Inbound Investment: Tax Consequences for Non-U.S. Investors Acquiring Stock or Debt Instruments of U.S. Issuers

Summary

This practice note examines the principal U.S. federal income tax consequences that non-U.S. investors in stock and securities of U.S. issuers should consider before making an investment. In particular, they face special tax issues related to withholding, taxation of capital gains, taxation of income “effectively connected” with a U.S. trade or business, and the Foreign Investment in Real Property Tax Act (FIRPTA) regime that taxes non-U.S. investors with respect to investments in U.S. real estate, including interests in participating debt and interests in certain U.S. corporations that hold real property.