year can have its charter declared void. It can be revived by filing a certificate of revival and paying what is owed (Delaware).
Paying yourself as a foreign shareholder
Dividends a US corporation pays to a nonresident shareholder are subject to 30% withholding unless a treaty lowers it, claimed on Form W-8BEN. Under the treaty tables, the general dividend rate is 15% for Canada and 25% for India; the lower direct rate (5% Canada, 15% India) generally applies to a foreign parent company owning about 10% of the voting stock, not to an individual founder (IRS treaty table). The corporation reports the payment on Forms 1042 and 1042-S even when the treaty exempts it. Your home country's tax on the dividend, and any Indian or Canadian reporting of the shares, are separate; Indian rules such as overseas investment approvals are outside a US CPA's licence.
Related
Formed through a platform? See what your formation service may not file. Single-member LLC instead? See annual compliance for foreign-owned LLCs. Missed a 5472? See Form 5472 penalties.
Common questions
Does a Delaware C-corp with no revenue still file Form 1120?
Yes. The IRS says domestic corporations must file an income tax return whether or not they have taxable income.
When does a C-corp file Form 5472?
When a foreign person owns at least 25% of the voting power or value and the corporation had reportable transactions with a foreign or US related party. A separate Form 5472 is filed for each related party, attached to Form 1120.
Why is my Delaware franchise tax notice so high?
It is often calculated with the authorized shares method. Delaware lets you use the assumed par value capital method instead, and to pay whichever is less. You need total gross assets and issued shares to use it.
What happens if I don't pay Delaware franchise tax?
There is a US$200 penalty and 1.5% monthly interest, and after a year unpaid the charter can become void. A void corporation can be revived by filing a certificate of revival and paying back taxes, penalties and interest.
How are dividends to me taxed in the US?
The corporation withholds 30%, or the treaty rate if you give a valid Form W-8BEN, and reports it on Forms 1042 and 1042-S. For individual founders the treaty general rate is usually 15% for Canada and 25% for India.
Does the company file a BOI report?
Not if it was formed in the US. FinCEN exempted US-formed companies, effective under its final rule on August 14, 2026.
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.
- IRS: Instructions for Form 1120
- IRS: Instructions for Form 7004
- IRS: Instructions for Form 5472
- Delaware Division of Corporations: Franchise taxes and annual report
- Delaware Division of Corporations: How to calculate franchise tax
- IRS: Withholding and reporting on US-source income paid to nonresident aliens
- IRS: Tax treaty table 1 (withholding rates)
- 15 CFR 801.7: BE-13 survey rules (eCFR)
- FinCEN: Beneficial ownership information
Gurleen Kaur, CPA licensed in British Columbia and Washington State. Last updated October 30, 2026. This page is general information, not tax or legal advice for your situation.
Related guides: Form 5472, Form 5472 penalties, What formation services may not file, Do I need a Delaware LLC?, Annual fees by state.
Foreign-owned C-corp? Get your yearly filings handled
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