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Veranda Holdings offers investors from India the opportunity to look beyond India’s borders for investments in California. We work with our investors to facilitate all aspects of real estate acquisitions and management by working in tandem with legal advisors from both countries to mitigate risks while fostering lasting relationships with our investors.

Under current U.S law, direct foreign ownership of U.S real estate is subject to the regulations of the Foreign Investment Real Property Tax Act (FIRPTA). The statutes of FIRPTA stipulate that upon disposition, the foreign transferor is subject to a FIRPTA withholding tax of 15% of selling value. While the foreign transferor may ultimately be able to recover their withholding amount, to do so necessitates completing a lengthy filing process that requires extensive documentation, as well as costly legal and tax consultation. Veranda Holdings does not advocate this approach for acquiring real estate in California by foreign entities; Veranda Holdings can offer its investors an investment structure that does not bring the FIRPTA statutes into play.

Multi-member LLC’s taxed as partnerships, that include foreign parties, are not subject to FIRPTA. Importantly, Veranda Holdings standard investment platform for its foreign partners is a multi-member LLC structure and, by using this LLC structure, at the time of selling its interests, it will be considered to be a domestic (U.S) and not a foreign (India) entity.Veranda Holdings and its legal advisors also work with its investor partners from India to develop a fee-based management framework, which enables us to work for you as your investment managers.

What is FIRPTA

The disposition of a U.S. real property interest by a foreign person (the transferor) is subject to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) income tax withholding. FIRPTA enabled the United States to tax foreign persons on dispositions of U.S. real property interests.

A disposition means “disposition” for any purpose of the Internal Revenue Code. This includes but is not limited to a sale or exchange, liquidation, redemption, gift, transfers, etc. Persons purchasing U.S. real property interests (transferees) from foreign persons, certain purchasers' agents, and settlement officers are required to withhold 15% (10% for dispositions before February 17, 2016) of the amount realized on the disposition (special rules for foreign corporations).

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Veranda Holdings Advantage

Our investment platforms are California registered multi-member LLC entities, taxed as partnerships, with Veranda Holdings and its investors as partners. Such LLC platforms are exempt from FIRPTA and offer pathways for investors from India to acquire California real estate. Once the ownership and management framework is established, Veranda Holdings engages with the brokerage community to pursue both on and offmarket real estate acquisitions in accordance with our partners’ defined investment profiles. Each opportunity is vetted with industry-leading standards of evaluation and diligence. Following acquisition, an active asset management and reinvestment strategy, tailored for the asset, is implemented by which Veranda Holdings seeks to improve the asset’s competitive position within its marketplace.