We are often asked by clients How can I buy a piece of real estate in the city where I live using my Offshore Company?
There are several options here:
- You could limit your purchase to a new property which in most cases would get around any Foreign Investor Approval issues. In that case you could either:
(a) Use your existing Company to buy the property; or
(b) Use your Foundation or Trust to buy the property; or
(c) Have the Foundation/trust or your existing Offshore Company fund/incorporate a stand- alone Real Estate Investment Company and have that Company buy the property. This would be the most discreet way to do it especially if you are regularly receiving payments from (ie if you have a visible relationship with) an existing tax free Offshore Company
- If you’re buying an existing local property (eg a dwelling) which would require Foreign Investor Approval/Sanction you could form a local Limited Company and have any of the above 3 suggest Offshore Entities supply the funding for the property as Mortgagee (for this to work the local Company would need to enter into a loan agreement with at least interest only payments and sign a mortgage on commercial terms).
As regards the process once you’ve decided which entity to use as Consultant/Adviser to the Offshore entity:
- You would make certain recommendations in writing to the Director/Trustee/Councillor (ie to purchase XYZ Property)
- The entity would then call a Board meeting authorizing the entity to proceed with the transaction
- If you need to close the sale quickly the Board could provide you or your local Lawyer with a Power of Attorney enabling you to sign the Purchase/Sale Contract
If you want to live in the property the smart thing to do would be to have the Offshore Company which owns the property hire a local property management business; They would advertise the property. You would apply to lease the property and then pay rent to the Property Managers in an arms’ length arrangement, which shouldn’t raise any suspicions. (Contrast that with iIf you are sitting rent free in a property owned by a tax free Offshore Company; for sure and certain you can expect that to raise a red flag, eventually, with the authorities).
Would you like to know more? Then please Contact Us: