I am a real newbie real estate investor. My friend and I are planing to set up a LLC in Maryland or Virgin Island. Does anyone know pros and cons for a foreign country based company doing active investing in state of Maryland in the U.S. Plus what would be pros and cons for doing real state investing as a LLC entity in Maryland. I like to hear about factual information more than subjective thoughts about the topic.
You wouldn't be able to do any real estate investing in Maryland with just the alien corporation. It would have to obtain a Certificate of Authority to do business in Maryland, pay taxes in Maryland on the money it earns here and the cost to do all of this is the same $300 a year you'd pay for just a Maryland LLC. There's no business purpose to structuring the company your way that I can think of.
Look into the Patriot Act. The link below will explain the world we live in. An LLC in Maryland is easy, cheap and provides the protection you are probably looking for.
You don't want to learn about Maryland's non-resident withholding laws as you go. Or federal for that matter.
This is a no-brainer... form your LLC in MD if that's where you'll be investing.
@Hyungwook Lee To me it would depend on how much income you are talking about. If I was going to generate a large amount of income in Maryland, I would talk to a good tax attorney. A more complex strategy might be a better fit.
If you are talking about a few rent houses it would probably not be worth the trouble to have a complex system that will increase the reporting requirements.
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