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Offshore Investors

Non-U.S. Investors and FIRPTA

The turn in the markets has delivered opportunities quite different from what investors sought in 2007. The U.S. market, with a very developed real estate sector, offers a prime opportunity for distressed strategies, a strategy of both U.S. investors and non-U.S. investors. However, non-U.S. investors have to deal with a major structural obstacle in order to take advantage of these opportunities — The Foreign Investment in Real Property Tax Act of 1980 (known as FIRPTA).

FIRPTA taxes non-U.S. investors on gains from U.S. real property investments at effective rates up to 35% (and, when the branch profits tax is added, the effective rate can jump to 54.5%). Along with the tax bite, FIRPTA requires non-U.S. investors to file U.S. tax returns – an unwanted intrusion for nearly every non-U.S. investor.

Pineheron Asset Management in conjunction with our legal and tax advisors, has implemented what is known as a “Leveraged Blocker” structure to allow our non-U.S. clients to invest in U.S. real estate through our British Virgin Islands holding company, Pineheron Capital Partners, Ltd. We are able to significantly mitigate the taxes and eliminate the need to file a U.S. tax return.

We work closely with each and every offshore investor to make sure we are offering them the best available methods to invest in U.S. real estate. Please contact us to discuss your personal situation and we will work with you to provide the most efficient transaction possible.


Jan 5, 2015

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