The allure of foreign investments in the United States has experienced significant growth in recent years. This interest is grounded in several key factors, such as the U.S. government’s liberal policy towards foreign investments, the country’s political, economic, and social stability, and a tax structure that, while complex, facilitates foreign investments.
Furthermore, the U.S. legal system, divided into 50 states with their own legal systems, adds an additional layer of consideration for investors. In this article, we will explore key aspects that foreign investors must consider when entering the U.S. market.
1. Legal System and Geographic Considerations
The U.S. legal system presents a peculiarity: each state has its own legal system coexisting with the federal government’s system. This subdivision highlights the importance of carefully choosing the geographic location for investment, considering factors such as the type of activity to be conducted, and specific corporate and tax issues of each state.
The principle of autonomy of will in U.S. laws allows parties to freely define the terms of a contract, as long as they do not violate public order. This underscores the importance of clearly establishing hiring guidelines and conflict resolution rules in contracts, as these matters in the United States are primarily regulated by the contract between the parties.
2. Civil Liability and Social Security
U.S. legislation has been a pioneer in contractual and extracontractual civil liability, protecting the rights of consumers. It is crucial to understand that, in the event of harm, a consumer can sue individuals or entities that have had direct or indirect involvement in the legal act.
3. Immigration Visa and Work Permit
For foreign investors, the U.S. Citizenship and Immigration Services (USCIS) is the agency responsible for enforcing admission laws to the United States. Obtaining a visa is essential, and its type will depend on the nature and duration of the stay, whether for business, tourism, or work.
There are various visa categories, ranging from those intended for short business trips (B visa) to specific visas for investors (E and L-1 visas) and skilled professionals (H-1 visa). The choice of the right visa will depend on the specific circumstances of each investor.
4. Taxes
4.1 Personal Taxes
In the United States, anyone considered a tax resident must pay federal taxes on their income. The rate varies depending on the income level and the state of residence. Non-resident foreigners are subject to a percentage of withholding on some types of income generated in the United States, unless there is a treaty to avoid double taxation.
4.2 Corporate Taxes
Companies in the United States, whether federal or state, are subject to taxes on net profits. Rates vary, and some states do not impose taxes at the state level. Some states, such as Florida and New York, have specific tax rates.
4.3 Inheritance Taxes
In the United States, there is a law stating that any foreigner (resident of any other country) or any individual not considered a U.S. national who owns properties in the United States, such as real estate, bank accounts, stocks, among others, will be subject to inheritance tax, which will be calculated on the value of the assets of each deceased person.
5. Business Entities
5.1 Corporation
The corporation is a legal entity separate from its shareholders, offering limited liability. Formation requires the filing of “Articles of Incorporation” and compliance with specific requirements, such as a board of directors and bylaws.
5.2 Partnership
The partnership is an association of individuals as partners, divided into general or limited. It requires the filing of a “partnership certificate” and a partnership agreement.
5.3 Limited Liability Company (LLC)
The LLC combines features of corporations and partnerships, offering limited liability to its members. Its formation involves filing “Articles of Organization” and an operating agreement.
6. Foreign Corporations and Investment Strategies
Some investors choose to operate through foreign companies incorporated in tax havens. Strategies include the use of trusts, foreign corporations, and structures like “tandem” to minimize taxes and comply with regulations.
7. Real Estate in the United States
Investing in real estate in the United States presents various ownership options, from individual ownership to more complex forms such as tenancy in common, joint tenancy, or in common, as well as usufruct and “life estate.
7.1 Tax Implications on Property Sales (FIRPTA)
The FIRPTA withholding is a prepayment of tax affecting real estate transactions made by foreign sellers. It requires the buyer to withhold 10% to 15% of the sale price, unless specific exemptions apply, or an IRS withholding certificate is obtained.
8. Other Assets: Stocks, Bank Deposits, and Bonds
Investing in stocks, bank deposits, and bonds involves considering tax implications. Dividends, interest, and withholdings must be understood by foreign investors to maximize benefits and comply with regulations.
In conclusion, investments in the United States offer attractive opportunities backed by the government’s pro-investment policy, economic and social stability, and a tax structure that, although complex, facilitates foreign investment. However, investors must address key considerations, including the complexities of the U.S. legal system and tax variations among states. The choice of geographic location, understanding legal and tax responsibilities, and selecting the appropriate visa are crucial for investment success. Additionally, the diversity of business structures and tax strategies, such as the use of foreign corporations, requires careful planning. In the real estate sector, ownership options and tax implications, such as FIRPTA withholding, must be considered meticulously.
For personalized guidance on which structure best suits your business goals, contact us today via WhatsApp at +1(305) 924 2374 or send an email to info@acmmconsulting.com Our team of experts is ready to advise and help you make informed decisions that drive the success of your company in the dynamic American business market.
All the information provided in this article is for informational and reference purposes only. ACMM Consulting is not liable for any decisions readers may make without prior consultation with our professionals. Each business situation is unique, and we recommend seeking our advice before making important decisions. Contact us via WhatsApp at +1(305) 924 2374 or send an email to info@acmmconsulting.com to obtain personalized consulting plans to guide you in each specific case.
