Legal Document Translations for Foreign Investors
There is an increased need for legal document translation services for foreign investments in the U.S. real estate, as the United States continues to be the world’s largest recipient of foreign direct investments (FDI). It has been a meme for quite some time now. Investors of foreign countries are “buying up” all the prime real estate in the United States. While such a sweeping statement is a bit of an oversimplification, it is based in truth.
In fact, there are a number of well-known examples where foreign investors are obtaining the controlling interest in many prime U.S. real estate locations. For example:
• Chinese company Anbang Insurance, purchased the iconic New York City hotel, the Waldorf Astoria Hotel, for $2 billion;
• A group of Canadian companies cooperated to develop office buildings in Washington DC;
• The real estate arm of a Canadian company acquired the controlling interest in Wells Fargo Center in Seattle, 1411 Broadway in New York City, and 73 office buildings in Silicon Valley; and it entered into a co-investment in the $5.3 billion purchase of Stuyvesant Town/Peter Cooper Village in New York City;
• Chinese company Greenland Holding Group Co. purchased a 70% interest in the 22-acre commercial and residential development in Brooklyn, called Atlantic Yards;
• Chinese and Brazilian investors acquired a 40% share in the General Motors building in New York City;
• China-based Fosun International Ltd. purchased the famous One Chase Manhattan Plaza;
• Norway’s sovereign fund acquired part interest in PNC Place in Washington DC, and Times Square Tower in New York City;
• A Middle Eastern investor purchased “The Avenue,” which is a 335-unit luxury multi-family development in Washington DC;
• Israeli company, Alony Hetz Properties, acquired part interest in a Washington DC-based developer called Carr Properties.
The Association of Foreign Investors in Real Estate (AFIRE) Survey Results
Every year, AFIRE conducts a survey that takes a granular look at the nature and extent of real estate investing by foreign companies and individuals. The trend that can be seen from the annual surveys can be fascinating.
First, investment in U.S. commercial real estate by foreign investors continues to increase. Moreover, the increase is not just in the major U.S. cities like New York, Los Angeles, San Francisco and Miami.
Second, the largest source countries for foreign investors interested in U.S. real estate continues to be Canada, China, and several Middle Eastern countries. There is also substantial investment from Western Europe, Israel, and Singapore.
Finally, the United States is viewed by foreign investors as the country providing the best opportunity for capital appreciation. The majority of investors do not see any decrease, and actually expect modest or major increases, in their investments despite some concern regarding higher interest rates.
Top U.S. Cities for Investment
New York had been the top global city for foreign real estate investment in both 2016 and 2017. However, in the 2018 survey, London just edged out New York as the top city for real estate investment.
In the United States, the preferred property type for investors are multifamily and industrial properties. Retail property moved up from fourth place to third in the 2017 survey, whereas office property dropped down to fourth place. Hotels were at fifth place in the 2017 survey.
Based on the 2017 survey, the top five U.S. cities for foreign investment were:
• New York
• Los Angeles
• San Francisco
• Washington, DC
What Does All This Investing in the U.S. Mean for U.S. Lawyers?
U.S. real estate lawyers have their work cut out for them when it comes to this upward trend of foreign real estate development. Lawyers must be able to navigate four major things to be effective in assisting – and giving counsel to – any foreign investor.
1. Legal preparation. Lawyers handling U.S. real estate transactions for foreign investors must have an expertise in tax, regulatory, and other matters that face non-U.S. investors. They also need to have access to document translation services company that provides business document translation services.
2. Cultural understanding. It is not enough to know the law. Lawyers helping their foreign clients should also know the difference between legal norms of the U.S. compared to the client’s home country.
3. Issues Particular to a Foreign Investor. There are some issues that are irrelevant to a U.S. investor, but could be vital to an investor outside the U.S. The transacting lawyer needs to be aware of any such landmines.
4. The Acronyms of Foreign Investment. Like any area of the law, lawyers must be cognizant of the statutes, entities, and other rules particular to foreign investment. Those things include the Foreign Investment in Real Property Tax Act (FIRPTA), the Committee on Foreign Investment (CFIUS), and real estate investment trusts (REITs).
Legal Translators for Lawyers Can Help You Effectively Represent Foreign Investors
Foreign investors vary in sophistication, and may have varied methods for going about their own business. You, as their attorney, need to be flexible and understand the client’s needs. Given the many idiosyncratic rules of American law, you should be prepared to spend a great deal of time teaching your client the basics of any transaction, particularly if the client has the mistaken belief that the transaction would be similar to one in their home country.
What would make this explanation process far easier is to partner with a reliable and professional legal translation service. All Language Alliance, Inc. is just that service for you. Having the facility to accurately translate legal terminology, experience in translating highly technical documents, and to understand the cultural background of any foreign client, our translators and interpreters for attorneys providing legal translation and interpreting services from and into Mandarin Chinese, Hebrew, German, French, Spanish, Arabic, Turkish, Norwegian, Swedish, Korean, and other languages will take the burden off of your shoulders to the degree you need. Contact our legal document translation service today to learn what we can do for you.
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