Investors around the world have always had great interest in properties in the United States and the reasons are clear. Not only real estate offers a safe investment with good returns but it also offers total control of the investment and it is an excellent hedge against inflation. The United States offers good economic and political stability like no other country in the world. Therefore any investor interested in real property should have in his/her portfolio real estate in the United States of America but many considerations are important when it comes to foreign investors acquiring properties in the US. Last year 72% of the foreign investors surveyed stated they will increase their investments in properties in the United States in the following 12 months, mainly in commercial real estate although the influence of foreign investment in residential properties is very high in South Florida and it is one of the reasons a real estate market recovery should be soon a reality in our area.
One of the most important aspects is the tax laws affecting foreign investment in real property. In 1986 there were many changes in the law and all foreign investors should be aware of all recent changes as well so they can establish the proper structure under which take title to properties. Can I take title under my personal name? Shall I take title under a domestic US corporation or limited liability company? Who should be the owner of that US entity, me and my family or a foreign company or trust controlled by us? Or shall I take title under an offshore company? In using offshore companies, should they be from my Country of origin or shall I use tax heaven jurisdiction?
All these questions are very important before one makes a decision to invest in properties in the United States because they will affect the operation and returns of the investment and proper planning will avoid costly mistakes.
It is crucial to analyze current US Treaties with the Country of origin. If the foreign investor’s country has a treaty with the US this will affect the type of entity and structure as well as the operation of the investment so it should be analyzed carefully taking into account possible future changes.
It is very important to analyze the income tax liability of the investment based on the chosen structure since this will affect the after tax return on the investment as well. The analysis should be of the nature to have potential estate and income tax issues in concert with the desired succession plans and investment objectives of the foreign investor.
Only property managers and brokers with the right experience in structuring investments for foreign clients have the knowledge to assist clients in analyzing real estate returns and investment objectives and are the ones that can properly orchestrate the work of other professionals such as real estate attorneys, tax attorneys and accountants to properly assist the foreign investor in optimizing portfolio operation and returns while enjoying all the benefits of a safe and sound investment in real property in the United States.
Our organization has the knowledge an skills of assisting foreign investors as well as the contacts with the right professionals to assure investment success.
