The Corporate Blocker Advantage

Direct ownership of US real estate by a foreign individual is often the most heavily taxed structure available.

By interposing a US domestic C-Corporation between the foreign investor (or their offshore holding company) and the real estate asset, the "Corporate Blocker" fundamentally changes the tax paradigm.

How it Works

The foreign investor capitalizes an offshore company (e.g., in a zero-tax jurisdiction), which in turn wholly owns a US C-Corporation (the Blocker). The Blocker acquires the real estate.

• No FIRPTA on Sale: When the property is sold, the seller is the US Blocker, not a foreign person. Therefore, the 15% FIRPTA withholding on the gross sale price does not apply.
• No US Tax Returns for the Investor: The Blocker files the US corporate tax return. The individual foreign investor is completely shielded from IRS filing requirements.
• Estate Tax Shield: US estate tax (up to 40%) applies to US-situs assets held by foreign individuals upon death. Stock in an offshore holding company is not a US-situs asset, effectively shielding the investment from US estate tax.