There is no single US business licence: regulated activities are licensed by federal agencies, states, localities or several at once, and some federal regimes cap foreign ownership, notably communications licences and air carriers. Selling to the federal government requires an active SAM.gov registration. For foreign owners of US real estate, rents bear 30% withholding unless treated as effectively connected, gains are taxed as effectively connected income, and buyers generally withhold 15% of the price under FIRPTA. Agricultural land deals can draw the Department of Agriculture into CFIUS review, and states add their own rules.
Sector licensing and foreign ownership limits
Licensing follows the activity. Financial services, telecommunications, transport, energy, healthcare and defence are licensed by federal agencies, by states, or both, so a sector map is needed before entry; incentives are mostly offered by states and localities.
Some federal statutes cap foreign ownership outright. A broadcast, common carrier or aeronautical radio licence cannot be held by a foreign government or by a company more than one-fifth owned or voted by aliens, and the FCC may refuse a licence where the licensee's parent is more than one-fourth foreign-owned if it finds that in the public interest. Only a US citizen can receive a certificate to operate as a US air carrier, and an aviation citizen must be at least 75 percent US-owned by voting interest, with a US citizen president, at least two-thirds US citizen directors and managing officers, and actual US control. A foreign-owned US corporation can still register aircraft with the FAA if they are based and primarily used in the US.12345
Selling to the federal government
To bid for federal contracts or apply for federal grants as a prime awardee, an entity must register in SAM.gov, which assigns its Unique Entity ID, and renew the registration every 365 days. A lapsed registration can stop an award or payment, so renewal should be diarised. State and local governments run their own vendor registration. Domestic preference rules such as Buy American were not researched and should be checked for each contract.6
Foreign ownership of real estate
Federal tax rules reach foreign owners of US property. Rental income paid to a foreign person is FDAP income taxed at 30% or a lower treaty rate unless it is treated as effectively connected with a US business, and gains on US real property interests are treated as effectively connected income.
When a foreign person sells, the buyer is generally the withholding agent and must withhold 15 percent of the amount realized under FIRPTA, reported on Forms 8288 and 8288-A. Withholding is generally not required where an individual buys a home for use as a residence for no more than 300,000 US dollars, where the seller certifies it is not a foreign person, or where the IRS issues a withholding certificate. A foreign corporation distributing US real property to its shareholders withholds 21 percent of the gain. Holding structures should be modelled for exit as well as for income.
For agricultural land, the Secretary of Agriculture may join CFIUS reviews case by case. Where CFIUS identifies unresolved risks it can impose mitigation conditions or refer a deal to the President; completed action gives the parties a safe harbour. Several states also restrict foreign ownership of agricultural land, which was not confirmed here.78910111213
| Sector or activity | Federal rule | Authority |
|---|---|---|
| Broadcast, common carrier and aeronautical radio licences | No licence to a foreign government; bar on licensees more than one-fifth foreign-owned or voted | Federal Communications Commission |
| Parent companies of those licensees | Licence may be refused where the controlling parent is more than one-fourth foreign-owned and refusal serves the public interest | Federal Communications Commission |
| US air carriers | Certificate only for a US citizen: at least 75% US voting interest, US citizen president and two-thirds of directors and managing officers, actual US control | Department of Transportation |
| Aircraft registration by a non-citizen corporation | US-organised, with aircraft based and primarily used in the US (60% of flight hours) | Federal Aviation Administration |
| Federal contracts and grants | Active SAM.gov registration, renewed every 365 days | General Services Administration (SAM.gov) |
| Sale of US real property by a foreign person | Buyer generally withholds 15% of the amount realized | Internal Revenue Service |
How it works, step by step
- Map federal, state and local licences for the planned activity and check any foreign ownership limits13Sector regulators (for example FCC, Department of Transportation); state agencies
- Register in SAM.gov and obtain a Unique Entity ID before bidding for federal work6General Services Administration (SAM.gov)
- On a purchase from a foreign seller, withhold under FIRPTA unless an exception applies, and file Forms 8288 and 8288-A910Internal Revenue Service
No timings or fees are shown unless an official source states them.
Documents usually needed
- Sector licence applications to the relevant federal agency and state regulator
- Ownership and control analysis for licences with foreign ownership limits
- SAM.gov registration and Unique Entity ID
- CFIUS declaration or notice where required or advisable
- Form W-8BEN-E for foreign recipients of US rental income
- FIRPTA Forms 8288 and 8288-A, or a non-foreign certification or IRS withholding certificate
Common mistakes
- Assuming a state-level licence covers activities that also need a federal licence, or the reverse.
- Structuring investment in a telecoms or aviation business without checking statutory foreign ownership and control limits.
- Letting a SAM.gov registration lapse during a bid or while awaiting payment.
- Acquiring US real estate without modelling tax on rents and on eventual sale, including 15% FIRPTA withholding on the gross price.
- Overlooking CFIUS and state rules when buying agricultural land or property near sensitive sites.
When the business crosses borders
- Foreign ownership caps in communications and aviation look through holding companies, so the nationality of ultimate owners and directors matters, not just the US entity.
- FIRPTA withholding is calculated on the amount realized rather than the gain, so a foreign seller may need an IRS withholding certificate to avoid over-withholding.
- Tax treaties may reduce withholding on rental income but generally do not remove tax on real property gains (not confirmed here).
Questions businesses ask
Can a foreign company buy US real estate?
The sources reviewed do not set a general federal ban, but tax applies to rents and gains, the buyer generally withholds 15% of the price when a foreign person later sells, CFIUS may review some transactions, and some states restrict foreign ownership of agricultural land. Confirm the rules for the specific state and property.87912
Can a foreign investor own a US telecoms or airline business?
Only within limits. Broadcast, common carrier and aeronautical radio licences cannot be held by companies more than one-fifth foreign-owned, with a discretionary one-fourth benchmark for foreign-owned parents. A US air carrier must be a US citizen, at least 75% US-owned by voting interest and under US control.1234
What do we need to sell to the US federal government?
An active SAM.gov registration, which gives a Unique Entity ID and must be renewed every 365 days, plus compliance with the contract's own requirements.6
What this guide does not yet confirm
These points need checking with a qualified local professional in the United States before you rely on them.
- Foreign ownership limits in maritime (Jones Act), nuclear, banking, energy and defence sectors were not confirmed; the FCC's process for approving foreign ownership above the benchmarks was not confirmed because the FCC page could not yet be checked.
- Federal domestic preference rules (Buy American, Trade Agreements Act) and SAM.gov requirements specific to entities outside the US were not researched.
- Federal and state incentives (for example Opportunity Zones, CHIPS-related programmes, state grants) were not researched.
- AFIDA reporting of foreign-held agricultural land and state agricultural land restrictions were not confirmed; the FIRPTA deposit deadline for withheld tax was not stated on the pages read.
- CFIUS jurisdiction over real estate near military installations is reserved for part B.
Sources and review status
Each statement is numbered to the source it was checked against. We use official sources where we can, and each statement says whether it was checked against an official or a secondary source. Sources last checked on 19 October 2026. None of it has been professionally reviewed yet: it is research checked against official and secondary sources by WONE Global, not legal or tax advice.
A broadcast, common carrier, aeronautical en route or aeronautical fixed radio station licence may not be held by a foreign government or its representative, or by a corporation of which more than one-fifth of the capital stock is owned of record or voted by aliens or their representatives. Federal, Communications Act section 310(a) and (b)(3), administered by the Federal Communications Commission.
Statutory text read on the Cornell Legal Information Institute reproduction of the United States Code; the official text is published at uscode.house.gov.
Those licences may also be refused or revoked where the licensee is directly or indirectly controlled by a corporation of which more than one-fourth of the capital stock is owned or voted by aliens, if the FCC finds that refusal or revocation serves the public interest. Federal, Communications Act section 310(b)(4). This is a discretionary benchmark rather than an absolute bar.
Statutory text read on the Cornell Legal Information Institute reproduction of the United States Code; the official text is published at uscode.house.gov. The FCC's procedure for seeking approval of foreign ownership above the benchmark (petition for declaratory ruling) was not confirmed; the FCC page could not yet be checked.
The Secretary of Transportation may issue a certificate of public convenience and necessity to provide air transportation to a citizen of the United States. Federal, 49 USC 41102(a). Applies to US air carriers.
Statutory text read on the Cornell Legal Information Institute reproduction of the United States Code; the official text is published at uscode.house.gov.
For aviation purposes a corporation is a citizen of the United States only if it is organised under US federal or state law, its president and at least two-thirds of its board and other managing officers are US citizens, it is under the actual control of US citizens, and at least 75 percent of its voting interest is owned or controlled by US citizens. Federal, 49 USC 40102(a)(15)(C).
Statutory text read on the Cornell Legal Information Institute reproduction of the United States Code; the official text is published at uscode.house.gov.
A corporation that is not a US citizen may register an aircraft with the FAA only if it is organised and doing business under US federal or state law and the aircraft is based and primarily used in the United States, meaning 60 percent of flight hours are on flights starting and ending in the US. Federal. US citizens and lawful permanent residents may also register aircraft.
An entity must hold an active SAM.gov registration to apply for federal awards, including contracts, as a prime awardee; registration assigns a Unique Entity ID and must be renewed every 365 days. Federal procurement and federal financial assistance. State and local procurement has its own vendor registration. Entities that only report as sub-awardees may need only a Unique Entity ID.
The page read does not state the cost of registration or the extra steps for entities located outside the US.
Rental income from US real property paid to a foreign person is FDAP income, taxed at 30% or a lower treaty rate unless treated as effectively connected income. Federal. Gains from the sale of real property are excluded from FDAP.
Gains and losses of a foreign person from US real property interests are treated as effectively connected income. Federal tax rule affecting foreign owners of US real estate (FIRPTA).
FIRPTA withholding rates on dispositions were not confirmed.
When a foreign person disposes of a US real property interest, the buyer is in most cases the withholding agent and must generally withhold 15 percent of the amount realized under FIRPTA. Federal. Reported on Forms 8288 and 8288-A. The withholding is a prepayment against the seller's US tax on the gain, not the final tax.
The page notes the rate was 10% for dispositions before 17 February 2016.
FIRPTA withholding is generally not required where an individual buyer acquires the property as a residence for no more than 300,000 US dollars, where the seller certifies under penalties of perjury that it is not a foreign person, or where the IRS issues a withholding certificate excusing withholding. Federal. The residence exception requires the buyer or a family member to plan to live there at least 50% of the days it is used in each of the first two 12-month periods. Notification requirements still apply. Other exceptions exist.
A foreign corporation that distributes a US real property interest to its shareholders must withhold tax equal to 21 percent of the gain it recognises on the distribution. Federal, FIRPTA. Domestic corporations distributing to foreign shareholders withhold at 15% for distributions after 16 February 2016.
The Secretary of Agriculture may take part in CFIUS reviews, case by case, of covered transactions involving agricultural land, agricultural biotechnology or the agriculture industry. Federal. Land acquisitions may also be subject to state-level restrictions, which were not confirmed.
Where CFIUS finds unresolved national security risks it may negotiate mitigation agreements or conditions or refer the case to the President, and parties that receive completed action obtain a safe harbour. Federal.
Questions on this topic
13 statements on licensing, sector rules and property in the United States
