How To Rent Out Properties on Air BnB Using an IBC

A lot of people these days are making money on the side renting out properties (or rooms) via Air BnB.

Interestingly, Air BnB has given entrepreneurial types access to a whole new model of business!


Briefly what these clever business persons are doing is they are locating properties which are likely to be of interest to short terms renters eg inner city apartments in much visited European/Asian/American city locales, beachside holiday apartments, unit accommodation near hospitals etc.


Once located they contact the owners of the properties seeking the right to either (a) lease the property for a fixed term or (b) manage the renting of the property/s for a percentage of rent received.


In the case of (a) typically the lease will contain a clause allowing the entrepreneur to sublease the property.


In the case of (b) the entrepreneur typically enters into a property management agreement with the owner agreeing to manage the process of finding renters for and renting the property in return for a percentage of rent received.


Once the lease/agreement has been signed the entrepreneur lists the property/s for rent on air BnB.


Let’s look at a very practical example of how that should (tax effectively) work using a tax free International Business Company (” IBC”).


Say you contact a bunch of property owners in London and you either (a) convince them to let you rent the property/s out to others for a fee or percentage or (b) lease the properties yourself and sublease them to holiday makers.


Either way how it would work using a tax free Offshore Company (“IBC”) is:


  • The IBC would sign any contracts to manage or lease the properties in question
  • Any add online to rent the properties would be placed in the name of the IBC
  • The IBC would enter in to the agreement/contract with Air BnB
  • The client would pay Air BnB
  • Air BnB would keep their percentage and pay the balance to your IBC.
  • Any/all profits generated have been generated online
  • In the case of an online business typically tax liability lies only in the country from which the Company is managed and controlled
  • The Company would be structured with a (tax haven based) Nominee Director/Shareholder (ie management and control would be “Offshore” ie in a nil tax environment)
  • Thus  any profits earned have been earned (and ideally banked) Offshore ie in a nil tax environment


Local laws can have an impact. So be sure to seek local legal/tax/financial advice before committing to set up an Offshore Company for such purposes.


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