U.S. LLC Comparison: Choosing the Best Structure for LATAM Investors

Before diving into U.S. real estate investments, it is vital to understand the legal vehicle that will hold the assets. The choice of state for your Limited Liability Company (LLC) is a strategic decision that impacts taxes, annual fees, and operational compliance. Here are some key factors to consider:

A modern residential building being developed with cranes and scaffolding.

Legal Structure

Conduct thorough research to identify the compliance demands and fee structures of key states. Look for:

• Location: Analyze the state where the physical real estate assets will be located (e.g., Florida).

• Fees: Determine the annual state fees (e.g., Florida's Annual Report fee vs. other states' franchise taxes).

• Asset Protection: Monitor the level of legal protection afforded to single-member LLCs in each jurisdiction.

Creating a Financial Strategy Plan

A well-structured plan is essential for guiding your U.S. investment journey. Your plan should address the legal entity's financial requirements:

Financial Projections

Include detailed forecasts regarding the LLC's operational costs, such as:

• Estimated Annual Fees: Projected costs for state compliance and Registered Agent services.

• Initial Capital: Outline the initial funds required for banking and establishing the LLC's credit profile.

  
  

Banking Strategy

Develop a clear strategy for opening a U.S. commercial bank account to maintain legal separation of funds, which is critical for compliance and future financing.

Financing Your Investment Vehicle

Securing the legal and financial infrastructure is the critical first step in real estate development. Here are some common structuring options for non-residents:

Florida LLC (Situs of Assets)

The most direct approach for purchasing property in Florida. Florida offers:

• Operational Simplicity: Low annual maintenance fee.

• Closer Ties to Banking: Banks and lenders in Florida prefer to deal with Florida-based LLCs for Florida real estate.

Delaware LLC (Holding Company)

Often used for maximum privacy and complex corporate structures. Delaware offers:

• Strong Privacy: High anonymity for the owner (Sole Member).

• Legal Precedent: Well-established corporate case law.

• Complexity: Can require multiple levels of structure if the assets are outside of Delaware.

Conventional Financing Access

The chosen LLC structure determines how effectively the entity can qualify for traditional mortgages from U.S. banks. Lenders prefer simplicity and clear operational intent tied to the location of the collateral (the property).

Conclusion

Developing a successful U.S. real estate investment portfolio requires careful planning, research, and execution of the legal structure. By focusing on compliance, strategic financing, and choosing the right structure (often the Florida LLC for Florida assets), you can achieve success in this rewarding field. Remember to stay informed, adapt to changes, and continuously seek professional guidance.