Foreign Ownership Regulations in the USA

Published on October 22, 2025 and written by Cyril Jarnias

The United States remains a top destination for foreign investors, offering numerous opportunities in real estate and business ventures. However, navigating U.S. foreign ownership regulations can prove complex. This article will guide you through the essential aspects to know for investing confidently in the USA.

An Open Playing Field, But Monitored

Contrary to some misconceptions, the United States is generally very open to foreign investment. There are no general federal restrictions preventing non-residents from acquiring real estate or establishing businesses on American soil. This open policy is rooted in American tradition and aims to attract foreign capital to stimulate the economy.

However, this freedom comes with increased oversight, particularly since the September 11, 2001 attacks. The U.S. government has implemented control mechanisms to ensure foreign investments do not threaten national security. The Committee on Foreign Investment in the United States (CFIUS) plays a key role in this process, carefully reviewing transactions involving sensitive or strategic sectors.

In 2018, Congress strengthened this regulatory framework by passing the Foreign Investment Risk Review Modernization Act (FIRRMA). This law expands CFIUS’s scope and imposes mandatory declarations for certain types of investments, particularly in critical technologies and essential infrastructure.

Navigating the Administrative Maze

Investing in the United States requires familiarizing yourself with an approval process that may seem complex at first. Here are the key steps to know:

1. Identifying the Type of Investment

The first step is to precisely determine the nature of your investment. Is it a real estate purchase, business creation, or acquiring a stake in an existing company? Each investment type may be subject to specific rules.

2. Checking Sector-Specific Restrictions

Certain sectors are subject to particular restrictions for foreign investors. This notably applies to:

• Commercial aviation
• Telecommunications
• Nuclear energy
• Defense
• Certain mining sectors

If your investment concerns one of these sectors, additional authorizations will likely be necessary.

3. CFIUS Review

For significant investments or those in sensitive sectors, a CFIUS review may be required. This process aims to assess potential implications for national security. Since FIRRMA’s adoption, certain investment types require mandatory declarations to CFIUS.

4. Obtaining Local Authorizations

Remember that the United States operates on a federal system. In addition to national regulations, you must consider laws specific to each state, and even each municipality. For example, some states impose additional restrictions on foreigners purchasing agricultural land.

5. Tax Compliance

Foreign investors must obtain a tax identification number (ITIN or EIN depending on the case) from the Internal Revenue Service (IRS). This number is essential for all administrative and tax procedures in the United States.

Your Rights and Duties as a Foreign Investor

Once your investment is approved, you benefit from many rights in the United States, but you must also fulfill certain obligations.

Extensive Rights for Foreign Owners

Foreign investors generally enjoy the same rights as U.S. citizens regarding property ownership. You can:

• Buy, sell, and lease real estate without restrictions
• Create and manage businesses in most sectors
• Benefit from U.S. legal protections, including intellectual property rights
• Access U.S. courts to enforce your rights

These extensive rights make the United States an attractive destination for investors worldwide. However, it’s important to note that certain tax benefits, like mortgage interest deductions, may be limited for non-residents.

Obligations Not to Overlook

In exchange for these rights, foreign investors must comply with several obligations:

1. Tax Filings: You must report income generated in the United States, even if you don’t reside there. Tax rules for non-residents can be complex, especially regarding real estate capital gains tax.

2. Compliance with Local Laws: You are required to comply with all U.S. laws and regulations, whether federal, state, or local. This includes environmental, employment, and safety laws.

3. Transparency: Foreign investors must demonstrate transparency in their transactions. Certain significant investments may require specific declarations to U.S. authorities.

4. Information Updates: You must keep your information updated with U.S. authorities, particularly in case of status or ownership changes.

Winning Strategies for Foreign Investors

To maximize your chances of success when investing in the United States, here are some essential tips:

1. Do Your Homework

Before diving in, take time to thoroughly understand the U.S. market and local specifics of the region where you wish to invest. The United States is a vast and diverse country, with opportunities and challenges that vary significantly from state to state.

2. Build a Local Team

Surrounding yourself with local professionals is crucial for navigating the U.S. system. This includes:

• An attorney specializing in international business law
• An accountant familiar with tax rules for foreign investors
• An experienced real estate agent (for real estate investments)
• An investment advisor to guide your strategic choices

3. Choose the Right Legal Structure

Creating a U.S. legal entity, like an LLC (Limited Liability Company), can offer several advantages, particularly in terms of asset protection and tax optimization. However, the choice of structure depends on your specific situation and objectives.

4. Stay Informed of Regulatory Changes

U.S. laws and regulations can evolve quickly, especially in the current context of geopolitical tensions. Stay alert to changes that could affect your investment.

5. Plan Your Exit Strategy

From the beginning, think about your exit strategy. Tax rules for property sales by foreigners can be complex, and good planning can save you a lot of money.

6. Diversify Your Investments

Don’t put all your eggs in one basket. The United States offers a wide variety of investment opportunities, from real estate to tech startups. Wise diversification can reduce your risks and maximize your returns.

7. Cultivate Local Relationships

Networking is crucial in the United States. Participate in professional events, join local business associations, and build a strong network. These connections can open new opportunities and help you better understand the local market.

Conclusion: A Promising Market for Savvy Investors

Investing in the United States as a foreigner presents both challenges and immense opportunities. Although the regulatory framework may seem complex at first, it primarily aims to protect the U.S. economy while remaining open to foreign capital.

The key to success lies in meticulous preparation, a thorough understanding of the rules of the game, and the ability to adapt to an ever-changing environment. With the right strategy and proper advice, foreign investors can not only successfully navigate the U.S. economic landscape but also leverage the numerous opportunities offered by the world’s leading economy.

Remember that each investment is unique and rules may vary depending on your specific situation. It is always recommended to consult local experts to guide you in your U.S. investment project.