9. FOREIGN INVESTMENT RESTRICTIONS AND COMPLIANCE Foreign investors looking to establish or expand businesses in the U.S. must navigate a range of regulatory requirements designed to protect national security and economic interests. While the U.S. is generally open to foreign investment, certain restrictions and compliance obligations apply, particularly in sensitive industries. Below are key considerations for foreign investors. 9.1 Real Estate Ownership Restrictions Foreign individuals and entities can purchase real estate in the U.S., including commercial and residential properties. However, restrictions apply to specific asset types:
9.1.1 Agricultural Land
The Agricultural Foreign Investment Disclosure Act (AFIDA) requires foreign investors to report purchases of farmland to the U.S. Department of Agriculture.
9.1.2 Critical Infrastructure Investments in properties near military bases, airports, and energy facilities may face heightened scrutiny due to national security concerns. Some states impose additional restrictions on foreign ownership of land deemed strategically important. 9.2 OFAC and Sanctions Compliance The Office of Foreign Assets Control (OFAC) enforces U.S. sanctions and trade restrictions, limiting business activities with individuals, companies, and countries on sanctioned lists. Foreign investors must conduct due diligence to ensure they are not engaging with restricted parties, as violations can result in severe fines, asset freezes, and legal action. The Specially Designated Nationals (SDN) List, maintained by OFAC, provides a database of entities barred from U.S. business transactions. 9.3 Committee on Foreign Investment in the U.S. (CFIUS) Review The Committee on Foreign Investment in the United States (CFIUS) reviews foreign investments in businesses operating in sensitive sectors, such as:
9.3.1 Defense and Aerospace Investments in companies involved in military or intelligence-related technologies.
Telecommunications andTechnology Deals involving critical communications infrastructure or advanced technologies.
9.3.2 Energy and Critical Resources Transactions affecting the supply of energy resources, such as nuclear power or rare earth minerals.
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