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International Investors: How to Passively Invest in US Real Estate

You’re an international investor and you want to add US-based real estate to your investment portfolio. Smart move! PassiveInvesting.com and the internet are replete with great content about why investing in US real estate is a smart move.

Here are a few great articles from our team and others that lay out exactly why this is the case:

Are Class-A Assets a Smart Choice in the 2020 Multifamily Market?

Apartment Returns Can’t Be Beat

Why Invest In Apartments?

Here are the steps you’ll need to take to invest*:

  1. Find a CPA who is well versed in helping foreign investors and is knowledgeable about the operation of businesses in the US.
  2. Incorporate. Usually, a limited liability partnership (LP) is best for international investors, but a knowledgeable CPA will advise you on what the best entity is for your situation and country.
  3. Apply for an Employer Identification Number (EIN) & register your entity with the proper agencies–again, a knowledgeable CPA or attorney will be of great value here in guiding you through this process.
  4. Apply for an Individual Taxpayer Identification Number (ITIN).
  5. Open US-based bank accounts. With an EIN, LP operating agreement, and ITIN, you’ll be able to open a US-based bank account, ideally a global bank with easy online access.
  6. File tax returns. The LP will need to file returns, as will the partners. You’ll receive a schedule K1 from us each year, which usually contains significant tax benefits to reduce or eliminate the cash flow you’ve received during the year.
  7. Take advantage of tax treaty benefits. A cross-border tax specialist or CPA that is familiar with the tax treaty benefits between your country and the US will be invaluable here to minimize any taxes you have to pay.

PassiveInvesting.com works with many foreign investors from various countries around the world. We’re more than happy to refer you to someone in our network of knowledgeable professionals.

* Disclaimer: We are not certified public accounts (CPAs) or attorneys, nor do we play one on the internet. The following is intended as helpful information to get you started, but a qualified US-based CPA or an attorney will be necessary for you to ensure you are set up properly, maximizing potential returns, and minimizing tax liability.