Experienced Foreign Investment Attorney

It is a well-known fact that the U.S. is a country of immigrants. New York City is the most populous city in the United States with a population of 8,258,035 as of July 2023. The NYC Department of City Planning states that “half of all New Yorkers speak a language other than English at home, and over 200 languages are spoken in New York City.”

However, foreign investors still face many challenges associated with language barriers. Language barriers can create significant challenges for foreign investors in tackling New York City’s laws and regulations. These barriers may lead to difficulties in understanding contracts, adhering to local regulations, or communicating effectively during negotiations. Misunderstandings stemming from language differences can result in delays, legal complications, or financial risks. One solution to this problem is to cooperate with law firms that can not only speak but also provide you with valuable legal advice in your native language. People with a similar background to you in terms of culture and/or language who can truly understand the mentality of foreign investors and address your needs to achieve results aligned with your goals.

A skilled foreign direct investment attorney from Sishodia PLLC can help overcome these challenges. With experience in assisting international clients, we can provide clear guidance, accurate translation of legal documents, and effective communication throughout the investment process. We can help you understand your obligations and opportunities as an investor in New York, enabling smooth transactions and protecting your interests in a new market.

The Financial Crimes Enforcement Network (FinCEN)’s current Geographic Targeting Orders (GTOs) require U.S. title insurance companies and their agents to report the beneficial owners behind legal entities used in non‑financed residential real estate purchases in specified metropolitan areas, including New York City. The purchase price threshold is typically $300,000, though this can vary by location.

The present GTO runs April 15, 2025, through October 9, 2025, and covers payments via funds transfers, checks, and even virtual currency. It is crucial to note that this is an administrative order under the Bank Secrecy Act, not a court order.
These measures aim to curb illicit activities by increasing transparency in real estate transactions. The GTOs have provided valuable data on purchases potentially linked to illegal enterprises, aiding in tracking illicit funds and informing future regulatory actions.
Separately, FinCEN has finalized a nationwide Residential Real Estate Rule that will require reporting on specified non‑financed transfers to entities and trusts starting December 1, 2025. All parties involved in real estate should plan their transactions with these current and future dates in mind.

For foreign investors, especially those unfamiliar with U.S. regulations, compliance with these orders is crucial. Our experienced foreign direct investment attorneys at Sishodia PLLC can provide guidance on these requirements, helping investors understand and adhere to the necessary legal standards, thereby facilitating smoother and compliant real estate transactions.

Most foreign investors buy all-cash newly developed properties, but, for example, with 3 million to invest, the same investors could invest in two different properties by putting 50% down and financing the rest.

The Community Reinvestment Act of 1977 (CRA) applies to banking institutions with deposits insured by the Federal Deposit Insurance Corporation (FDIC), such as national banks, savings associations, and state-chartered commercial and savings banks. The CRA requires federal banking regulatory agencies to evaluate the extent to which regulated institutions are effectively meeting the credit needs within their designated assessment areas” (where institutions have local deposit-taking operations).

In spite of established banking regulations, challenges remain for potential investors planning to work with banking institutions in the U.S. In particular, new criteria in KYC banking regulations have led to a number of challenges, from rising costs to the difficulty of implementation.

In addition, investors can be hindered by the absence of their own credit story. Some lenders in New York are friendly to investors and will require only proof of personal financial track records. However, in this case, investors will pay back for this kind of “friendship” by providing a huge down payment and a hefty interest rate.

Working with foreign investors, we observed that HSBC runs the most competitive investor-friendly lending program. Some other lenders that we would recommend for foreign investors to check are: Citibank, Guardhill Financial, and private lenders, depending on the particular case, location of the property, and the investor’s background, investor’s portfolio, and liquidity. However, when you are a foreign investor, it is always better to work with a Mortgage Banker who has experience dealing with investors with particular backgrounds, as it may affect the process. Experienced Mortgage Bankers can guide you accordingly and make the entire borrowing process as smooth as possible.

While it is a norm for American owners to pay Real Property Taxes on properties they own, many other counties do not have an equivalent tax. Thus, it is not uncommon to meet foreign investors in the USA who miss their property tax payments and are faced with the Tax Lien Situation.

When a homeowner fails to pay taxes, the government agency can place a tax lien on the property for the unpaid amount. The property that has a lien attached cannot be sold or refinanced until the taxes are paid and the lien is removed. In tax lien states, when a lien is attached to the property, the taxing authority issues a tax lien certificate. These certificates can be sold to a third party at auctions. In tax deed states, when a third party purchases a tax deed, it is purchasing actual property. Thus, when a tax deed has been sold to a third party, the prior owner cannot reclaim their property.

According to the “State Guide To Tax Lien And Tax Deed Investing,” “New York is a mixed state. Some counties have tax lien sales and others have tax deed sales. Most of the state conducts deed sales. Nassau County sells liens, as do the five boroughs of NYC. The tax lien sales in NYC, however, are not open to investors. They are private sales where the liens are sold to city fund companies. Later on, these companies may have public sales.”

Once the lien is sold and a new owner threatens the investor with a summons to start foreclosure, it is an additional legal expense for the foreign owner. At that point, there isn’t much of a window for negotiations and to safeguard the property. The investor then has to pay off the lien amount along with any interest accumulated in full, cover the plaintiff’s attorney legal fees, and pay for their own legal fees related to the foreclosure and settlement procedure.

Buyers must generally withhold 15% of the amount realized when purchasing a U.S. real property interest from a foreign seller. If the buyer is an individual who will use the property as a residence and the price is $300,000 or less, no withholding is required. If the property will be used as a residence and the price is over $300,000 but not more than $1,000,000, the rate is reduced to 10%. FIRPTA is withholding, not the final tax. The seller can file to claim a refund or reduce withholding with an IRS certificate when appropriate.

It’s important for real estate investors to be aware of these rules, as overlooking FIRPTA requirements can lead to unexpected costs. For instance, a foreign investor might face a 15% withholding on the sale price when selling the property if proper guidance wasn’t followed during the purchase.

Whether you’re a foreign seller or buyer, consulting with an international real estate attorney can provide valuable insights into FIRPTA withholding and help you understand your obligations.

The IRS states that nonresident aliens (individuals who are neither U.S. citizens nor residents) are subject to U.S. estate tax on assets located within the United States.

These U.S.-situated assets include real estate, tangible personal property, and securities of U.S. companies. Notably, a nonresident’s stock holdings in American companies are subject to estate taxation, even if the certificates are held abroad or registered in the name of a nominee.

The United States has estate tax treaties with several countries, which can provide more favorable tax treatment to nonresidents by limiting the types of assets considered situated in the U.S. and subject to U.S. estate taxation. Executors for nonresident estates should consult these treaties where applicable. 

For nonresident aliens, an estate tax return must be filed if the fair market value of the decedent’s U.S.-situated assets exceeds $60,000 at the time of death. The estate tax rates range from 18% to 40%, depending on the value of the taxable estate.

In addition, the article “Federal Estate Tax Considerations for Foreign Investing in the United States,” adds that “the estate of a nonresident alien may deduct from the gross estate the value of property passing to the decedent’s surviving spouse if the spouse is a U.S. citizen or resident alien regardless of whether the spouse lives in the U.S. or abroad. However, if a spouse is also a non-resident alien, the unlimited spouse exemption does not apply.”