Legal considerations of someone from a tax haven country investing in a US company


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Let's say a US citizen holds 51% of the shares of a company, and an Indian citizen living in the US invests in the company in exchange for 49% of the shares. Are there any legal implications to consider if someone from a tax haven country were to then invest in this company?

Foreign Legal

asked Jun 25 '11 at 07:01
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Maume
1 point
  • Are you saying that the person that holds 51% is a US citizen? – Zuly Gonzalez 9 years ago
  • the investor is indian citizen who will hold 49% will invest the money – Maume 9 years ago
  • @maume: Right, I understand that. What is unclear to me is how the US citizen fits into this. Is the US citizen the one that holds 51% of the shares, or is he a third party that may come in at a later date? – Zuly Gonzalez 9 years ago
  • the us citizen will hold 51% and indian citizen who will hold 49% is the same person who will invest also in us.am i clear? thank you – Maume 9 years ago
  • I think I understand now. I edited your question to make it easier to understand. Will this company be based in the US? – Zuly Gonzalez 9 years ago
  • yes this company will be in us and the 51% share holder who is us citizen lives in usa and the other partner who will hold 49%, does not not live in us but has visa for US and can do business in usa and he is the one who is indian citizen will invest from tax haven contry to this us based business. hope this is clear now. thank you – Maume 9 years ago

3 Answers


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I've handled investments by people from all over the world into US companies- typically LLCs through private placements of membership interests. First, do your diligence on the person- require that you see the person's passport, proof of residency, etc., and do a background check, and second, make sure that your purchase agreement contains standard securities law representations-usually that the person is an accredited investor:

http://www.sec.gov/answers/accred.htm I would also make sure that the person can make additional representations, such as "no money laundering", etc.

answered Sep 25 '11 at 00:21
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User6492
1,747 points

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My company (in US) has bunch of EU investors. Your purchase agreement just need to state your investors certify they comply with their local laws. That is it (from what I remember).

BUT, if this person is in US under Green Card or any kind of visa, that is when it might get trickier.

In either case, you have to have some help from an attorney. Don't be cheap with this. With all the Ponzi schemes going on and bubble underway, regulators are looking for opportunities to make an example out of you.

answered Jun 26 '11 at 13:54
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Apollo Sinkevicius
3,323 points
  • Thank you so much apollo. – Maume 9 years ago

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The investor's share purchase agreement needs to be drafted appropriately.

However, there is no prohibition against an Indian citizen in the U.S. - or anyone else - investing funds merely because they previously were in a tax haven country.

Disclaimer: This information does not constitute legal advice and does not establish an attorney-client relationship.

answered Oct 25 '11 at 03:14
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Dana Shultz
6,015 points

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