In the current economic environment, there are many opportunities and pitfalls that may arise from doing business in Latin America. Tax can be a value driver when looking at such investments but also can be fraught with challenges. Mergers and Acquisitions in Latin America present an occasion where the complex U.S. tax system interacts with some of the world’s most vexing tax systems.
Considerations of entry and ultimate exit along with operational matters must be considered. The U.S. Treasury’s recent Foreign Tax Credit guidance along with other recent guidance provides a framework for U.S investors to navigate and ultimately capitalize on business prospects in Latin America.
The following topics are discussed:
• Acquisition and structuring considerations, including investment vehicles and debt push down in Latin America
• Selected U.S. tax considerations while doing business in Latin America, including potential FTC and PFIC concerns-
• Efficient exiting strategies from Latin American investments including non-resident capital gains mitigation
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