U.S. Crowdfunding or Syndication Companies for Canadians?

8 Replies

Hi fellow BP members,

I'm wondering if there are any U.S. based crowdfunding sites or syndication companies in which us Canadians can invest in?  Sites such as Fundrise and RealtyMogul are geared to U.S. citizens or require a U.S. based address or need to have a U.S. bank account.

Any help and info to navigate me in the right direction would be greatly appreciated.

Thanks.

Dino

They do exist. All of my investors historically are US-based, but I have had some international interest. This is a great article on the topic by Omar Khan. As far as I can tell, the basics are that you need a US-based entity that can pay taxes to the Feds.

Originally posted by @Taylor L. :

They do exist. All of my investors historically are US-based, but I have had some international interest. This is a great article on the topic by Omar Khan. As far as I can tell, the basics are that you need a US-based entity that can pay taxes to the Feds.

Taylor,

Technically, what you suggested missed the mark. You suggested a USA legal entity making an investment in a  a crowdfunding opportunity. The original question focused on a Canadian directly investing in the crowdfunding opportunity. Yes, a Canadian can open a company. Just pointing out that this is not the same. There are extra complications investing through another layer (tax and reporting complications).

@John Corey you're the international expert! I was under the impression that non-US persons cannot directly invest and have to establish a US company or some other tax ID number. There may be other ways around, I don't know.

Originally posted by @Taylor L. :

@John Corey you're the international expert! I was under the impression that non-US persons cannot directly invest and have to establish a US company or some other tax ID number. There may be other ways around, I don't know.

The USA does not stop non-residents from investing. As you noted, a tax ID may be required up front. Or, the IRS expects funds to be held back when the property is sold when the owner does not have a USA tax ID (personal or company depending on the owner of the property)

So, different paths with different complications. It can be made to work fine. What gets more interesting is how the non-resident deals with the tax implications in the home country. It might be better not to have a pass thru entity in the USA if the home country has a high tax rate. It really will depend on the person, the transaction and the countries involved. 

Most syndicators that I know won't accept foreign investors. It's complicated, but there is a tax liability that falls on the sponsor if you decide to not pay taxes. It is possible, but as @Taylor L. suggested, it's better for everyone to just set up a domestic entity. 

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