New York has always offered plenty of investment opportunities. This is true whether you are a foreign investor or an American one. There are many reasons why foreign investors might want to dive into the area’s commercial real estate market, but there are some complications to be aware of. You need to know exactly what you are getting into here, and a Long Island, NY real estate closing lawyer can help with that.
What Are Some Good Reasons for Foreign Investors to Invest in NY?
Foreign investors can find the NY commercial real estate market attractive for a few reasons. It allows them to:
- Put money into a relatively stable and secure market
- Work towards an investor visa
- Take advantage of favorable exchange rates
It is important to know how to best take advantage of these benefits before you invest.
What Ownership Structure Should Foreign Investors Use?
One thing to consider is one kind of real estate ownership structure is ideal for your purpose. Using a trust, corporation, or LLC could be beneficial due to how taxes work in the United States. You can also decide whether you want to establish a foreign version of these entities or a domestic one. A lawyer may be able to tell you more about whether a domestic trust or a foreign corporation is the best ownership structure for you.
The type of ownership structure you choose can affect what kind of tax liabilities an heir would face when you pass away and leave them your commercial real estate investments. So this is a choice that will affect a foreign investor in the short and long term.
Do Foreign Investors Need a Tax ID?
When you do business in the United States, you need a tax ID. This is something that a foreign investor simply cannot overlook. Most use either an ITIN, or individual taxpayer identification number, or an EIN, also known as an Employer Identification Number. Securing either can take over two months, so planning ahead is a necessity.
Having a tax ID allows you to open up an American bank account. It also makes it possible to contract with other companies that could help you make the most out of your real estate investment.
What Kinds of Insurance Do Investors Need?
In most cases, foreign investors will need to have at least three different kinds of insurance. This includes:
- Title insurance
- Property insurance
- Rent-loss insurance
These protect you from all sorts of risks, including damage to the property or issues caused by a previous deed holder.
Talk to Our Lawyers Today
If you have any questions or uncertainties about investing in New York’s commercial real estate market, talk to our attorneys. Contact David A. Gallo & Associates LLP to learn more about your options and any potential complications that you could run into. It pays to be informed before you really commit to any deal. We will help you make that well-informed decision.