Recommendations for Brazilian investments in the US – The US continues to be the most attractive country for investment of foreign capital, in this case, Brazilian. In the real estate area prices have fallen so much because of the crisis that it can be said that real estate today is cheaper than in brazil and still much cheaper than in europe. The U.S. is considered a safe place to invest because of its stable government and strong economy, as well as strict regulations which protect investors from fraud. The opportunities also in the industrial and commercial area are fantastic. at any rate, the country really is the “Mecca” for foreign investment. This is proven by the fact that Brazil is the largest foreign investor in productive investments in Florida. Thus, investors as Embraer and others chose Florida for their investments.
However, the U.S. also has an extremely complicated regulatory system. The legality in the country is taken very seriously and violations are severely punished. Thus, Brazilian investors should be very careful not to violate the law, because the consequences can be onerous, both financially as well as in jail sentences if there is a criminal violation.
Tax rates on foreign investment in the us have historically been lower than those of other developed countries. However, investment in a us business or real estate will result in liability for us income tax on the income received from that investment, and a portion of that income may have to be withheld and remitted to the US Internal Revenue Service. It is critical to make sure that the investor does not have to pay tax on the same income to both the US and Brazil. Thus, it is essential to consult with a tax advisor who knows and understands the tax rules of both the US and Brazil for taxation of international investments.
Contracts are enforced to their letter and the terms are not always very clear to Brazilian investors. in addition, the U.S. legal system is different from what Brazilians are familiar with. There are planning techniques available that can be very useful for asset protection and also in the organization of the family and hereditary succession. Hence, for example, a properly formed and documented trust can provide the possibility that legal ownership of an investor’s property and assets in the name of a trustee, which will protect them against potential creditors and minimize liability for us inheritance tax.
In view of these facts, it is imperative that Brazilian investors always seek the assistance of competent lawyers who have knowledge of both laws in american and Brazilian jurisdictions.