Protecting Your Assets in the USA
Corporate Direct forms asset protection entities and structures for foreign investors from around the world. In providing this service we have found that many of our clients ask similar questions, which are answered here:
What is the best entity for real estate investors?
The best entity for both U.S. and foreign real estate investors is the limited liability company or LLC. The LLC offers the benefits of both asset protection and flow through taxation. LLCs are affordable to set up and maintain and are the entity choice for real estate investors.
Can foreign individuals own U.S. LLCs?
Yes, while foreign individuals cannot be owners of S corporations they most certainly can be owners of an LLC. In fact, most investors from outside the United States utilize the LLC for their real estate investments.
Where should we form our LLC?
You can file an LLC in any U.S. state. However, we suggest that our clients form in the state of Wyoming or Nevada for their superior asset protection benefits and very minimal state fees. We maintain complete offices in both Wyoming and Nevada.
Do we need to have a separate LLC for each property?
Superior asset protection is achieved by placing one property in one LLC. That way, if you were sued over the real estate by a tenant or vender, they can only reach the equity in the one property held by the LLC. By contrast, if you had ten properties in one LLC and a tenant sued over one property they could reach the equity in all ten properties owned within the LLC. A key strategy for asset protection is to segregate assets into separate LLCs.
Can we use one Wyoming LLC to own property in other states?
You can form a Wyoming LLC and qualify the Wyoming LLC to do business in the state where the real estate is located.
Is it better to form separate LLCs in other states?
One strategy is to form LLCs in the states where the real estate is located (as long as their laws are strong enough) and then have each of those LLCs held by a Wyoming LLC for the superior asset protection.
Some states, such as California, have very weak asset protection laws. You would not want to form a California LLC. Instead, you would set up a Wyoming LLC qualified to do business in California.
Why is Wyoming better?
Wyoming (and Nevada) law provides that the exclusive creditor remedy is the charging order. This means that a creditor cannot force a sale of your real estate. However, Wyoming is more affordable than Nevada. The annual fees for Wyoming are only $50.00 per year, versus $325.00 per year for Nevada.
Do I need to form a separate corporation to act as the manager for the LLC to keep the money in the U.S.?
While not required, it is a good strategy to have a separate management corporation which can manage and hold assets in the U.S. We can set up a C corporation to manage your LLCs.
Do you obtain our ITIN?
We are not able to obtain ITINs for foreign individuals.
How to I obtain an ITIN?
There is a form which needs to be filed with the IRS. The IRS also has a service through Accepted Agents who can assist with the process. In many cases, when you file your first LLC tax return the IRS will then assign you an ITIN.
How long does it take to form the LLC?
Allow at least a month for the whole process to be completed. Wyoming processing time is about 2 weeks – allow extra time for safety.
Is it better to be manager managed or member managed?
We prefer that you have your LLC manager managed to keep ownership information out of the public record. A member (owner) managed LLC has to identify the LLC owner. As well, if privacy is important we can provide a nominee officer or manager for $650.00 per year so that your name is kept private.
Do we need to have a U.S. address?
You need to have registered agent in each state where an LLC is formed. We provide this service for you. To build corporate credit you need to have an address separate from the registered agent.
Can the company build credit? How?
Yes, we can assist. For more information go to www.businesscreditsuccess.com.
What does Corporate Direct charge to set up an LLC?
We charge a flat fee of $695.00 (plus filing fees, which varies from state to state) for the complete LLC package. We file the articles, prepare the operating agreement, minutes and membership certificates, and provide you with a complete package for safely investing in the USA. Please request our free incorporation package from Corporate Direct, Inc.
