Liquor Licensing for Non-US Citizens

WHAT FOREIGN INVESTORS CONSIDERING U.S. PROPERTIES

THAT MANUFACTURE, SELL OR DEAL WITH LIQUOR

NEED TO KNOW ABOUT

LIQUOR LICENSING FOR NON-US CITIZENS

In August, for the first time ever, metro Phoenix was among the top 10 U.S. markets in terms of foreign investment in commercial-real-estate assets*. A liquor license can be essential to the success of certain commercial-real-estate assets such as hotels, resorts, golf courses, bars, restaurants, clubs, vineyards and wine shops. One of the most common questions from Canadian, Mexican, Middle Eastern, Asian and other non-U.S. Citizen Buyers is “What are the requirements for foreigners buying and owning properties with liquor licenses in Arizona?”  Fortunately, they are not required to be US Citizens to acquire and own liquor licenses in Arizona.

In Arizona, unlike most states, it’ possible and fairly simple for a foreign investor to own a full or partial interest in a liquor license as a non-US citizen, but there is a requirement that you have a qualified “Agent”. The designated Agent must be a US Citizen or a legal resident alien, and a resident of Arizona. This Agent requirement is the same requirement as for all corporations or limited liability companies. All foreign corporations and foreign limited liability companies must also register with the Secretary of State and be authorized to do business in Arizona. Non-US Citizen Applicants, their Agents, operations Managers and other persons involved with corporations or limited liability companies must be at least 21 years of age and qualify.

The existence of a non-US Citizen’s criminal record does not always preclude a person from licensure.  However, foreign applicants with criminal records must be able to provide evidence that they have not been convicted of a felony in the last 5 years or they may be denied a license.  Every applicant, including any foreign investor, will be required to provide a complete financial disclosure statement, a detailed questionnaire and get fingerprinted, and (like all other states) undergo an FBI background check. This process can take up to 4 months to complete.

If you are a foreign investor or represent one, do your research early; determine immediately whether the commercial property, asset or business being acquired will need to manufacture, sell or deal with liquor in order to be profitable. Many foreign investors, analysts and business representatives make the mistake of spending too much time focusing on the sticks and bricks and not the liquor, only to find out later that they can not be licensed and/or even acquire the asset. Before a foreigner’s contract is even drawn up to purchase/develop this type of a property or business, determine who will act as the qualified Agent and how title will be held for liability and tax reasons. Depending on the foreigner’s country, a foreign investor or foreign entity may have to be taxed on several levels. Our suggestion is to work with a qualified group of professional consultants who specialize in foreign investors including:  a CPA/Tax Advisor, Business Broker, Realtor, Insurance Agent, Title Company and Attorney.

Theresa B. Keeley, Esq.

 

Theresa is an attorney with the law firm of Santerre & Vande Krol, Ltd. She focuses on all aspects of Title 4, Alcoholic Beverages and Liquor Laws and Commercial Real Estate and Business transactions representing buyers, sellers and lenders and can be reached at (480) 991-3990 or [email protected]  Please note that this article is of a general nature and may not be updated or revised for accuracy as statutory or case law changes following the date of first publication. Further, this article reflects only the opinion of the author, is not intended as definitive legal advice and you should not act upon it without seeking independent legal counsel.

*The Republic/AZ Central.com Aug. 11, 2012, Craig Anderson and Jones Lang LaSalle Capital Markets Research, July 26, 2012

*The content of these articles shall not be interpreted or construed as legal advice. These articles are not routinely updated, so if you have any questions or concerns relevant to any topic referenced herein, please contact an attorney.