Foreign Buyers

Owning Property in The United States

The information provided below will help any individual who is not a resident or citizen of the United States understand what is involved when purchasing and investing in real estate in our country. Persons who are not United States residents or citizens can own property in the United States without special permission. There are no special permits or permissions, and the purchase transaction for a non-US person is much the same as for a US person. There is some difference only in the operation (rental) of the property, and at the time of sale.

The purpose of this page is to discuss certain legal and business concepts applicable to ownership of United States real property. The information on this page is not intended to constitute legal advice. Please use this information as a tool to understand the concepts you will discuss with a United States attorney.

Tax Information for Foreign Nationals Selling U.S. Properties

Selling real estate may also involve some considerations specific to foreign nationals. Before FIRPTA became law, non-U.S. citizens could purchase U.S. real estate and sell it at a profit, without paying a dime in taxes. Under FIRPTA, buyers who purchase property from foreign nationals are required to withhold 10% of the sales price in a real estate transaction as a deposit for the seller’s potential tax liability.

There are exceptions to the law, as well as situations that can result in a reduced withholding amount. One such exception is if a buyer purchases a home from a foreign national for less than $300,000, and the home will serve as the primary residence for the buyer’s family, then there is no FIRPTA withholding requirement.

Financing Tips for International Buyers

• Establish credit in the U.S. if possible.
• Open up an account with a U.S.-based bank at least two months before you seek financing.
• Start an account in your home country with a large, international bank with branches in the U.S. close to where you want to purchase a home.
• Get three reference letters declaring you are in good standing from three financial institutions in your home country if you can’t accomplish #1 or 3.
• Obtain verification of your gainful employment and line of work. A simple letter from a CPA or some other third-party in your resident country will suffice.
• Apply to extend your visa or passport if it’s due to expire in six months or less.

Here are two attorneys that I can recommend you talk to for legal advice:

For contract closing and title:

For tax, visa and business advice:

WORK PERMITS/VISAS

An important consideration in purchasing property or establishing a business in the U.S. is to enter and work in the US lawfully. All non-U.S. citizens or non-resident aliens must comply with visa entry requirements.

Visa Waiver

For many countries, a citizen of that country who remains in the US for less than 90 days is not required to obtain a visa. A person in the US on a Visa Waiver may not work for a US company while in the US, this requires a different type visa. Usually, a person may enter the US on a Visa Waiver two or three times a year, but perhaps not more, in the discretion of the Immigration Officer at the Port of Entry.

B-1/B-2 Visa

People who wish to stay in the US may secure a visitor’s visa (for business, B-1 – or pleasure, B-2) for short stays. The number of times the person may enter the US, and the time the person is authorized to stay in the United States is determined by the US consulate which grants the visa, and by the immigration officer at the Port of Entry into the US. The number of times and the length of stay depends on the purpose of the trip. The B-1 visa category may be used for relatively short periods of time to set up and staff a company, however, the person cannot be paid by the U.S. company. The usual initial grant is up to 6 months, but can be extended by petition to the USCIS.

E-1/E-2 Visa

Investors of countries which have signed an investment treaty or treaty of commerce and navigation with the United States, may request an E-1 (business trader) or E-2 (business investor) category. E visas may be used by entrepreneurs who set up a business in the United States. It is generally used by an investor and his/her family. The E-1 visa is granted for business people to carry out trade with the United States.

The trade may consist of goods or services. The trade must be continuous and involve numerous transactions, and be ongoing business with revenue sufficient to support the business trader and his/her family. The E-2 visa is granted for people who make a “substantial investment” in the United States. The funds must be at risk and be committed to the investment.

The funds must be transferred to the United States and used in an active business. There is no minimum amount although most investments are over $100,000.00. In both categories (E-1 and E2) the business may be owned jointly with a spouse or partner. In order to qualify under either the E-1 or the E2 category, at least 50% of the stock of the company engaging in trade or investment in the United States must be owned by national of the country of origin of the investor. For example, 50% of the business could be owned by a Swiss citizen and the other 50% by an American citizen. The E visa (E-1 or E-2) is granted to the principal owner of a business or a key employee in an executive or a managerial capacity. The spouse and children under 21 of the E-1 or E2 visa holder also receive a visa. We advise in depth discussions with us before committing to purchase a business.

L-1 Visa

The L-1 visa is used for intra-company transfers. A person employed by a company in the foreign country may use an L-1 to establish a business in the United States. The person coming to the US must have been employed continuously for at least one year by the foreign company, and intend to perform services for the new US company.

The employee coming to the US must be an executive, a manager or have specialized knowledge regarding the products or services of the company. The period of admission is for a total of 7 years for executive and managerial positions, 5 years for employees with specialized knowledge, and 1 year for an employee who sets up a new office in the United States.
Treaty Investor

An investor may receive permanent residency under the EB-5 category if he makes an investment of at least $1million dollars (or $500,000 in certain depressed areas), the applicant must demonstrate that the investment will benefit the U.S. economy, and it must create a requisite number of full-time jobs within the United States.

Permanent Residency/Green Card

Permanent residency may be obtained through employment by a US company of an employee the company seeks to employ permanently based on employment skills. The employee must have specialized education and skills and the employer must demonstrate that it cannot find an employee with the same or similar qualifications on the local market.

In most cases the application has to be processed and approved by the Labor Department before being processed by immigration authorities. Permanent residency may also be obtained through other channels, for example through a U.S. family member or the U.S. spouse. Once the appropriate work permit has been issued the visa holder may enter and work in the U.S. lawfully.