An issue which must be considered when preparing a real estate or business transaction is the citizenship or nationality of the individual or business entity parties concerned. The United States, being a largely open country, permits international investors and other owners to participate in domestic business entities and transactions. Planning must be undertaken, for example, in forming business entities when the shareholders of corporations, members of limited liability company, and partners are not US citizens.
In situations involving individual corporate shareholders, “S-corporation” elections are not appropriate for non-domestic shareholders. Also, due to tax requirements, specific reporting to the IRS is required when a seller of real estate is not a US national individual or company. It is crucial when planning transactions of all types, that the parties involved must gather all documents relevant to their nationalities, such as passports, visas, drivers licenses, or other official identification. (This is in addition to the other typical “due diligence” documents involved, such as business entity organizational documents and minutes books, real estate deeds and mortgages, and personal property bills of sale, security agreements, and financing statements.)
In situations involving individual corporate shareholders, “S-corporation” elections are not appropriate for non-domestic shareholders.
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A well-rounded business implementation approach involves a working “partnership” among the parties’ accountants, bankers, and insurance agents, along with the transactional lawyers. In the case of transactions with non-domestic parties, it is also significant to add an immigration attorney to the “team” at the earliest possible stage of organizing the deal. While there may not be immediate activity to be taken by the immigration lawyer, it is most efficient to have the transaction screened for longer-term planning purposes. One example might be when a non-American individual intends to make investments in the United States while planning to continue residing in their home countries, but later decide to make permanent residence in the US.
– For more information, call Philip N. Kabler of the Gainesville, FL office of Bogin, Munns & Munns at 352.332.7688, where he practices in the areas of business, banking, real estate, and equine law. He has taught business and real estate law courses at the University of Florida Warrington College of Business Administration and Levin College of Law and is the President-Elect of the Eighth Judicial Circuit Bar Association.
NOTICE: The article above is not intended to serve as legal advice, and you should not rely on it as such. It is offered only as general information. You should consult with a duly licensed attorney regarding your Florida legal matter, as every situation is unique. Please know that merely reading this article, subscribing to this blog, or otherwise contacting Bogin, Munns & Munns does not establish an attorney-client relationship with our firm. Should you seek legal representation from Bogin, Munns & Munns, any such representation must first be agreed to by the firm and confirmed in a written agreement.