For each Canadian syndicate deal, investors become partners in a special-purpose vehicle structured as a US series limited partnership. Each Canadian syndicate will typically send out IRS Forms K-1 and CRA Form T5013 to all its partners, both Canadian and non-Canadian, in any year in which it has taxable income or deductible expenses.
We understand from informal consultation with tax counsel that, generally, income and distributions from AngelList syndicated deals to Canadian or other non-US investors without substantial US business involvement are exempt from US tax and withholding requirements, provided that such investors have submitted the appropriate FATCA Related Forms.
Please note, AngelList is not qualified to provide tax advice and the above should not be read as tax advice. There are many important exceptions to the generalization stated above, so please be sure to consult your tax advisor and relevant international tax treaties before making an investment.
What are the risks of these investments?
All startup investment is risky. These risks include, but are not limited to, the following:
- There is a chance of complete loss of invested capital.
- Startup investments are illiquid and there is no guarantee of liquidity in the future.
- There is a risk of dilution of any individual’s investment as the portfolio company might go on to raise additional funds.
- Interested investors must conduct their own due diligence on any investment opportunity. AngelList does not conduct any due diligence on any startup.
Nothing in these materials shall constitute a recommendation or advice of any type by AngelList.