Is there a way to keep my investments private?

We think there is a way for celebrities and others investing in real estate and other business ventures to keep their identities private, if done so for legitimate reasons (such as keeping fans from knowing where you live). What you do is form a pair of limited liability companies under Delaware law. The first Delaware LLC registers to do business as a foreign LLC in the state where the property is located (California in this example), then buys the property there. The first LLC has to file a statement of information in California listing its manager, which is the second Delaware LLC. This works because the second Delaware LLC does not have to be registered as a foreign LLC in California simply because it manages the first Delaware LLC and owns the California property. Under Delaware law, the name of the “authorized person” forming the LLC has to be disclosed, but that person can be someone you trust other than you, the investor. So your identity is shielded from prying eyes. There is a caveat in that the identities of investors in LLCs buying high-priced residential real property in certain U.S. locations, including Miami, New York City, and Los Angeles County, have to be disclosed to the federal Financial Crimes Enforcement Network, or “FinCEN,” which uses the information to investigate for illegal money laundering. But the information is not publicly disclosed, so your identity should remain secret even if you buy a property requiring disclosure to FinCEN. There is more detailed information in our articles on How to Use a Delaware LLC to Safeguard Identity and Using a Delaware LLC to Safeguard Identity for Legitimate Reasons: The Impact of FinCEN’s Reporting Requirements.