(iii) Restrictions for Foreign Investors: Licensing agreements tend to be more negotiable and flexible, but some licensors may require local partnerships or operational oversight to ensure brand consistency and compliance.
5.4 Regulatory Requirements and Qualified Investors Foreign investors must comply with U.S. legal and financial requirements when acquiring a business. Some industries impose restrictions on foreign ownership, particularly in sectors like telecommunications, defense, and energy, due to national security concerns. Additionally, certain investment opportunities—such as venture capital and private equity deals—require investors to meet specific financial criteria. 5.4.1 Accredited Investor Status Under Securities and Exchange Commission (SEC) regulations, investors must qualify as accredited investors to participate in private securities offerings. To meet this status, an investor must have:
(i) A net worth of at least $1 million (excluding their primary residence); or
(ii) An annual income of $200,000 ($300,000 for joint filers) for the past two years, with the expectation of maintaining this level.
5.4.2 State-Specific Regulations
Some states impose additional financial or residency requirements for foreign investors: (i) California: Foreign investors seeking to purchase certain businesses, such as those in professional services (law firms, medical practices), may be required to have a U.S. resident partner or meet additional licensing requirements. (ii) Florida: Imposes restrictions on foreign ownership of agricultural land, requiring disclosures for investments exceeding a certain threshold. (iii) Texas: Limits foreign ownership in critical infrastructure industries, such as energy and telecommunications, requiring state-level approval for certain transactions. 5.4.3 CFIUS Review and National Security Considerations The Committee on Foreign Investment in the United States (CFIUS) is a U.S. government agency that reviews foreign investments for national security risks. CFIUS examines transactions where a foreign entity acquires substantial control over a U.S. business involved in: (i) Critical Technology: Businesses developing sensitive technologies, including AI, semiconductors, and cybersecurity.
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