Questions & answers

When is notifying CFIUS of a foreign direct investment mandatory?

We know we may need to notify CFIUS of our investment into a luxury apartment building that a prominent Los Angeles developer has under construction, but we are not sure what details are necessary to include. We want to keep as many details private as possible.


Answers
  • Dan Flanigan

    Chair, Real Estate and Financial Services Department, Polsinelli
    February 05, 2018

    It is only mandatory when CFIUS has initiated its own investigation and requested information from the parties. It is unlikely that CFIUS would initiate its own investigation of this real estate investment. If you wanted the assurance that there would be no CFIUS problem, you would make a voluntary filing, and CFIUS would likely not be interested in following up to investigate the transaction you describe.

  • Sheri Chromow

    SPC Advisors, LLC
    February 13, 2018

    In connection with acquisitions of real estate assets, CIFIUS must be notified when foreign investors want to buy assets that affect the security of the US. The need to file with CIFIUS can come up in unexpected ways. For example, a client buying an office building in DC had to file because a US owned company deemed vital to US security was a substantial tenant. With more facts, an advisor can provide you with the correct response.