GUIDE FOR FOREIGN INVESTORS WITH B1-B2 BUSINESS AND TOURISM VISA
WHERE TO START?
The starting point is to define the purpose of your investment, to determine how you should position yourself in the American market. If your objective is to invest in a property to keep it for use and/or short- or long-term rental, it would be more convenient to make the investment as an individual (citizen, resident or foreigner), and access tax benefits for first and second home purchases, receive incentives on closing costs and access different state, federal and local financing programs with preferential rates. If this is your case, let’s move to the next step, getting to know our projects and if you need to access a line of credit, one of our financial advisors will support you through the process.
If the objective is to reinvest with a growth projection, when registering income from capital gains, you have the flexibility to reinvest the profit within the company without it going through the partners, into another similar investment property within the established timeframes and fully defer tax payments with a 1031 Exchange, in addition to the fact that Florida does not charge state tax to S-Corps or LLCs (it applies to C-Corps), you can also deduct expenses and depreciation. These advantages are very attractive and widely used by investors to grow their portfolio without decapitalizing, and it is essential to legally establish yourself in Florida with an economic activity in the construction sector. Our associated accounting firm is specialized and is responsible for choosing the most convenient structure for you according to your immigration status, shareholding composition and investment amount. We guide you to incorporate in just a few simple steps
1. Company registration or incorporation before the Florida Department of State
also known as Sunbiz, as Incorporation when it is a Corporation such as an S-Corp or C-Corp which is a more formal structure, or Formation of an LLC which is a more flexible structure when it is a Limited Liability Company. These structures determine taxes, legal responsibility, operational flexibility and future growth; it is the starting point if you want to do business legally, issue invoices, hire staff or purchase properties. An Employer Identification Number, known as EIN, is requested.
2. ITIN registration
(Individual Taxpayer Identification Number) is the tax identification number issued by the IRS (Internal Revenue Service of the U.S.). It is a 9-digit number assigned to individuals who must comply with tax obligations and file tax returns using Form 1040-NR or 1040, but are not eligible for a Social Security number.
3. Creation of bylaws and shareholding structure
Based on U.S. real estate laws, internal operating legal documents are drafted: "Operating Agreement" for LLCs and "Bylaws" for corporations. Although they do not require submission to the state, they must be kept in the company records.
4. Opening a business bank account
You must present your corporation’s EIN, identification documents such as passport or license, business address in the U.S., trade name, proof of address abroad. The bank takes a couple of days to carry out verification in accordance with banking and federal law (Bank Secrecy Act, Patriot Act that strengthens controls against money laundering and terrorism financing, and credit reporting law (ACT)), to know your customer identity and source of funds (KYC), and anti-money laundering (AML). Once evaluated and approved, they assign you a bank account number, and a minimum deposit between USD 50 – USD 100 is required for activation. For foreign investors, CitiBank is highly recommended due to its conditions, as it is a top-tier international bank that opens accounts with foreign country data.
5. Annual Report or Renewal before the Florida Division of Corporations (Sunbiz)
between January 1 and May 1 of each year has an average cost of USD 150; if you miss this date you may be subject to a USD 400 penalty, and if it is not renewed by September the company is dissolved.
6. Tax filings
The deadlines to file taxes with the IRS are: March 15 for S-Corp/Partnership (Forms 1120S/1065), April 15 for individuals (Form 1040) and C-Corp (federal format), May 1 for C-Corp (state format F-1120).