If a company has 2 or 3 shareholders, and one of them is neither a US citizen nor green card holder, is it possible for this company to be considered as a S-Corp in the tax season?

Or at least citizen/green card holder members pay their related taxes as a board member of an S-Corp?

This is a startup company and if they do it with three of them, the shares would be divided like 50% for the non citizen/GC holder guy and 25% each for two others or if they do it with two of them, each will obtain 50%.

  • You say 'board member', but do you also mean this person is an 'owner'? As well, are they resident in the US for tax purposes? Commented Sep 14, 2021 at 17:49
  • @Grade'Eh'Bacon: In fact they are 2 or 3 graduated guys working on a startup company. One of the guys was an international student who is not a US citizen or green card holder also his country doesn't have a tax treaty with the US.
    – user109157
    Commented Sep 15, 2021 at 7:32
  • For clarity - are they all shareholders? Commented Sep 15, 2021 at 12:29
  • @Grade'Eh'Bacon: Yes, if they do it with two of them it would be 50-50 and if they do it with three of them it would be 50%(for non citizen guy) and 25% each for the two citizen guys.
    – user109157
    Commented Sep 16, 2021 at 4:46

2 Answers 2


The board composition of a corporation is irrelevant to the eligibility of the corporation to file an S election. As long as the board member is not a shareholder of the corporation, the corporation's eligibility to make an S election isn't impacted.

Note that if the corporation adopts a stock option plan which covers board members, care should be taken with stock option grants to nonresident aliens: while the grant itself probably doesn't affect the S status, the exercise of the option by a nonresident alien option holder certainly will.

  • Based on clarification posted by the OP, it looks like they did mean 'shareholders', not just 'board members'. Commented Sep 16, 2021 at 13:44


One of the requirements for a corporation to be an S-Corp is that all shareholders must be US citizens.

Having a single non-citizen shareholder, even if they only own .00000000000000001% of the stock will cause the companies S-Corp status to be revoked, causing it to become a C-Corp.

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