Real Estate Investment and Business Ownership in the United States by Non-U.S. Resident

Foreign property investment in the United States totaled 78 billion dollars in 2019. Buyers from across the globe are eager to invest in American suburbia.

We receive a lot of question about how a non-U.S. resident can open a company in the United States. Some investors want to open and operate a business, while others seek to invest in real estate. In either scenario, creation of a legal entity is required to protect the individual's personal assets. One way that is relatively simple and has been very popular among foreign investors is through opening a Limited Liability Company (LLC). Below are the most frequently asked questions we receive, and the answers to each.

What is a Limited Liability Company?

A limited liability company (LLC) is a business structure in the United States whereby (if properly organized and managed) the owners are not personally liable for the company's debts or liabilities. LLCs are hybrid entities that combine the characteristics of a corporation with those of a partnership or sole proprietorship. While maintaining the personal liability protection offered to corporations, limited liability companies enjoy less rigorous documentary, management and formality requirements. LLCs are governed by state statute. In Ohio, Chapter 1705 of the Ohio Revised Code governs Limited Liability Companies. Many states don't restrict ownership, meaning anyone can be a member including individuals, corporations, foreigners and foreign entities, and even other LLCs.

Can a foreign person own a U.S. LLC?

Yes. It is not necessary to be a U.S. citizen, or to have a green card to own an LLC.

Does a foreign-owned LLC have to pay taxes?

LLCs may elect not to pay federal taxes and be treated as a “disregarded entity” such that profits and losses are listed on the personal tax returns of the owner(s). Or, the LLC may choose a different classification, such as a corporation. Each designation has specific filing requirements.

Many foreign citizens form LLCs instead of C corporations because profits from a C corporation are subject to double-taxation under U.S. tax law. Double taxation refers to the structure in which company profit is taxed at the corporate level, and dividend paid out to shareholders is also subject to taxes at the individual shareholder level.

A foreign-owned LLC, however, sends pass-through profit distributions straight to the owner (single-member LLC) or owners (in cases of multi-member LLC).

What are LLC filing requirements?

All foreign-owned member LLCs are required to:

- File Articles of Organization with the state of choice.

- Obtain an Employer Identification Number.

- File appropriate forms with the Internal Revenue Service annually.

- Maintain books and records.

Are there any immigration options for foreign investors in the U.S.?

Yes. There are several immigration options available. Most popular are: 1) E-2 visa - Treaty Investors Visa, and 2) L-1 - intercompany transfer visa for managers and executives.

Who is eligible for E-2 Treaty Investor Visa?

E-2 Treaty Investor Visa permits citizens of certain Countries (treaty countries) to reside in the United States through an investment.

What is the minimum amount of the investment for E-2 Visa?

The investment capital and reserves should total at least $100,000 - $200,000.

Who is eligible for L-1 - intercompany transfer visa?

The L-1 Intracompany Transferee Executive or Manager Visa allows managers or executives of foreign companies to be transferred to their U.S. affiliates (U.S. branch, subsidiary, or joint venture) and work legally in the U.S.

How your law firm can help foreign investors in reaching their immigration goals in the U.S?

We work with our clients to properly plan for their goal, devise and implement a plan that will help them achieve that goal. Generally, this includes coordination between our experienced attorneys who will work with you in planning a long-term immigration strategy that could allow you and your family to live and work legally in the U.S. and structuring the organization of the business entity to accommodate this goal.

If you have any questions, or would like a free consultation, please do not hesitate to contact us.

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