The U.S. Market Looks Open—But It’s Not Simple
The United States is a magnet for international capital. It offers a stable economy, large consumer base, and strong legal protections. In 2023, foreign direct investment (FDI) into the U.S. reached over $350 billion, according to the U.S. Bureau of Economic Analysis.
But behind the opportunities are layers of risk, rules, and red tape. Many investors get caught off guard. They assume it’s the same as investing in their home country—or that having local partners is enough.
It’s not.
This guide breaks down what you actually need to know before putting money into U.S. markets—whether it’s real estate, startups, or joint ventures.
You Need the Right Legal Structure
Entities Matter More Than You Think
Before you buy a building or back a startup, you need a legal entity. The structure you choose affects your taxes, liability, reporting, and even your ability to get a visa.
Most foreign investors use:
- LLC (Limited Liability Company)
- C Corporation
- Limited Partnership
Each comes with pros and cons. For example, LLCs offer flexibility and protection, but foreign owners may face complex tax filings. A C Corp might be better for those investing in U.S. tech or planning to raise capital.
Don’t Skip the Planning
Roland Sanchez-Medina, a Florida-based lawyer who works with cross-border investors, explained how one client lost six months and nearly $500,000 in a commercial deal because they picked the wrong entity at the start.
“They assumed an LLC would be the easiest,” he said. “But they didn’t realise the tax rules would trigger withholding. We had to restructure mid-deal.”
Start with structure. Everything else follows.
U.S. Tax Laws Hit Foreign Investors Differently
Withholding Is a Real Thing
The U.S. has specific tax rules for non-resident investors. If you own property or shares, the IRS may withhold up to 30% of your income—unless your country has a tax treaty with the U.S.
That includes:
- Rental income
- Dividends
- Royalties
- Capital gains in some cases
You may also have to file federal and state tax returns.
Action: Talk to a Tax Attorney—Not Just an Accountant
A good tax advisor can help:
- Pick the right entity
- Avoid double taxation
- Comply with FIRPTA (Foreign Investment in Real Property Tax Act)
- Handle state-level rules (which vary a lot)
Don’t wait until after the investment. Plan your tax position before wiring money.
Banking Isn’t Always Straightforward
You’ll Need a U.S. Bank Account
Most investors assume they can open a U.S. bank account easily. But many banks require in-person visits, local addresses, and U.S. tax IDs (EIN or ITIN).
If your structure includes a U.S. entity, it gets easier. But be ready for a process—not a one-day setup.
Also, many banks run strict compliance checks under U.S. anti-money laundering laws. Don’t be surprised if you’re asked to verify the source of funds in detail.
Action: Open an Entity First, Then Apply for Banking
Trying to open a bank account as a foreign individual often leads to frustration. Get your legal and tax setup done first.
Then open a U.S. business bank account. Bring your documents. Expect a few weeks of back and forth.
Real Estate Comes with Extra Rules
FIRPTA Can Change the Math
If you buy or sell U.S. real estate, the Foreign Investment in Real Property Tax Act (FIRPTA) may apply. This means 10–15% of the sale price could be withheld by the IRS at closing.
Even if you’re just buying a home or apartment for rental income, FIRPTA still applies if you’re not a U.S. person.
You can apply for a refund later—but the cash is gone up front.
Action: Use FIRPTA-Ready Advisors
Make sure your lawyer and escrow team know how to handle FIRPTA. If they don’t, hire someone else. This isn’t something to learn on the fly.
Local Laws Vary—A Lot
Each State Plays by Its Own Rules
The U.S. isn’t one system. Each state has different laws on:
- Real estate
- Business licensing
- Employment
- Taxes
- Environmental compliance
An investment that works in Florida might fail in California—or get stuck in zoning red tape in New York.
Before signing anything, check the local rules. Cities and counties also add layers.
Action: Hire Local Legal and Real Estate Experts
Don’t rely on your home country’s firm or a general U.S. advisor. You need local eyes on every deal. If you’re investing in Miami, work with someone who’s done deals in Miami—not just “Florida.”
Visas and Immigration May Be Connected
Investing Can Open Doors (Sometimes)
The U.S. has visa programmes tied to investment. The E-2 visa, for example, allows investors from treaty countries to live and work in the U.S. if they invest a substantial amount in a U.S. business.
There’s also the EB-5 programme, which grants green cards for major investments tied to job creation.
But these are complex. They require structure, documentation, and time. Don’t assume your investment will get you a visa automatically.
Action: Separate Your Immigration and Investment Plans
Treat them as two projects. If they align, great. If not, you’ll avoid disappointment and legal trouble.
Watch for Political and Regulatory Shifts
Investment Reviews Are Getting Stricter
The U.S. government now reviews foreign investments more closely. The Committee on Foreign Investment in the United States (CFIUS) can block or unwind deals that affect national security or sensitive data.
This mostly applies to:
- Technology firms
- Infrastructure
- Defence-related industries
- Real estate near military bases
If your deal touches any of those areas, get legal review before going public.
Action: Check CFIUS Risk Before Signing
Even minority stakes can trigger reviews. This can delay your timeline by months or cancel the deal altogether.
Final Word
The U.S. market is full of opportunity. But it’s also packed with rules, systems, and hidden tripwires. It rewards preparation and punishes assumptions.
Work with professionals who understand cross-border deals, tax codes, and state laws. Build your structure first. Plan your tax path. And don’t rush banking, compliance, or paperwork.
People like Roland Sanchez-Medina help international investors get it right from the start—because fixing mistakes later is much more expensive.
In short: don’t wing it. Build it right. That’s how you win in the U.S. market.
