{"id":122814,"date":"2026-01-12T09:37:13","date_gmt":"2026-01-12T09:37:13","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=122814"},"modified":"2026-01-12T09:37:13","modified_gmt":"2026-01-12T09:37:13","slug":"united-states-investing-in","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/united-states-investing-in\/","title":{"rendered":"United States: Investing In"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-122814","comparative_guide","type-comparative_guide","status-publish","hentry","guides-investing-in","jurisdictions-united-states"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Pandev Law<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2024\/12\/PL-Logo.png\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Pandev Law<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2024\/12\/PL-Logo.png\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Investing In laws and regulations applicable in United States<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please briefly describe the current investment climate in the country and the average volume of foreign direct investments (by value in US dollars and by deal number) over the last three years.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The United States maintains its status as the world\u2019s premier destination for foreign direct investment (FDI), supported by a resilient economy and a transparent regulatory environment. According to the Bureau of Economic Analysis (BEA), the inward FDI position in the United States reached a record $5.71 trillion at the end of 2024, an increase of $332.1 billion from 2023. This continued growth underscores the enduring confidence international investors place in the U.S. market, which has been ranked as the world&#8217;s top FDI destination for the 12th consecutive year by the Kearney FDI Confidence Index.<\/p>\n<p>Over the last three years, the volume of new foreign direct investment has remained robust, though it has moderated from post-pandemic highs. In 2024, expenditures by foreign direct investors to acquire, establish, or expand U.S. businesses totaled $151.0 billion. This follows $176.0 billion in 2023 and $177.5 billion in 2022. While recent annual expenditures have dipped below the ten-year average ($277.2 billion), the sustained influx of capital into greenfield projects and acquisitions highlights the U.S. economy&#8217;s ability to attract long-term strategic assets, particularly in advanced manufacturing and technology.<\/p>\n<p>By ultimate beneficial owner (UBO), the top sources of FDI in the United States for 2024 were:<\/p>\n<p>(1) Japan: $819.2 billion<\/p>\n<p>(2) Canada: $811.7 billion<\/p>\n<p>(3) Germany: $677.3 billion<\/p>\n<p>(4) United Kingdom: $635.6 billion (2023 data)<\/p>\n<p>Sector-wise, foreign investment remains concentrated in industries that are pivotal to U.S. economic growth:<\/p>\n<ol>\n<li>Manufacturing: This sector continues to lead, accounting for 42.3% of the total FDI position, or approximately $2.42 trillion. Within manufacturing, the chemical industry\u2014driven largely by pharmaceuticals\u2014remains the dominant subsector, representing roughly one-third of total manufacturing investment.<\/li>\n<li>Finance and Insurance: Holding 10.5% of the total FDI position ($599.4 billion), this sector remains a magnet for global capital due to the depth, liquidity, and sophistication of U.S. financial markets.<\/li>\n<li>Wholesale Trade: Accounting for 9.1% of the total position ($520.5 billion), this sector leverages the United States&#8217; vast logistics infrastructure and consumer base, though it experienced a slight decline in position value in 2024.<\/li>\n<\/ol>\n<p>The United States&#8217; continued leadership in attracting foreign capital is a testament to its innovation-driven economy and stability. Despite global economic headwinds, the steady accumulation of inward investment affirms the country&#8217;s position as the preferred safe haven for investors seeking both security and growth.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the typical forms of Foreign Direct Investments (FDI) in the country: a) greenfield or brownfield projects to build new facilities by foreign companies, b) acquisition of businesses (in asset or stock transactions), c) acquisition of minority interests in existing companies, d) joint ventures, e) other?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>FDI in the United States primarily takes three forms, as defined by the U.S. Bureau of Economic Analysis:<\/p>\n<p>The most prevalent form remains the acquisition of existing U.S. businesses. In 2024, expenditures for acquisitions totaled $143.0 billion, accounting for the vast majority of total FDI expenditures. Through asset or stock transactions, foreign investors continue to purchase established companies to gain immediate access to the U.S. market, leveraging existing operations, customer bases, and brand recognition.<\/p>\n<p>The second form is the establishment of new businesses, commonly known as greenfield investments. This involves foreign companies setting up new operations or facilities in the United States from the ground up. In 2024, expenditures to establish new U.S. businesses amounted to $6.3 billion. Additionally, there were $14.1 billion in total planned expenditures for greenfield investments initiated that year, indicating ongoing commitments to developing new ventures within the U.S. economy.<\/p>\n<p>The third form is the expansion of existing foreign-owned U.S. businesses, which is another subset of greenfield investment. This entails investing additional capital to grow the operations of already established entities. In 2024, expenditures for expansions were $1.8 billion. While this represents a moderation from previous years, it reflects continued strategic capital deployment by foreign investors to increase their market share and operational capacity in key sectors.<\/p>\n<p>Within these categories, foreign investors employ various strategic approaches to align with their business objectives:<\/p>\n<ol>\n<li>One common strategy is horizontal FDI, where a company invests in the same type of business operation in the United States as it operates in its home country. This approach is prevalent in both acquisitions and greenfield investments, allowing companies to replicate their existing operations and capitalize on new market opportunities. For example, a foreign automobile manufacturer might build or acquire car factories in the U.S., producing vehicles identical to those made in its home country to serve the American market directly.<\/li>\n<li>Another strategy is vertical FDI, which involves investing in different stages of the supply chain within the United States. This can be further divided into: (a) Backward Vertical Integration: Investing in supplier operations or earlier stages of production. For instance, a foreign electronics company might invest in U.S. component manufacturers to secure a steady supply of parts; and (b) Forward Vertical Integration: Investing in distribution channels or later stages of the supply chain. An example is a foreign apparel manufacturer establishing retail outlets across the U.S. to sell its products directly to consumers. Companies utilize vertical FDI to gain greater control over their supply chains, enhance efficiency, and reduce costs.<\/li>\n<li>Conglomerate FDI is a less common form where a company invests in a U.S. business unrelated to its existing operations, allowing for diversification into new industries. For example, a foreign technology firm might invest in a U.S. food processing company, thereby entering a completely different market sector and spreading its business risks across different industries.<\/li>\n<li>Another approach is platform FDI, where a company establishes operations in the United States with the intention of exporting goods or services to third countries. This strategy leverages the U.S. as a strategic base for global distribution due to its advanced infrastructure and favorable trade agreements. For instance, a foreign apparel company might set up manufacturing facilities in the U.S. to export products to other international markets, taking advantage of the country&#8217;s logistical strengths.<\/li>\n<\/ol>\n<p>In addition to these strategies, foreign investors often engage in joint ventures, forming collaborative agreements with U.S. companies to share resources, expertise, and market access. While specific data on joint ventures are not separately categorized by the BEA, they are common across various industries and provide a means for foreign investors to navigate the U.S. market alongside established local partners.<\/p>\n<p>Another form of investment is the acquisition of minority interests in existing U.S. companies. This allows foreign investors to participate in the U.S. market without assuming full ownership responsibilities, enabling them to influence company direction and benefit from its growth while mitigating risks associated with full ownership.<\/p>\n<p>These various forms of FDI offer foreign investors multiple avenues to integrate into the U.S. economy in ways that best suit their strategic objectives, legal considerations, and tax strategies. Whether through swiftly entering the market via acquisitions, establishing new operations tailored to specific needs, expanding existing businesses to bolster market presence, or forming strategic partnerships, foreign investors continue to find diverse and effective means to engage with the U.S. market.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are foreign investors allowed to own 100% of a domestic company or business? If not, what is the maximum percentage that a foreign investor can own?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Foreign investors are generally allowed to own 100% of a U.S. domestic company or business. The United States maintains an open investment climate, encouraging foreign direct investment across most sectors of the economy. However, there are specific restrictions and regulatory reviews for transactions that may pose national security risks.<\/p>\n<p>The primary mechanism for reviewing foreign investments for national security concerns is the Committee on Foreign Investment in the United States (CFIUS). CFIUS is authorized to review mergers, acquisitions, or takeovers that could result in foreign control of U.S. companies involved in critical technology, infrastructure, or sensitive personal data. If CFIUS determines that a transaction presents national security concerns, it can negotiate mitigation measures or, if necessary, recommend that the President block or unwind the transaction. CFIUS conducts a risk-based analysis to determine if a transaction presents national security concerns, and if necessary, negotiates mitigation measures or requests abandonment of the transaction if concerns cannot be resolved.<\/p>\n<p>Certain industries have additional regulatory requirements or limitations on foreign ownership:<\/p>\n<p><strong>Airlines:<\/strong> Foreign ownership in U.S. airlines is limited to 25% of voting stock. Additionally, the Department of Transportation (DOT) reviews potential &#8220;actual control&#8221; by foreign entities, generally capping total equity ownership (voting plus non-voting) at 49% and requiring that the airline be under the actual control of U.S. citizens. These restrictions ensure that control over U.S. air carriers remains in domestic hands for national security and regulatory compliance reasons.<\/p>\n<p><strong>Agricultural Land:<\/strong> While there is no strict federal ban, a growing number of U.S. states have enacted laws restricting or prohibiting foreign ownership of agricultural land and real estate near critical infrastructure\/military bases. At the federal level, the Agricultural Foreign Investment Disclosure Act (AFIDA) requires foreign investors to report holdings of U.S. agricultural land to the USDA.<\/p>\n<p><strong>Banking<\/strong>: At the national level, all directors of a national bank are required to have U.S. citizenship, though this can be waived for a minority of directors.<\/p>\n<p><strong>Broadcasting<\/strong>: Direct foreign ownership is limited to 20% of a broadcast licensee. Indirect foreign ownership through a U.S. holding company is limited to 25%, but this can be exceeded with FCC approval. Such approvals are subject to review by the &#8220;Team Telecom&#8221; interagency committee to ensure national security concerns are addressed.<\/p>\n<p><strong>Merchant Marine Vessels:<\/strong> Federal law mandates that merchant marine vessels operating in domestic trade be owned by U.S. citizens. Any sale of such vessels to foreign entities requires approval from the U.S. Department of Transportation (DOT).<\/p>\n<p><strong>Nuclear Power:<\/strong> The Atomic Energy Act generally prohibits the Nuclear Regulatory Commission (NRC) from issuing a license for a nuclear production or utilization facility to an entity that is owned, controlled, or dominated by a foreign corporation or government. However, the NRC may approve foreign investment in U.S. licensees if the foreign control is mitigated through specific &#8220;negation action plans&#8221; or if the investment does not result in foreign control, subject to strict national security reviews.<\/p>\n<p><strong>Public Utilities:<\/strong> The Federal Energy Regulatory Commission (FERC) oversees foreign investments in utilities. While foreign ownership is permitted, certain transactions may require exemptions or additional approvals, especially when involving critical infrastructure.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are foreign investors allowed to invest and hold the same class of stock or other equity securities as domestic shareholders? Is it true for both public and private companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, foreign investors are generally allowed to invest in and hold the same class of stock or other equity securities as domestic shareholders in both public and private U.S. companies, including partnerships, LLCs, and C Corporations.<\/p>\n<p>However, there are two key exceptions:<\/p>\n<p>(1) S Corporations: A critical restriction applies to &#8220;S Corporations&#8221; (a common tax election for private companies). Non-residents are prohibited from being shareholders in an S Corporation. If a foreign investor wishes to invest in such an entity, the company must often restructure (e.g., revoke its S-election to become a C Corporation) or the investor must invest through a specific trust structure, adding complexity.<\/p>\n<p>(2) Regulated Industries: In sectors like aviation or broadcasting (see response to Question 3), foreign investors may be restricted to holding non-voting shares or a limited percentage of voting shares (e.g., the 25% voting cap for airlines), whereas domestic shareholders face no such restriction.<\/p>\n<p>There are generally no citizenship or residency requirements for serving on the board of directors of a U.S. corporation. However, to physically perform duties within the United States generally requires obtaining a U.S. visa providing employment authorization.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are domestic businesses organized and managed through domestic companies or primarily offshore companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Domestic businesses are primarily organized and managed through domestic companies. While small businesses often operate as a single domestic entity, such as an LLC or corporation, larger or more complex enterprises frequently utilize multi-tier domestic structures. This typically involves a U.S. holding company, often formed in Delaware due to its favorable corporate laws, owning one or more subsidiary operating companies (LLCs or corporations) formed in the states where they physically operate. Using offshore holding companies for purely domestic businesses is not common practice for U.S. owners due to adverse tax consequences.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the forms of domestic companies? Briefly describe the differences.   Which form is preferred by domestic shareholders? Which form is preferred by foreign investors\/shareholders? What are the reasons for foreign shareholders preferring one form over the other?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are three types of company structures in the United States: (1) limited liability companies (LLCs) (2) corporations, (3) partnerships.<\/p>\n<p>LLCs provide liability protection while minimizing the need for formalities. LLCs are not required to have a board of directors and can have as few as one owner, called a member. LLCs also provide tax planning advantages because they are by default treated as pass-through entities for income tax purposes but can elect to be taxed as C or S corporations, thereby allowing owners to elect the tax structure most beneficial for their business.<\/p>\n<p>Corporations provide liability protection but require additional formalities compared to LLCs. Corporations must have at least one shareholder and director and are generally required to hold annual meetings. By default, corporations are taxable entities that file their own tax returns and pay income taxes at the corporate level \u2013 referred to as C corporations. If a corporation has 100 or fewer U.S. resident individual shareholders and only one class of stock, it can elect a special pass-through tax status under subchapter S, referred to as a S corporation. S corporations allow profits and losses to pass through to the shareholders, who pay income taxes on corporate profits on their personal tax returns.<\/p>\n<p>There are four types of partnerships: (1) general partnerships (GPs), (2) limited partnerships, (3) limited liability partnerships, and (4) less common, limited liability limited partnerships. GPs involve two or more owners who share equal responsibility for managing the business and are personally liable for all business debts and obligations, meaning there is no liability protection. LPs consist of at least one general partner who manages the business and holds unlimited liability, and one or more limited partners who contribute capital but have limited liability up to the amount of their investment and do not participate in day-to-day management. LPs are often used by investment funds. LLPs provide all partners with limited liability protection, shielding their personal assets from the partnership&#8217;s debts and liabilities, while allowing them to participate in management. LLPs are often used by professional service firms like law or accounting practices. LLLPs are similar to LPs but extend limited liability protection to general partners. LLLPs are not commonly used and are not recognized in all states.<\/p>\n<p>The entity choice decision is generally driven by tax considerations, liability protection, privacy concerns, and the owners\u2019 strategic business and personal objectives. Generally, U.S. resident owners with U.S.-situs personal assets prefer structures that provide liability protection with pass-through taxation, such as S corporations, LLPs, and LLCs. Foreign owners generally value privacy and prefer to avoid withholding taxes and filing personal U.S. tax returns, which are often required with pass-through entities. Since they are also unable to own S corporations, foreign owners often form a multi-tier structure with a U.S. C corporation holding company owning separate LLCs for U.S-situs assets and operating businesses. This structure often provides maximum privacy and liability protection while reducing the owners\u2019 tax liability and requirement to file personal tax returns. Please note, that there is no \u201cone-size fits all\u201d solution. Foreign investors should consult with relevant professionals to determine the best structure for their specific objectives.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the requirements for forming a company? Which governmental entities have to give approvals? What is the process for forming\/incorporating a domestic company? What is a required capitalization for forming\/incorporating a company? How long does it take to form a domestic company? How many shareholders is the company required to have? Is the list of shareholders publicly available?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Companies are typically established by filing the necessary registration documents with the secretary of state&#8217;s office in the chosen jurisdiction. The name of these filings varies depending on the type of entity and the state in which the company is formed, e.g. Articles of Incorporation, Certificate of Formation, or Articles of Organization, among others. It is important to note that companies are registered at the state level rather than with the federal government. Therefore, the decision regarding which state to form a company in becomes a critical component of the company&#8217;s formation strategy. Depending on the state and filing method (online vs. paper), formation can typically be completed in as little as 24 hours.<\/p>\n<p>The amount of information collected by the state secretary&#8217;s office about the owners depends on the state. Some states, like California publicly list the owners\u2019 names on their websites. Other states like Delaware or Wyoming, do not publish such information.<\/p>\n<p>In addition to registering with the secretary of state, a company has to apply for an Employer Identification Number (EIN) with the Internal Revenue Service (IRS). The EIN serves as the company\u2019s identification number used on all tax filings and other official applications and registrations. As of March 2025, the Corporate Transparency Act was revised to exempt domestic entities from having to file a beneficial ownership information report disclosing information about the beneficial owners of an entity to the Financial Crimes Enforcement Network (FinCEN). However, foreign entities registering to do business in the U.S. continue to be required to file a report. The IRS and FinCEN do not publish any information regarding the owners of a company.<\/p>\n<p>Unlike in many foreign jurisdictions, the internal governing documents, such as operating agreements, partnership agreements, bylaws, etc., are generally not filed with the state secretary\u2019s office and are instead kept within the company\u2019s internal minute book. In fact, some entity types, like general partnerships, do not have to be registered with the state at all and are formed through a contract among the owners.<\/p>\n<p>Corporations and LLCs can have as few as one owner. Partnerships must have at least two owners. There are generally no minimum capitalization requirements for private companies.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the requirements and necessary governmental approvals for a foreign investor acquiring shares in a private company? What about for an acquisition of assets?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Generally, foreign investors can acquire shares in a private U.S. company or purchase assets without needing prior governmental approval, reflecting the open investment environment of the United States. However, certain exceptions apply. Transactions that may raise national security concerns, such as those involving critical technologies, infrastructure, or sensitive personal data, may require a review or mandatory pre-closing filings with CFIUS. Additionally, if the transaction value exceeds certain statutory thresholds (approximately $126.4 million in 2025), the investor may be required to file a pre-merger antitrust notification under the Hart-Scott-Rodino (HSR) Act, triggering a mandatory waiting period before the deal can close. Additionally, investments in regulated industries like airlines, banking, broadcasting, merchant marine vessels, nuclear power, and public utilities may necessitate specific government approvals or be subject to ownership restrictions, as previously detailed in the response to Question 3.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does a foreign investor need approval to acquire shares in a public company on a domestic stock market? What about acquiring shares of a public company in a direct (private) transaction from another shareholder?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Foreign investors generally do not need prior government approval to acquire shares in a public company on a U.S. stock market. However, they must comply with U.S. securities laws and regulatory requirements. Specifically, if a foreign investor acquires more than 5% of a class of securities registered under Section 12 of the Securities Exchange Act of 1934, they are required to report their beneficial ownership by filing Schedule 13D or Schedule 13G with the Securities and Exchange Commission (SEC). Filings are also required if ownership exceeds 10% (insider reporting) or raises national security (CFIUS) concerns. Additionally, significant acquisitions may trigger antitrust considerations under the Hart-Scott-Rodino Antitrust Improvements Act, necessitating pre-merger notification filings with the Federal Trade Commission (FTC) and the Department of Justice (DOJ) if certain size thresholds are met.<\/p>\n<p>For acquiring shares of a public company in a direct (private) transaction from another shareholder, the same regulatory considerations apply.<\/p>\n<p>In addition to federal regulatory considerations, state laws might also impose additional requirements or restrictions on the transfer of shares. Moreover, such transactions may trigger change of control provisions outlined in the company&#8217;s organizational documents or ownership agreements. In summary, while government approvals are generally not required for these acquisitions, compliance with regulatory obligations is crucial, especially for significant transactions or those involving sensitive industries.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a requirement for a mandatory tender offer if an investor acquired a certain percentage of shares of a public company?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No. Unlike in many jurisdictions, U.S. federal securities laws do not impose a mandatory tender offer requirement based solely on acquiring a specific percentage of shares. However, if an investor acquires more than 5% of a public company&#8217;s stock, the investor must file a beneficial ownership report with the SEC (Schedule 13D or 13G). These reports are publicly available.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the approval process for building a new facility in the country (in a greenfield or brownfield project)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The approval process for constructing a new facility in the United States involves multiple regulatory layers at the federal, state, and local levels.<\/p>\n<p>At the federal level, while greenfield investments generally do not trigger standard CFIUS jurisdiction over business acquisitions, CFIUS maintains specific jurisdiction under Part 802 over real estate transactions. This applies if the land is in close proximity to sensitive military installations, airports, or maritime ports. Additionally, if the project requires federal permits (e.g., for wetlands or air emissions) or uses federal funding, it may trigger an environmental review under the National Environmental Policy Act (NEPA).<\/p>\n<p>Development is primarily governed by state and local regulations. Investors must navigate local zoning laws, land use permits, and building codes. The local approval process typically involves neighborhood meetings, applications to planning commissions, and public hearings. Environmental greenfield projects must comply with state-level environmental review statutes, such as CEQA in California, which can be more rigorous than federal standards. For brownfield sites, the approval process typically involves entering a state Voluntary Cleanup Program (VCP). Investors negotiate a remediation plan with the state environmental agency to clean up the site in exchange for liability protection, often leveraging the federal Small Business Liability Relief and Brownfields Revitalization Act for funding or liability clarification.<\/p>\n<p>Thorough due diligence at all governmental levels is essential when planning a new facility.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can an investor do a transaction in the country in any currency or only in domestic currency? a) Is there an approval requirement (e.g. through Central Bank or another governmental agency) to use foreign currency in the country to pay: i. in an acquisition, or, ii. to pay to contractors, or, iii. to pay salaries of employees? b) Is there a limit on the amount of foreign currency in any transaction or series of related transactions? i. Is there an approval requirement and a limit on how much foreign currency a foreign investor can transfer into the country? ii. Is there an approval requirement and a limit on how much domestic currency a foreign investor can buy in the country? iii. Can an investor buy domestic currency outside of the country and transfer it into the country to pay for an acquisition or to third parties for goods or services or to pay salaries of employees?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Investors can legally transact in any currency. However, practically all transactions in the United States are conducted in U.S. dollars.<\/p>\n<p>Unlike many other jurisdictions, there are no foreign exchange controls in the United States. No government approval is required to use foreign currency for acquisitions, paying contractors, or salaries, and there are no limits on the amount of capital that can be transferred in or out. The only major compliance requirement is that U.S. tax withholding (payroll) must generally be calculated and remitted to the IRS in U.S. dollars, regardless of the currency paid to the employee.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there approval requirements for a foreign investor for transferring domestic currency or foreign currency out of the country? Whose approval is required? How long does it take to get the approval? Are there limitations on the amount of foreign or domestic currency that can be transferred out of the country? Is the approval required for each transfer or can it be granted for all future transfers?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Generally, there are no specific approval requirements for foreign investors to transfer U.S. dollars or foreign currency out of the United States. However, certain reporting obligations and regulatory considerations apply. Financial institutions are required to file a Currency Transaction Report (CTR) with FinCEN for transactions of physical currency of $10,000 or more. Individuals physically transporting more than $10,000 in currency or monetary instruments into or out of the country must file a Report of International Transportation of Currency or Monetary Instruments on FinCEN Form 105. Additionally, anti-money laundering (AML) regulations mandate that financial institutions monitor and report suspicious activities, and transactions involving countries or entities subject to U.S. economic sanctions may require authorization from the Office of Foreign Assets Control (OFAC). While direct governmental approvals are generally not required for currency transfers, foreign investors must comply with these reporting requirements and regulations when moving funds out of the United States.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a tax or duty on foreign currency conversion?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No. However, profits from currency trading may be subject to ordinary income or capital gains taxes.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a tax or duty on bringing foreign or domestic currency into the country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No. However, the individual transporting the currency may need to file FinCEN Form 105, as detailed in the response to Question 13.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a difference in tax treatment between acquisition of assets or shares (e.g. a stamp duty)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, there are significant differences in tax treatment between the acquisition of assets and the acquisition of shares in the United States.<\/p>\n<p>In an asset acquisition, the buyer can adjust the tax basis of the acquired assets to the purchase price, allowing for increased depreciation and amortization deductions over time. This &#8220;step-up&#8221; in basis can provide substantial tax benefits to the buyer. However, the seller may face higher tax liabilities due to potential depreciation recapture and the possibility that gains on certain assets will be taxed as ordinary income rather than capital gains. Additionally, asset acquisitions may trigger transfer taxes on real estate and sales taxes on personal property in some states. Moreover, real property asset purchases from foreign sellers may trigger withholding under the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA). The allocation of the purchase price among different assets also affects the tax treatment and requires careful planning.<\/p>\n<p>In contrast, a stock acquisition generally results in capital gains treatment for the selling shareholders, often at lower tax rates compared to ordinary income. The buyer inherits the existing tax basis of the target company&#8217;s assets, which may limit future depreciation deductions. Stock acquisitions usually do not trigger transfer or sales taxes, and unlike in many jurisdictions, there is generally no stamp duty on share transfers in the U.S. However, certain states, e.g., New York, Florida, impose &#8220;controlling interest&#8221; transfer taxes if the target entity owns significant real estate. Additionally, net operating loss carryforwards of the target company may be limited after the acquisition.<\/p>\n<p>It is worth noting that parties can sometimes agree to make a Section 338(h)(10) election, which allows a stock sale to be treated as an asset sale for federal tax purposes, giving the buyer a step-up in basis while legally transferring stock. Therefore, the choice between asset and stock acquisition involves weighing the tax implications for both parties, and consulting with tax professionals is crucial.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">When is a stamp duty required to be paid?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Stamp duties are not generally imposed at the federal level in the United States, but certain states and local governments require them\u2014often referred to as documentary stamp taxes or transfer taxes\u2014in specific situations. These typically include real estate transfers, where stamp taxes are collected upon the registration of a deed when property is sold or transferred. Additionally, some states impose taxes on mortgage registrations or other instruments securing loans against real property, commonly known as mortgage taxes or intangibles taxes, which are collected when the mortgage or deed of trust is recorded. Notably, unlike in many foreign jurisdictions, the United States generally does not impose a stamp duty on the transfer of corporate shares or stock. Certain goods, such as cigarettes and other tobacco products, may also be subject to state or local stamp taxes. At the federal level, a stamp tax is imposed on the transfer of firearms regulated under the National Firearms Act (NFA). Therefore, while there is no general federal stamp duty, specific transactions at the state or federal level may require the payment of stamp duties.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are shares in private domestic companies easily transferable? Can the shares be held outside of the home jurisdiction? What approval does a foreign investor need to transfer shares to another foreign or domestic shareholder? Are changes in shareholding publicly reported or publicly available?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, interest in U.S. companies can be held outside of the entity\u2019s jurisdiction, subject to CFIUS and OFAC restrictions.<\/p>\n<p>While formal regulatory approvals are generally not necessary for the transfer of ownership interest in a U.S. company, transfers of private company shares are subject to restrictions under U.S. federal and state securities laws, often requiring an exemption for resale. Additionally, the company\u2019s internal organizational documents can impose specific conditions that must be met before a transfer can occur or may even prohibit transfers entirely.<\/p>\n<p>Changes in ownership of private companies are generally not publicly reported. However, some secretary of state websites provide information about the owners of companies registered in the state. Ownership changes in public companies will be publicly reported if the transaction impacts a shareholder owning at least 5% of a class of registered shares.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a mandatory FDI filing? With which agency is it required to be made? How long does it take to obtain an FDI approval? Under what circumstances is the mandatory FDI filing required to be made? If a mandatory filing is not required, can a transaction be reviewed by a governmental authority and be blocked? If a transaction is outside of the home jurisdiction (e.g. a global transaction where shares of a foreign incorporated parent company are being bought by another foreign company, but the parent company that\u2019s been acquired has a subsidiary in your jurisdiction), could such a transaction trigger a mandatory FDI filing in your jurisdiction? Can a governmental authority in such a transaction prohibit the indirect transfer of control of the subsidiary?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>While the United States generally operates a voluntary filing regime, mandatory filings are required in specific circumstances. A mandatory filing with CFIUS is triggered if the transaction involves: (1) a U.S. business dealing in critical technologies (where export licenses would be required); or (2) a foreign government acquiring a &#8220;substantial interest&#8221; in a U.S. business involving critical technology, infrastructure, or data. Additionally, the Bureau of Economic Analysis (BEA) requires mandatory filings (Form BE-13) for statistical purposes within 45 days of closing.<\/p>\n<p>The timeframe for obtaining FDI approval from CFIUS depends on the type of submission. A short-form declaration is typically reviewed within 30 days, while a full notice can take between 45 to 105 days, depending on whether the review proceeds to an investigation phase. Even if a mandatory filing is not required, CFIUS has the authority to review and potentially block transactions that pose national security risks.<\/p>\n<p>Transactions outside the United States can also trigger a mandatory CFIUS review if there is a U.S. nexus \u2014 for instance, when a foreign company acquires another foreign company that owns a U.S. subsidiary. In such cases, CFIUS may review the transaction and has, on multiple occasions, prohibited the indirect transfer of control over the U.S. subsidiary to address national security concerns. Therefore, foreign investors should carefully assess whether their transactions might be subject to CFIUS scrutiny, even in indirect or global acquisitions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are typical exit transactions for foreign companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Typical exit transactions for foreign-owned companies are the same as those available to U.S.-owned companies. These include: mergers, acquisitions, management buyouts, IPOs, liquidation, and bankruptcy, among others.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do private companies prefer to pursue an IPO? i. on a domestic stock market, or ii. on a foreign stock market? iii. If foreign, which one?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Whether a private company pursues an IPO varies on a case-by-case basis depending on market conditions and strategic objectives.<\/p>\n<p>If a domestic company does pursue an IPO, it overwhelmingly prefers to list on a domestic stock market. The New York Stock Exchange and Nasdaq Stock Market are the deepest pools of capital in the world. Consequently, it is extremely rare for a U.S. company to list internationally. Conversely, these U.S. exchanges are also the top choice for many international companies, which often cross-list in the U.S. to access higher valuations and liquidity.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do M&amp;A\/Investment\/JV agreements typically provide for dispute resolution in domestic courts or through international arbitration?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>M&amp;A, investment, and joint venture agreements may provide for dispute resolution through either domestic courts or international arbitration, depending on the nature of the transaction. Purely domestic agreements typically designate U.S. state courts, most notably the Delaware Court of Chancery, or federal courts. Conversely, cross-border agreements frequently utilize international arbitration, e.g., ICC, AAA\/ICDR, to ensure neutrality and enforceability under international treaties. However, even in arbitration-based agreements, parties often retain the right to seek interim injunctive relief in U.S. courts.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How long does a typical contract dispute case take in domestic courts for a final resolution?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>While the rules of civil procedure provide timelines for most steps in the litigation process, it is difficult to predict the length of a contract dispute. Timelines can significantly vary between different state and federal trial and appellate courts. Disputes generally take from several months to many years until fully resolved.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are domestic courts reliable in enforcing foreign investors rights under agreements and under the law?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Foreign investors can expect fair and impartial treatment, with access to legal remedies and dispute resolution mechanisms that protect their rights. The U.S. legal system features an independent judiciary and a strong commitment to the rule of law, ensuring that contractual agreements and legal rights are upheld regardless of the parties&#8217; nationalities. Moreover, the United States is a favored forum for international arbitration, with a strong pro-arbitration policy supported by the Federal Arbitration Act (FAA) of 1925, which facilitates the enforcement of arbitration agreements and awards.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there instances of abuse of foreign investors? How are cases of investor abuse handled?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Systemic abuse of foreign investors is not a concern in the United States. Foreign investors generally receive fair treatment and equal protection under the law. Any instances of misconduct or dispute are handled through the U.S. judicial system, which offers robust legal remedies and due process. Additionally, U.S. regulatory agencies adhere to strict procedural standards and provide various administrative dispute resolution mechanisms for regulatory matters.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are international arbitral awards recognized and enforced in your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. The United States is a party to several international arbitration conventions, including the New York Convention, Panama Convention, and ICSID Convention. In addition, the United States is party to several free trade agreements, such as the Central America-Dominican Republic Free Trade Agreement and the United States-Mexico-Canada Agreement, which include arbitration provisions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there foreign investment protection treaties in place between your country and major other countries?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. The United States has bilateral investment treaties (BITs) in force with 39 countries. Additionally, the U.S. has 14 free trade agreements (FTAs) with 20 countries, including major economies such as Canada, Mexico, Australia, and South Korea, which typically contain comprehensive investment protection chapters similar to BITs.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">6198<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/122814","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=122814"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}