Glossary

Plain-English definitions of the technical terms used across the OpenVentro wiki. We define each term once here, link to it inline on the page where it first appears, and aggregate the page's terms in a footer rail at the bottom of each article. The definitions are short; the deeper guides are linked where they exist.

This is the starting set. It grows as the wiki grows.

Tax and filing

Anson ruling. HMRC v. Anson [2015] UKSC 44. The UK Supreme Court ruling that the tax treatment of a US LLC for a UK-resident member depends on whether the operating agreement gives the member a direct claim to profits, not just on the LLC's US characterization. Used in this wiki as shorthand for the case-by-case nature of UK LLC treatment. See the tax-cautionary cluster and the UK verdict page.

BOI (Beneficial Ownership Information). A US reporting requirement under the Corporate Transparency Act, administered by FinCEN, that requires reporting entities to disclose beneficial-owner information. The rule's scope and exemptions for foreign-owned entities have shifted post-2024; verify current treatment with a US attorney.

CFC (Controlled Foreign Corporation). A home-country tax concept that attributes income of a foreign-controlled entity to the resident owner, often regardless of distribution. Mechanism varies by country (Germany Hinzurechnungsbesteuerung, Brazil RFP framework, etc.). Treatment of US LLCs as CFCs depends on the home country's classification of the LLC.

COSIT 56/2026. Solução de Consulta COSIT nº 56/2026. A 2026 Brazilian Receita Federal ruling that reclassified US LLCs held by Brazilian-resident partners as falling under the Privileged Tax Regime (RFP), triggering 15% IRPF on undistributed LLC profits annually. Closed the historic timing advantage Brazilian residents enjoyed when holding US LLCs. See the Brazil verdict page.

Disregarded entity. A US federal income tax classification: a single-member LLC that is not treated as a separate taxable entity from its owner. Income and expenses are reported on the owner's tax return (Form 1040 for US individuals; Form 1040-NR for non-resident-individual owners). Filing obligations like Form 5472 still attach to the LLC.

EIN (Employer Identification Number). A US tax identification number issued by the IRS to entities. Required for opening US business bank accounts, onboarding to payment processors, filing US tax returns. Foreign applicants without a US Social Security Number apply by fax or mail using Form SS-4; documented service time is roughly 4–6 weeks but practical observed times are often longer.

Form 5472. The IRS form foreign-owned single-member US LLCs file annually under Internal Revenue Code section 6038A. Reports transactions between the LLC and its foreign owner. Filed with a pro-forma Form 1120. Penalty for missed or late filing: $25,000 per failure. See The Form 5472 trap most non-US LLC owners don't know exists.

Hinzurechnungsbesteuerung. German CFC framework under the Außensteuergesetz (AStG). Attributes income of certain foreign entities to German-resident controllers regardless of distribution. Application to US LLCs depends on facts and on the eight-factor entity-classification test. See the Germany verdict page.

Hybrid-mismatch. A situation where two jurisdictions characterize the same entity differently — one as transparent (income flows through to the owner), the other as opaque (income stays at the entity level). Produces double taxation, foreign-tax-credit denial, or both. The Canada / US LLC dynamic is the textbook example covered in this wiki. See the Canada verdict page.

Modelo 720. Spanish reporting form for foreign-held assets and accounts above thresholds. Penalty regime has been litigated. Spanish residents holding US LLCs are typically within scope.

Privileged Tax Regime (RFP). Regime fiscal privilegiado. Brazilian framework set out in Receita Federal Instrução Normativa 1.037/2010 for classifying foreign jurisdictions and structures as privileged. COSIT 56/2026 brought US LLCs held by Brazilian residents into this framework.

Quadro RW. Italian reporting form for foreign-held assets and investments. Italian residents holding US LLCs are typically within scope.

Formation and operations

Disregarded entity. See "Tax and filing" above.

Doola. A US LLC formation service that offers bundled formation, compliance, and banking-introduction services. Cited on this wiki as the prototypical example of bundled-convenience pricing whose advertised starter price ($297) understates the multi-year total cost (~$6,474 on the Total Compliance plan over 3 years). See the formation-services comparison.

Mercury. A US fintech-fronted business banking provider that onboards foreign-owned US LLCs that pass its know-your-customer review. Account number is a US ABA-routable account. Onboarding is not guaranteed; some applicants are denied.

New Mexico LLC. A US LLC formation in the state of New Mexico. Cited on this wiki as the cheapest defensible filing state for non-US founders due to low filing fees and minimal annual reporting obligations. Often used as the DIY-path baseline against bundled-service pricing.

Northwest Registered Agent. A US registered-agent and formation service. Documented in this wiki as one of the credible affiliate-partner providers; advertised registered-agent service typically $125–$200 per year as of last verification.

Registered agent. A US person or service designated to receive legal correspondence on behalf of an LLC in its state of formation. Required for every US LLC. Pricing ranges from $35 per year (low-cost services) to $300 per year (full-service providers with mailbox forwarding and compliance reminders).

Total Compliance. doola's bundled annual subscription that includes the parts of US LLC compliance the starter package does not. Cited on this wiki for its multi-year pricing escalation (~$1,500/year on top of formation fees).

Wise Business. A multi-currency business banking and payments service. Supports US-account routing for foreign-owned US LLCs. Not a card-acquiring service; serves outbound payments and multi-currency holding.

Sanctions and compliance

OFAC (Office of Foreign Assets Control). US Treasury department enforcing US economic and trade sanctions. Maintains specially-designated-nationals (SDN) lists, country-program restrictions, and licensing regimes. Relevant for residents of countries in the defensive cluster.

FinCEN. US Financial Crimes Enforcement Network. Administers the Bank Secrecy Act and the Corporate Transparency Act / BOI rule.

FEMA (Foreign Exchange Management Act). India's framework regulating foreign-exchange transactions and foreign-held assets by Indian residents. Liberalised Remittance Scheme (LRS) sits within it. Affects India-resident founders forming US LLCs. See the credibility cluster.

What's missing

This glossary covers the terms used in current published wiki content. Terms used in upcoming country verdict pages and customizer-output text get added as those ship. If a term you saw on the site is not defined here, contact us and we will add it.

This page was last updated 2026-05-28. Glossary grows with the wiki.

Last updated 2026-05-28.