Vietnam-US Tax Treaty for Wyoming LLC Owners

There is no income tax treaty in force between the United States and Vietnam. A convention was signed on 7 July 2015, but it was never ratified by the United States, so Vietnamese residents who own a Wyoming LLC get no reduced treaty rates. US-source FDAP income (dividends, interest, royalties) is withheld at the statutory default of 30%. The good news, which most of this article is about, is that the vast majority of non-resident LLC operating income is foreign-source and is never US-taxed in the first place, so the 30% rarely bites the typical founder.

Treaty status and what it means for vietnam founders

Let me be precise, because there is a lot of confusing and outright wrong information online. On 7 July 2015, US and Vietnamese officials signed an "Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income." This was the first income tax treaty ever negotiated between the two countries. The signed text exists, it is published on the US Treasury website, and Vietnam's National Assembly moved to approve it on the Vietnamese side. None of that puts it into force.

For a US tax treaty to take legal effect, it must receive the advice and consent of the US Senate (a two-thirds vote), be ratified, and have instruments of ratification exchanged with the partner country. The 2015 US-Vietnam convention has never cleared the US Senate. After US tax law changed substantially in 2017 (the Tax Cuts and Jobs Act), parts of the 2015 text became outdated, and the agreement has sat unratified ever since. As of 2026 it remains signed-but-not-in-force.

You can confirm this yourself. The authoritative reference is the IRS page "United States income tax treaties - A to Z" (irs.gov). Vietnam does not appear on that list. The "V" section shows Venezuela; there is no Vietnam entry. If a country is not on the IRS A-Z list, there is no treaty you can claim benefits under, full stop.

What this means in practice for a Vietnamese-resident Wyoming LLC owner:

• There is no reduced withholding rate on US-source dividends, interest, or royalties. The default 30% applies.
• You should not claim treaty benefits on Form W-8BEN-E. There is no treaty article to cite, and claiming one is a false statement on a tax form.
• Any website, table, or "calculator" that quotes you a "Vietnam treaty rate" of 5%, 10%, or 15% is wrong. Those numbers come from the unratified 2015 draft and have no legal effect.

The practical impact is usually small, which is the part worth understanding before you worry about the 30%. Most founders never have meaningful US-source FDAP income at all.

Withholding rates by income type

Because no treaty is in force, there is nothing to reduce the statutory rate. Under Internal Revenue Code sections 871 and 881, US-source FDAP (fixed, determinable, annual, or periodical) income paid to a non-resident is taxed at a flat 30% on the gross amount, with no deductions, unless a treaty or a specific Internal Revenue Code exemption lowers it. For Vietnam, no treaty applies. A few statutory carve-outs (notably the portfolio interest exemption) can still bring some interest to 0% independent of any treaty.

The single most important row is the second-to-last one. For the typical Vietnamese founder running a SaaS, agency, freelancing, e-commerce, or content business, operating revenue is not US-source FDAP at all, so the 30% column is irrelevant to it. The 30% only attaches to genuine US-source passive income such as dividends from US stocks held by the LLC, or royalties paid by a US licensee. The portfolio interest exemption (a statute, not a treaty) means many founders can still receive certain US interest at 0%.

Sources for these rates: IRS, "Taxation of nonresident aliens" and "Fixed, Determinable, Annual, or Periodical (FDAP) income" (irs.gov); IRS "United States income tax treaties - A to Z" (irs.gov), which confirms Vietnam is absent.

Does the treaty even matter for your LLC?

Here is the part that surprises most people: for the typical Vietnamese founder, the absence of a US-Vietnam treaty changes almost nothing, because the income they earn is not the kind a treaty would touch.

A US tax treaty does two main things for a business owner. First, it can reduce withholding on US-source passive income (the dividends/interest/royalties table above). Second, its "Business Profits" article confirms that your operating profits are taxable only in your home country unless you have a US permanent establishment (PE). But that second protection is not unique to a treaty. Under plain US domestic law, a non-resident is only taxed by the US on (a) income effectively connected with a US trade or business (ECI), and (b) US-source FDAP income. If your income is neither, the US does not tax it, treaty or no treaty.

For most online businesses, the income simply is not US-source. The general sourcing rule for services is where the work is performed. If you and your team sit in Hanoi, Ho Chi Minh City, or Da Nang and write code, run ad campaigns, design, write, consult, or fulfill orders from Vietnam, that service income is foreign-source even when the paying customer is American. Foreign-source income earned by a non-resident with no US presence is outside the US net entirely. A single-member Wyoming LLC owned by you is, by default, a "disregarded entity" for US income tax, so the IRS looks straight through it to you, a Vietnamese non-resident, and asks the same two questions: ECI? US-source FDAP? For a clean remote business, the answer to both is usually no.

So the things that actually determine your US tax exposure are not in any treaty:

• Do you have a US permanent establishment or a US trade or business? A US office, US-based employees or dependent agents, or US inventory/warehousing (including some FBA setups) can create ECI. Avoid those and your operating profit generally stays out of US tax.
• Is the income US-source FDAP? Stripe, Gumroad, Upwork, or a US client paying you for services performed in Vietnam is paying you foreign-source business revenue, not FDAP. It is not subject to the 30%.

This is why a missing treaty is not the disaster it sounds like. The Vietnamese founder selling software, courses, design, or freelance services to a global audience from Vietnam typically owes zero US federal income tax on operating profit, the same outcome a German or British founder gets, just arrived at through domestic sourcing rules instead of a treaty's Business Profits article. The treaty would only have mattered if you were holding US dividend stocks or licensing IP to US payers, and even then it would only shave the 30%, not eliminate a tax you mostly do not owe in the first place. (Source: IRS, "Taxation of nonresident aliens" and "Source of income" rules, irs.gov.)

How to claim: W-8BEN-E line-by-line + Form 8833 if needed

Even though there is no treaty to claim, you still need a correctly completed Form W-8BEN-E on file with every US payer. The form does two jobs: it certifies you are a foreign person (so the payer knows the FATCA/Chapter 4 status), and it prevents 24% US backup withholding that would otherwise apply when no valid tax form is on file. For a Vietnamese owner, you complete the form to establish foreign status, and you leave the treaty section blank.

Your single-member LLC files W-8BEN-E (the entity form), not W-8BEN (the individual form). Even though the LLC is "disregarded," US payers generally collect the W-8BEN-E in the disregarded entity's name. Line by line:

• Line 1: Name of the beneficial owner. For a disregarded entity, the IRS instructions say to put the name of the single owner (you), but most payer portals (Stripe, Amazon, Google) ask for the LLC name. Follow the payer's portal; if filling the paper form, the owner's name goes here and the LLC name goes on Line 3.
• Line 2: Country of incorporation of the entity: United States.
• Line 3: Name of the disregarded entity (your Wyoming LLC), if different from Line 1.
• Line 4: Chapter 3 status. For a single-member LLC, tick Disregarded entity.
• Line 5: Chapter 4 (FATCA) status. For a typical operating disregarded entity, Active NFFE is common; an entity owned by an individual is frequently an NFFE. Pick the box that matches your facts.
• Line 6: Permanent residence address. Your Vietnam home address. Do not use a US mail-forwarding address here.
• Line 8: US TIN: your EIN (from the CP575 letter).
• Line 9b: Foreign TIN: your Vietnamese tax code (Mã số thuế / MST).
• Part III (Claim of Tax Treaty Benefits): Leave this entirely blank. There is no US-Vietnam treaty in force, so there is nothing to certify. Do not write "Vietnam" and do not cite an article.
• Part XXV / XXIX (certifications and signature): Sign, date, and print your name and capacity (Owner/Member).

Submit the W-8BEN-E to each US payer (Stripe, Amazon, Google AdSense/YouTube, Upwork, brand sponsors). Do not mail it to the IRS; the payer keeps it. It is valid through the end of the third full calendar year after signing, then you re-file.

Form 8833? Form 8833 (Treaty-Based Return Position Disclosure) is only used when you are taking a treaty position and need to disclose it. Since there is no Vietnam treaty, you do not file Form 8833 for treaty relief. The only realistic scenario where it would appear is if you were claiming relief under some other country's treaty because of a different residency, which does not apply to a Vietnam-resident owner. For a standard Vietnamese founder, skip it. (Sources: IRS Form W-8BEN-E and its Instructions; IRS Form 8833 Instructions, irs.gov.)

Form 5472 + pro-forma 1120 obligation ($25k penalty) regardless of treaty

Treaty status has zero bearing on this, and it is the filing most likely to actually cost you money if missed. A foreign-owned single-member US LLC that is a disregarded entity is treated as a domestic corporation for the limited purpose of the reporting rules under Internal Revenue Code section 6038A. That means every year you must file Form 5472 ("Information Return of a 25% Foreign-Owned U.S. Corporation") attached to a pro forma Form 1120.

"Pro forma" means you do not compute corporate tax on the 1120. You complete only the top identifying information (name, address, items B and E) and attach Form 5472, which reports "reportable transactions" between the LLC and you (its foreign owner), such as capital you contributed, distributions you took, and money that moved between you and the entity. Per the IRS Instructions for Form 5472, this requirement applies to foreign-owned US disregarded entities for tax years beginning on or after 1 January 2017.

The penalty is the reason this matters: $25,000 for failing to file a timely, complete Form 5472, and an additional $25,000 for each 30-day period (after a 90-day IRS notice) that the failure continues. A "substantially incomplete" form counts as a failure to file. This penalty applies even if the LLC had no profit, no US tax, and no treaty relief to claim.

Mechanics: the package is due by the 1120 deadline, generally 15 April for a calendar-year filer (extendable to 15 October with Form 7004). It cannot be e-filed by most non-residents; it is mailed or faxed to the IRS service center in the Form 5472 instructions. You need an EIN for the LLC to file. This obligation exists for every Vietnamese-owned Wyoming LLC, treaty or not. (Source: IRS, Instructions for Form 5472, irs.gov.)

Common mistakes

These are the errors I see Vietnamese founders make most often:

1. Believing the 2015 treaty gives you reduced rates. It does not. It is signed but not in force, and Vietnam is not on the IRS A-Z treaty list. Quoting "5%/15% dividends" or "10% interest" from the draft text is wrong.
2. Claiming treaty benefits in Part III of W-8BEN-E. This is a false certification on a US tax form. Leave Part III blank. There is no article to cite.
3. Filing Form 8833. No treaty position exists, so there is nothing to disclose. Filing it implies a treaty claim you cannot make.
4. Skipping Form 5472 + pro forma 1120. The single most expensive mistake. The $25,000 penalty under IRC 6038A applies regardless of treaty status, profit, or US tax owed.
5. Assuming the missing treaty means you owe US tax on everything. The opposite is usually true: most operating revenue is foreign-source and not US-taxed at all, so the 30% rarely applies to anything you earn.
6. Triggering ECI by accident. Hiring US-based staff, opening a US office, or storing inventory in the US (some Amazon FBA setups) can create a US trade or business and pull your operating profit into US tax. The treaty would not have protected you from this anyway.
7. Confusing US 1099-K thresholds with a tax obligation. A US payment platform issues a Form 1099-K only when payments exceed more than $20,000 AND more than 200 transactions (the One Big Beautiful Bill Act repealed the planned $600 rule). Receiving or not receiving a 1099-K does not change whether your income is US-taxable.
8. Forgetting the Vietnamese side. Vietnam's General Department of Taxation taxes your worldwide income as a resident, and a single-member US LLC is generally looked through. Report the LLC's profit on your Vietnamese return and apply a foreign tax credit only for US tax you actually paid (usually little to none). Confirm specifics with a Vietnamese tax advisor.

A clean setup for a Vietnamese founder looks like this: a Wyoming LLC (formation is $397 all-inclusive at wyomingllc.xyz, with the Wyoming state fee included; an ITIN, if you need one, is a separate $297 add-on), an EIN, a correctly completed W-8BEN-E with Part III blank on file with each payer, and the annual Form 5472 + pro forma 1120 filed on time. No treaty, no problem, because the income that matters was never US-taxable to begin with.

Sources: IRS, "United States income tax treaties - A to Z" (irs.gov); IRS, "Taxation of nonresident aliens" and "FDAP income" (irs.gov); IRS, Instructions for Form 5472 and Form W-8BEN-E (irs.gov); US Department of the Treasury, signed US-Vietnam tax convention text dated 7 July 2015 (home.treasury.gov); Wyoming Secretary of State, business filing requirements (sos.wyo.gov).