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I am a United States citizen and I want to borrow money from a foreigner for business. Any advice?

I have real estate developments and I need advice, feedback, and links to the laws for my question, please.

Thank you in advance.

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1

The laws are going to vary, depending on where you are and where your foreign investor is. This is hardly one size fits all.

As for advice - check the paperwork. Better yet, have a lawyer do so. You need to be absolutely certain you're not forking over a lien or an ownership interest in your business if you don't want to. Don't make those things unpleasant surprises later.

Thanks! Most appreciated.
Brad

1

The foreign lender is more at risk than you are in this case. They will have to pay taxes on interest received subject to the tax rates in their own country. They will require solid assurance from you that the loan capital and interest will be repaid over a specified period of time. Like any financial institution, they will probably insist on some form of secure collateral, which may involve personal guarantees. Be careful what you commit to, because no business is completely foolproof. Try and avoid any personal obligations.

From a legal perspective, you should insist that the loan agreement be subject to USA federal and state jurisdiction. This agreement will require the services of a lawyer.

As far as your business is concerned, the loan is entered on your financial statements like any other loan. Interest and capital payments are made as they occur, in accordance with the loan agreement.

Thanks! Most appreciated.
Brad

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