Do I Need an Offshore Company to Own Property Abroad?

In some countries in the world it makes far more sense to establish an offshore company and to own your foreign property assets through that corporate structure; what’s more, depending on your personal circumstances it can also sometimes make far more sense for an individual to protect themselves and their home through the use of an offshore company…however, some countries disallow foreign ownership of real estate through an offshore structure.

So, if you’re thinking of buying a home abroad or you already own foreign real estate assets you need to ask yourself ‘do I need an offshore company to own property abroad?’ and look at the options available to you.  In this article we cover the basics of the process, how an offshore company can potentially save a home owner tax and legal fees and what you need to do next to determine whether you need a company, could benefit from one or whether it is neither a sensible nor viable option for you.

The first thing you need to be aware of is that buying a home overseas is a taxable action, it can draw an increased liability for taxes such as inheritance, income and capital gains tax not to mention that such a purchase often incurs stamp duty, transfer taxes and of course legal fees.  This all means that it is sensible to research your purchase options and obligations carefully from a financial as well as legal perspective before making a commitment to buy.

Sometimes a financial or tax planner will advise that the establishment of an offshore company through which the property to be purchased will be bought is a more sensible approach from a fiscal perspective as it can mitigate or even negate financial losses.

The establishment of an offshore company is usually a very simple affair, we can put you in touch with an advisory which can not only assess whether you need a company structure but establish one for you, do all the annual paperwork and manage the entire structure for a small fee – that’s how simple it can be!  So, with the company in place the purchase or transfer contract is drawn up in the name of the company that the real estate assets are then registered as being owned by the company.

For high net worth or high profile individuals there is an added bonus of taking this approach – their name can be kept a step back from public record as to who owns a given home.

For the rest of us mere mortals the establishment and ongoing maintenance fees for an offshore structure can sometimes offset any potential taxation savings and in the case of anyone wanting to buy a property in Portugal for example, using an offshore company structure to do so can actually be punishable by increased taxes depending on the jurisdiction you favour!

So – in conclusion it’s true that using an offshore company can be a great way to own a home overseas, it can offset financial losses from taxation and fees, it can secure the asset away from litigation, it can make the entire ownership process far simpler – but it is most certainly not the best method of approach for everyone so you need to take personal advice about whether the use of a corporate structure can benefit you and your plans.