Guidelines for Establishing a Bunker Trading Entity in the USA
- Michael Bergendorff
- Apr 30
- 6 min read
Updated: Jun 9
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.
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.