Investing in non-controlled companies foreign companies carries a unique set of issues not experienced by Americans who invest in wholly owned operations.
The biggest hurdle often faced in investing abroad is the “passive foreign investment company” (PFIC) rules. Under these rules holding an investment in a passive foreign investment such as a holding company, mutual funds, or ETF can carry significant reporting obligations and substantial tax costs.
There are many elections that can be taken advantage of to mitigate these taxes such as the QEF election, the mark-to-market elections, deemed disposition elections and tax deferral elections.
Our team is experienced in working with these complex filings and can help you navigate the complex tax landscape associated with investing abroad.