Tax Planning

Inbound International Tax Planning

Foreign nationals investing or operating in the US face a separate layer of US tax rules. Structure your US activities correctly from the start.

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The Foundation

What Is Inbound International Tax Planning?

Inbound international tax planning addresses the US tax obligations of foreign individuals and entities who invest in, earn income from, or operate a business inside the United States. Foreign investors buying US real estate, foreign business owners forming a US entity, and non-resident aliens earning US-source income all face a distinct set of federal tax rules, withholding requirements, and treaty considerations that differ substantially from what a US citizen or resident would face.

Getting this wrong means double taxation, forced withholding on sale proceeds, and penalties for missed filings.

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Watch: US Tax Planning for Foreign Investors

Why Structure Matters

FIRPTA, Branch Profits Tax, and Withholding Are Not Optional

When a foreign person sells US real estate, the buyer is required to withhold a percentage of the gross sales price under FIRPTA, the Foreign Investment in Real Property Tax Act. That withholding applies to the gross price, not the gain.

A foreign investor who paid $800,000 for a property selling for $900,000 may face withholding on the full $900,000 regardless of their actual profit. Proper structuring before the investment can reduce or eliminate this exposure. After the sale, the options are limited.

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FIRPTA withholding applies to the gross sales price, not the gain

Branch profits tax applies to foreign corporations operating through a US branch

Treaty benefits require proper documentation to claim, they are not automatic

Improper US business structure can trigger unexpected US income tax obligations

Foreign persons with US bank accounts, US real estate, or US business income have US filing obligations

What You Get

How We Help

FIRPTA Structuring

We structure US real estate investments for foreign nationals to minimize or eliminate FIRPTA withholding exposure on future sales.

US Entity Formation for Foreign Owners

We form the right US entity for your situation, coordinate the tax elections, and ensure your structure meets both US and treaty requirements.

Tax Treaty Analysis

We review applicable income tax treaties between the US and your home country to identify reduced withholding rates and exemptions you can legitimately claim.

ITIN and EIN Coordination

Foreign nationals need an Individual Taxpayer Identification Number and their entities need an Employer Identification Number. We coordinate the applications with your overall tax plan.

US Tax Return Compliance

We work alongside your return preparer to ensure your US-source income is reported correctly, treaty positions are documented, and required disclosures are filed.

Exit and Repatriation Planning

When it is time to return profits to your home country or sell your US assets, we plan the transaction structure to minimize US tax on exit.

Natalia Ouellette-Grice, Tax Planning Attorney

Why LCO Law

We Structure the Investment Before the Problem Arrives

Most foreign investors discover FIRPTA, branch profits tax, and US compliance requirements after they are already in the problem. We build the structure before you invest so withholding exposure and compliance gaps are addressed from the start.

We structure the investment before it happens, not after a withholding problem arises
We coordinate with your home-country advisors on the US side of cross-border transactions
LLM in Taxation provides the federal tax depth that cross-border transactions require
We handle ITIN applications, EIN applications, and entity formations as part of a coordinated engagement
Flat-fee pricing so you know the cost of your US tax structure before you commit

Common Questions

Inbound International Tax Planning FAQ

Do I need to file a US tax return if I only own US real estate but do not live in the US?

In most cases, yes. Foreign persons with US real estate income, rental income, or gain from a US property sale have US tax filing obligations. The type of return and the elections available depend on how the property is held and how you choose to be treated for US tax purposes.

Can I avoid FIRPTA withholding by forming a US LLC?

A single-member US LLC owned by a foreign person is still treated as owned by a foreign person for FIRPTA purposes. Proper structuring requires more than simply forming a US entity. We design a structure that addresses the ownership and withholding rules correctly.

What is the branch profits tax?

The branch profits tax is an additional 30% tax on after-tax earnings of a foreign corporation that are effectively connected to a US trade or business. It applies when a foreign corporation operates a US branch rather than a separate US subsidiary. Treaty exemptions and reductions are available for many countries.

How long does it take to set up a proper US investment structure?

For most real estate investments, two to four weeks is sufficient to form the entity, obtain the EIN, make any tax elections, and have documentation in place. We recommend engaging us before you sign a purchase contract.

Do you work with clients located outside the US?

Yes. LCO Law serves clients across Florida and works with foreign investors and business owners remotely. All meetings can be conducted virtually.

Ready to Get Started?

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Meet with our team to discuss your US investment or business plans and find out what structure is right for your situation. No pressure, no obligation.

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