A US green card makes you a US tax resident from the first day you enter as a permanent resident, and US tax residents are taxed on worldwide income wherever it is earned and wherever it stays. Your factory in Ho Chi Minh City and your holding company in Cyprus are now inside the American tax net, together with a stack of information returns that carry penalties even in years when you owe no tax at all. USCIS does not care that you kept the business. The IRS cares enormously.
When your US tax clock actually starts
Residency begins on the first day you are physically present in the United States holding immigrant status. Everything you own that morning comes with you. The IRS sets out the mechanics on its page for determining an individual's tax residency status, and plenty of EB-5 families discover they crossed the line months earlier, because days spent in the US on a visitor or treaty visa can already have triggered residency under the substantial presence test. That test adds every day in the current year to one third of last year's days and one sixth of the days from the year before.
Treat the date as a wall.
A gain realized the week before you land is usually invisible to the IRS. The same gain realized the week after can be hit with a federal long term capital gains rate of up to 20 percent, the 3.8 percent net investment income tax on top, and then your new state's own bite. California's top bracket takes 13.3 percent. Selling the appreciated stake in your own operating company after arrival rather than before it is the most expensive scheduling mistake available in the whole move, which is why pre-immigration tax planning belongs in the months before the visa interview.
Four filings that catch nearly every new investor
FBAR, FinCEN Form 114. You file when all your foreign financial accounts added together went past $10,000 at any single moment in the calendar year. One afternoon at $10,100 is enough. Signature authority over a company account counts even when none of the money is yours, which is how a founder who already transferred ownership to a sibling still ends up filing. FinCEN's page on reporting foreign bank and financial accounts covers who is caught. The report goes to the BSA E-Filing system rather than to the IRS, and the 15 April deadline carries an automatic extension to 15 October that nobody has to request.
Form 8938. This FATCA disclosure rides along with your Form 1040. A single filer living in the US starts reporting at $50,000 of specified foreign financial assets on the last day of the year, or $75,000 at any point during it, and a married couple filing jointly doubles both numbers. The IRS overview of FATCA explains why your foreign bank is reporting the same accounts from its own side. Filing the 8938 does not excuse the FBAR. Owners of a business abroad usually file both.
Form 5471. Hold 10 percent or more of a foreign corporation and you count as a US shareholder for these rules. Once US shareholders together own more than half the vote or value, the company becomes a controlled foreign corporation and the annual filing turns into a real project, because it demands the company's balance sheet and income statement restated under US tax principles. Late filing costs $10,000 per company per year. An unfiled 5471 also holds the statute of limitations open on your entire return.
Form 8621. A foreign mutual fund or a family holding vehicle that mostly collects dividends and rent is very often a passive foreign investment company. The default PFIC regime taxes the gain at the top ordinary rate and adds an interest charge for each year of deferral, which on a position held since 2009 can swallow most of the economic profit. A qualified electing fund election repairs the treatment, provided the fund will issue the annual statement, and many foreign funds simply refuse. Mark to market is the fallback for publicly traded shares.
Profits you leave sitting inside the foreign company
Parking earnings offshore stopped working in 2017. Subpart F has pulled passive income out of controlled foreign corporations since the 1960s, and the global intangible low-taxed income regime enacted that year reached most of the active operating profit as well. Congress has adjusted those rules since. For an EB-5 investor who owns a profitable plant abroad the consequence is blunt: you can owe US tax on the plant's earnings in a year when it distributed nothing and you personally saw no cash.
Two tools take the edge off. A section 962 election lets an individual be taxed on the inclusion at corporate rates and claim credit for the corporate level foreign taxes. Form 1116 then credits foreign income tax against the US bill, so profit already taxed at 25 percent abroad rarely gets taxed twice in full. Credits seldom line up cleanly with the US computation. Unused amounts generally carry back one year and forward ten, but the credits attached to a GILTI inclusion sit in a basket of their own with no carryback and no carryforward at all, so a mismatch in that column is simply lost. Wider context sits in our guide to US taxation for new green card holders.
The penalties bite harder than the tax
Nobody is ruined by a missed $600 dividend. Information return penalties are the real danger. A late Form 5471 is $10,000 per company per year, stacking across every year and every entity you forgot. A non-willful FBAR failure runs around $10,000 per report, indexed for inflation, and the Supreme Court held in Bittner v. United States in 2023 that the non-willful penalty attaches per report rather than per unreported account. Willful failure lives in another universe, reaching the greater of $100,000 or half the account balance, with criminal exposure standing behind it.
There is a way back. The Streamlined Filing Compliance Procedures were built for taxpayers whose failure was genuinely non-willful, and a new immigrant who never heard of Form 8938 is close to the archetype. Do not file streamlined without counsel reviewing the facts first. That certification of non-willfulness is signed under penalty of perjury.
Should you restructure before you land?
Sometimes, and the timing matters more than the structure does. A check-the-box election on Form 8832 can convert a small foreign corporation into a disregarded entity for US purposes, replacing the 5471 with a Form 8858 and sidestepping the PFIC rules entirely. That election is treated as a deemed liquidation. Made before your residency start date it usually produces no US tax, because you were not yet a US person. Made a month after landing, it can manufacture a taxable event out of nothing more than a filing preference.
Selling the company to a relative who stays behind is the other common instinct, and it is usually a bad one. Transfers signed shortly before immigration get read for exactly what they are. Home country gift tax may apply, and if you keep control in substance the arrangement accomplishes nothing on the US side. A poorly papered transfer can also muddy the source of funds record that has to survive through your Form I-829 petition to remove conditions. Moving the proceeds afterwards is covered in our note on currency transfers and US banking.
Running a company abroad without losing the green card
No EB-5 rule requires you to shut down a foreign business. The regulation at 8 CFR 204.6 asks that you be engaged in the management of the new commercial enterprise, and for a Regional Center investor the ordinary rights of a limited partner under state law satisfy that test. Ten full time jobs come from the project. Where you spend your own working hours is a separate question, and work rights after EB-5 are essentially unrestricted.
Physical residence is the binding constraint. Absences past six months invite questions at the port of entry, and a trip longer than twelve months without a re-entry permit gets treated as abandonment in practice, a sequence our page on avoiding green card abandonment works through case by case. Form I-131 buys a re-entry permit valid up to two years, and USCIS sets out the wider expectations in its guidance on maintaining permanent residence. A permit protects the green card. It does nothing for the continuous residence you need before naturalizing after five years, where any absence over six months already raises a rebuttable presumption. Founders who commute back to run a factory should assume citizenship arrives later than the five year minimum and plan around that.