Beginning this month, the U.S. government can now block foreigners from taking possession of real estate anywhere in the country when it concludes the deal may threaten U.S. national security. In the past, only foreign investment in U.S. businesses required the parties to consider the risk that the government would object on national security grounds. Now parties entering into a broad array of real estate deals with foreigners affecting land in particular parts of the country will also have to consider these risks, even if they do not involve any investment in a U.S. business.
On August 13, 2018, the President signed into law new legislation that will impose heightened oversight of investments by Chinese persons in U.S. businesses. The Foreign Investment Risk Review Modernization Act (FIRRMA) provides greater specificity about the types of investments that the Committee on Foreign Investment in the United States (CFIUS), an inter-agency committee of the U.S. government, may review and in turn block due to their potential threats to the national security of the U.S. The new law affects foreign direct investments from any country, but China is one of the countries it is particularly likely to affect.
One of the things any active investor in the United States almost always needs is a place in which to operate its business. Buying or leasing property can be tricky, however. For example, one can face liabilities by merely becoming a lessee of real property with environmental problems, such as contamination from prior uses. Zoning regulations might not allow a company to use the property as planned. Disputes or judgements associated with real property can create huge headaches for a new owner or tenant, alike.
Foster Garvey’s International practice group comprises a cross-disciplinary group of attorneys practicing in areas ranging from business transactions, immigration, maritime, government regulatory work, transportation and logistics and estate planning. The group members include bilingual and multicultural attorneys who are well-versed in handling these subject matters in a cross-border context. A number of attorneys have been actively practicing in the international arena since the early 1970s.