Guidelines for Establishing a Bunker Trading Entity in the USA

The following guideline is tailored to establishing a new bunker trading company in the USA, especially with a foreign parent company. Bunker trading has specific legal, tax, compliance, and maritime layers, so the checklist here focuses on what matters most in fuel trading, shipping, and international payments.

✅ Checklist for Establishing a Bunker Trading Entity in the USA (with a Foreign Parent)

1. Entity Choice & Structure

Decision	Considerations
Corporation (C‑Corp) vs. LLC	C-Corp is usually preferred for liability protection, investor familiarity, and simplicity in tax treaty planning. LLC may work if pass-through treatment is needed.
Subsidiary vs. Branch	A subsidiary (U.S. entity) protects the foreign parent from direct U.S. liability. Branches are riskier in terms of tax and regulatory exposure.
State of incorporation	Delaware for legal simplicity, or a maritime hub like Texas, Florida, Louisiana, or California for operational efficiency and port presence.

2. Licensing, Regulatory, and Maritime Compliance

Requirement	Notes
Bunker trading license	No federal bunker license exists, but local permits may be needed (e.g., fuel supplier registration, hazmat, or marine fuel blending permits).
Coast Guard / MARPOL Compliance	Must comply with fuel specs and reporting rules under IMO 2020, MARPOL Annex VI, and U.S. Coast Guard regulations.
Jones Act compliance (if applicable)	Ensure you're not violating U.S. cabotage laws by transporting goods between U.S. ports on non-U.S.-flagged ships.
KYC & anti-money laundering (AML)	High AML risk due to cross-border payments and potential sanctions exposure. A full compliance manual and KYC procedures are critical.
OFAC Sanctions	Must screen counterparties (e.g., shipowners, intermediaries) for sanctions risk—especially when dealing with Iran, Venezuela, Russia.

3. Tax and Transfer Pricing

Issue	Key Action
Federal tax (C-Corp 21%)	U.S. income taxed at flat 21%. Dividend repatriation to foreign parent may trigger 30% withholding—check tax treaty.
Transfer pricing	Create an arm’s-length pricing policy for intercompany fuel purchases, admin fees, loans, etc. to avoid §482 adjustments.
Excise taxes	Bunker fuel is often exempt from U.S. federal excise tax, but confirm with IRS rules (Pub. 510). State/local fuel taxes may apply.
Form 5472 filing	Required if ≥25% foreign-owned and has any reportable transactions with foreign parties. Penalties start at $25,000.
State income/franchise tax	Varies by state; income apportionment based on sales in-state. Some states impose gross margin/franchise taxes (e.g., Texas).

4. Customs, Trade, and Fuel Handling

Topic	Details
Customs compliance	If importing fuel into the U.S., you need a customs broker and proper HTS code classification.
Blending & additives	Any blending of marine fuel onshore may trigger environmental permits and EPA reporting requirements.
Storage tanks & terminals	Leasing tanks at terminals may require environmental permits and operator agreements with port authorities.
Supplier agreements	Ensure strong contracts with terminal operators, fuel suppliers, and shipping agents with clear delivery terms (e.g., FOB, CIF).

5. Banking, Payments, and Trade Finance

Issue	Action
U.S. bank account	Prepare EIN, formation documents, ownership disclosures. Banks will conduct CDD checks. Foreign-owned companies face stricter scrutiny.
Trade finance	Secure letters of credit (LCs), credit insurance, and counterparty vetting procedures to reduce risk exposure.
FX risk & repatriation	Establish policies for managing USD-based cash flows vs. parent’s currency. Consider hedge accounting if FX volatility is material.

6. People, Visas, and HR Setup

Task	Details
Hiring local staff	Start with a U.S. manager or fuel trader. Register for federal and state payroll taxes, workers' comp, unemployment insurance.
L-1 / E-2 visa	If transferring execs or key personnel from the parent, consider an L-1 (intra-company) or E-2 (treaty investor) visa.
Remote work rules	State tax exposure is created wherever you have employees—get HR/legal advice if team is remote or multi-state.

7. Insurance

Type	Coverage
Marine liability	Covers damage to vessels, environmental spills, or fuel contamination incidents.
General liability	Standard business insurance including premises and product liability.
Professional indemnity	For claims arising from misadvice or trading losses (especially relevant in bunker hedging).
Cargo insurance	Covers marine fuel shipments under your custody.

8. Corporate Transparency Act (CTA)

Issue	Details
BOI Filing (if applicable)	Only required if you register a foreign entity to do business in the U.S. (not for newly formed U.S. corporations). Confirm based on structure.
Deadlines	30 days after formation or registration, unless exempt. Disclose ultimate beneficial owners (≥25%) and control persons.

9. Document Infrastructure

Document	Purpose
Operating or shareholder agreement	Establish control rights, capital contributions, and dividend policy between U.S. sub and foreign parent.
Intercompany agreements	Cover services, fuel supply, shared personnel, and loans. Must align with transfer-pricing documentation.
Trading contracts	Standardized bunker supply contracts (e.g., BIMCO terms) adapted to U.S. law. Review governing law and dispute resolution clauses.

⚓ Summary: Launching a U.S. Bunker Trading Subsidiary

Phase	Key Tasks
Setup	Choose C-Corp vs. LLC; pick formation state; obtain EIN and open bank account
Compliance	Check for MARPOL/USCG rules, state fuel taxes, CTA/BOI rules, and licensing needs
Operational	Secure port access, fuel supply contracts, and insurance; hire and onboard key staff
Tax & Legal	Build transfer pricing file, file Form 5472, and finalize intercompany agreements

Further Below you will find a suggested Timeline, which is covering all aspects, but obviously, much can be done much faster, if you have the right partnership in place to help establish the entity locally.

MBIEC

Here's a timeline for setting up a U.S. bunker trading subsidiary—assuming you're starting from scratch with a foreign parent. This timeline is broken down by week, based on typical legal, tax, banking, and operational lead times.

🗓 12-Week Timeline: Setting Up a U.S. Bunker Trading Subsidiary

WEEK 1–2: Legal & Entity Formation

• ✅ Choose entity type (likely C-Corp or LLC)

• ✅ Choose state (e.g., Delaware, Texas, Florida)

• ✅ Draft & file formation documents

• ✅ Apply for EIN (Employer Identification Number) with the IRS

• ✅ Decide on U.S. entity name, registered agent, and address

📌 Output: Certificate of incorporation, EIN, legal entity ready

WEEK 2–3: Tax Structure & Transfer Pricing Planning

• 🔍 Review tax treaty between U.S. and parent company country

• 🧾 Set up intercompany pricing models and service/loan agreements

• 📝 Plan for Form 5472 filing obligations (≥25% foreign ownership)

• ⚖️ Choose tax/accounting firm to assist with planning

📌 Output: Transfer pricing outline, tax and compliance structure defined

WEEK 3–4: CTA / BOI & Regulatory Screening

• 🧾 Determine if Corporate Transparency Act (BOI) applies (based on entity type)

• 🔐 Prepare BOI filing if a foreign reporting company

• 🛡 Screen for CFIUS/OFAC risk if parent company is from a “sensitive” country or sector

• 🔍 Research port-specific licensing or fuel handling permits (if any)

📌 Output: BOI filed if needed, regulatory issues cleared

WEEK 4–5: Banking & Insurance

• 🏦 Open U.S. corporate bank account (takes ~1 week once docs are ready)

• 📄 Provide KYC documents: passport copies, ownership chart, EIN, incorporation papers

• 💼 Obtain marine liability, cargo, and general business insurance

• 💳 Set up FX policies and any necessary LCs or trade finance facilities

📌 Output: Bank account active, insurance coverage in place

WEEK 5–6: Operational & Port Setup

• ⚓ Lease or access storage tanks / port terminals (via operator agreements)

• 🔋 Identify fuel suppliers / blenders and negotiate supply terms

• 🚢 Register with U.S. Coast Guard (USCG) if transporting fuel

• 📜 Prepare standard bunker contracts using BIMCO or industry templates

📌 Output: Trading and fuel logistics partners secured

WEEK 6–8: Staffing & Visas

• 👩‍💼 Recruit U.S.-based staff (fuel trader, ops manager, finance lead)

• 🛂 File L-1 or E-2 visa applications if transferring executives

• 💰 Register for state payroll & employment taxes

• 🧾 Set up HR/payroll software (e.g., Gusto, ADP)

📌 Output: Key people in place, HR infrastructure running

WEEK 8–10: Systems, Contracts & Controls

• 🔗 Finalize intercompany agreements (service, management, fuel sales)

• ⚙️ Set up accounting system (e.g., QuickBooks or NetSuite) with tax coding

• 📈 Develop pricing & hedging policies

• 🧮 Implement trading, logistics, and inventory tracking systems

📌 Output: Systems integrated, controls in place

WEEK 10–12: Launch & Go Live

• ✅ First bunker trades executed

• 💼 Contracts tested under operational flow

• 📊 Monthly closing & tax compliance systems tested

• 🧾 Begin preparing for initial filings: 5472, franchise tax, etc.

📌 Output: Company fully operational, compliant, and ready to scale

🚀 Optional Add-ons (Post-Launch)

• 🌐 Website, branding, CRM system (e.g., Salesforce, HubSpot)

• ⚖️ Annual legal compliance calendar

• 🛠 Internal audit or compliance committee if group is scaling quickly

If you are looking for a local company to help you manage registration and process of a new entity, reach out to MBIEC today.

Contact MBIEC