How ownership is held
Individual foreign investment in US assets is often held directly, through a U.S. company, through a foreign company, or through a trust, and each option has different tax and privacy consequences. Nonresidents can face U.S. estate tax on certain U.S. assets, such as real estate and shares of U.S. companies, with a far smaller exemption than U.S. citizens receive, which is one reason holding structures matter. When a foreign person sells U.S. real property, the buyer is generally required to withhold tax under FIRPTA. Rental income and business income are taxed under different rules, and a tax treaty may change the result.
Reviews and reporting
Most passive investments by individuals do not need government approval, but some raise questions. Real estate near military installations or certain other sites can fall under CFIUS review, and several states restrict land ownership by people or companies linked to specific countries. Larger investments in U.S. businesses may trigger reporting to the Bureau of Economic Analysis. Banks will ask about the source of funds, so documentation of where the money came from should be ready before closing. Keep records of how the investment was funded and who its ultimate owners are, since lenders, title companies, and tax authorities may all ask.
Planning with us
We begin with what you plan to buy, where you live and are taxed, and your goals for the investment, including whether you plan to pass it to family. We then discuss holding structures with you and your tax advisers in both countries and prepare the entity and transaction documents. For real estate, we work through closing, withholding, and title issues with the other professionals involved. Bring a description of the investment, your residence and citizenship details, and any draft purchase documents. If you already hold U.S. assets, we can review whether the existing structure still fits your family and tax situation.
