Buying propertythrough a company

Ownership map

5 base architectures compared

Before moving to the legal and tax analysis, let us establish how property rights, control bodies, cash flows and asset disposal work under the different ownership models.

Who it is for

Client categories and the scale of the task

The ownership architecture is selected based on the nature of the assets, the personal tax status and the investment objectives. No single scheme fits both the purchase of a single apartment and an international portfolio of commercial buildings.

• Private investors: Acquisition of premium residences, villas and apartments. The task is correct titling of the right of use, limiting public visibility of personal data in registers where the law allows it, and streamlining succession formalities.
• Business owners: Integrating real estate into family offices, trusts or holdings. The task is consolidated management and separation of operating and investment risks.
• Commercial real estate investors: Purchase of retail space, office centres and warehouse complexes. The task is administering rental income taxation, depreciation allowances and bank financing.
• Co-investors and syndicates: Buying assets in partnership. The task is the legal allocation of shares, voting rights, further funding obligations and exit terms through a shareholders agreement (SHA).
• Developers: Launching construction projects where each phase is ring-fenced in its own SPV to separate financial and construction obligations.

SPV

SPV (Special Purpose Vehicle): a dedicated single-asset company

An SPV (Special Purpose Vehicle) is a legal entity created for one specific purpose: holding a particular property or delivering a single development project.

Why it may be needed

• Risk ring-fencing: Claims from tenants, utility providers or contractors attach to the assets of that particular SPV without touching other group companies or the owner’s personal wealth.
• Accounting transparency: The SPV’s balance sheet reflects the income and expenses of that specific asset.
• Raising finance: It is easier for banks to assess risk and lend against a company with no unrelated operating history.

Risks and limitations

Ring-fencing through an SPV is not absolute. There are legal mechanisms through which liability can reach beyond the SPV:

• Personal / parent guarantees: Banks often require the owner or the parent company to guarantee the SPV’s obligations.
• Cross-collateralisation and cross-default: Loan covenants may link a default of one SPV to the obligations of other group structures.
• Veil piercing and directors’ liability: Where deliberate insolvency, commingling of personal and corporate funds or unlawful acts of directors are established, a court may hold the controlling persons liable.

What it means for the property owner

An SPV separates a specific asset from other business and group assets. The degree of separation, however, depends on the financing structure, guarantees given, applicable law and the actual quality of corporate governance.

Applied scenarios

Applied scenarios for using companies

Rental business and investment holding

When the property is let, the company acquires the status of an operating business.

• Expense accounting: Gross rental income is reduced by documented expenses connected with running the asset: maintenance, repairs, insurance, brokerage fees, legal services, interest on dedicated loans.
• Depreciation allowances: Whether the building (excluding land value) can be depreciated depends on the tax accounting rules of the specific country. Depreciation reduces current taxable profit but lowers the book value of the asset, which may increase capital gains tax on a later direct sale.

Partner co-investment and the Shareholders’ Agreement (SHA)

When several partners buy an asset together, direct titling to individuals creates a decision deadlock risk. Buying through an SPV allows the partners’ rights to be regulated in detail through a Shareholders’ Agreement (SHA).

The SHA fixes the following mechanisms:

• Capital Calls: The procedure for further funding of the project and the consequences of a partner’s failure to contribute.
• Reserved Matters: The list of decisions requiring a qualified majority or 100% of votes (sale of the asset, pledge, raising loans).
• Deadlock Provisions: Resolution of corporate deadlocks (Dutch Auction, Texas Shootout).
• Exit Clauses: Drag-Along (the right to force the minority to sell together with the majority) and Tag-Along (the minority’s right to join the sale on the same terms).

Raising bank financing

In commercial real estate financing banks assess the debt service coverage ratio (DSCR) and the loan-to-value ratio (LTV).

Depending on the deal structure, a standard security package may include:

• A mortgage over the property
• A pledge of the SPV’s shares
• Assignment of leases / rents
• A pledge of the SPV’s bank accounts
• Corporate or personal guarantees (Sponsor Support / Personal Guarantees)

Sequence of steps

Why the structure must be designed before any payments are made

A common mistake is buying the asset in a personal name intending to "transfer it to my company later".

A subsequent transfer of the asset from the individual to a company is treated by tax authorities as a separate sale and purchase at market value. It triggers:

• A second payment of transfer tax / stamp duty
• Capital gains tax for the individual if the market value of the asset has grown
• Notarial and registration fees
• A repeat AML/KYC review and the lender bank’s consent

The optimal moment to fix the ownership structure is before an unconditional obligation to buy arises and before any payments that may affect the tax qualification of the deal.

Family foundation

Private and family foundations

A private foundation is a self-standing legal entity with its own legal personality but without shareholders or members. It is created to manage assets in the interests of designated persons (the family).

The instrument is codified and used in Liechtenstein, Panama and the UAE (DIFC / ADGM Foundations).

• Why it may be needed: To unite the family’s assets (real estate, business, investment portfolios) under a single management with a transparent succession mechanism, without resorting to common law trust constructs.
• Risks and limitations: The foundation is governed by its Council strictly under the Charter and the Regulations. Excessive control by the Founder may lead to the structure being challenged by the tax authorities of the founder’s home country under CFC rules.
• What it means for the property owner: A family foundation combines the corporate form with trust-like functions. It ensures continuity of property ownership but requires regular spending on the Foundation Council and reporting compliance.

Collective projects

Investment funds for collective projects

For large development projects or commercial portfolios funded by third-party investors, ordinary SPVs are not enough. Fund vehicles are used instead:

• Regulated and semi-regulated investment funds: For example, the RAIF (Reserved Alternative Investment Fund) in Luxembourg, the PIF (Private Investor Fund) in Cyprus or dedicated fund forms in the UAE (ADGM/DIFC).
• Infrastructure participants: Depending on the jurisdiction and investor category, a fund may require a licensed manager (AIFM), a custodian / depositary bank, an independent administrator and an auditor.

The fund form provides transparent accounting of investor interests and a defined procedure for issuing and redeeming shares or units, but carries significant regulatory and operating costs.

Family Office

Family Office: consolidated portfolio management

For families with substantial international capital, real estate forms part of a single investment ecosystem managed by a family office.

The family office provides consolidated reporting, account administration, bank compliance and preparation of the structure for generational change.

Three legal systems

The three-jurisdiction rule: the tax analysis triangle

In international structuring BRIDGES GLOBAL analyses three legal systems simultaneously.

• Law of the property country: Local property taxes, registration rules, restrictions on non-residents, taxation of property disposals.
• Law of the company country (SPV / HoldCo): Corporate tax rates, withholding tax, substance requirements and corporate reporting.
• Law of the UBO’s country of residence: CFC rules, automatic exchange of information (CRS), reporting of foreign assets and taxation of dividends.

Funding

SPV funding mechanisms

Ways of moving funds from the beneficiary into the registered SPV.

• Equity contribution: A direct increase of share capital or a contribution to the company’s assets without issuing new shares.
• Shareholder loan: Repayment of the principal is not subject to withholding tax, but the interest rate must be at arm’s length and the debt-to-equity ratio must satisfy thin capitalisation rules.
• Bank debt: Mortgage or corporate lending secured on the asset.

Asset protection

Asset Protection

Legal capital protection (Asset Protection) is neither concealment of assets nor a way to escape existing obligations. It is pre-emptive structuring of ownership before disputes or risks arise.

• Risk segregation (Ring-fencing): Separating the operating business and the investment real estate into different legal entities.
• Corporate governance: International legal institutions protect assets from unfounded third-party claims, provided insolvency laws are respected and there are no signs of sham transactions.

Verification

Property Due Diligence: auditing the asset

Before an asset is bought through a company, a legal and technical review (Property DD) is carried out.

• Legal status: Title, encumbrances, third-party rights, litigation over the asset.
• Planning audit: Permits, designated use, compliance of the built structure with documentation.
• Financial and tax audit: Property taxes, utility and service obligations, lease agreements.
• Technical audit: Condition of structures and utilities, hidden defects.

Corporate Due Diligence: auditing the company in a Share Deal

Where a ready-made SPV holding the asset is acquired, Corporate Due Diligence procedures are performed:

• Review of the corporate structure, constitutional documents and absence of litigation
• Tax audit of timely filing and payment for past periods
• Verification of the absence of off-balance liabilities, pledges and guarantees given
• Warranties and indemnities and loss recovery mechanisms fixed in the share purchase agreement (SPA)

Choosing a jurisdiction

Parameters to analyse when choosing a jurisdiction

Parameters to verify before selecting a jurisdiction.

• Consistency of the structure with the land and corporate law of the property country
• Availability and conditions of double tax treaties (DTTs)
• Substance requirements
• Banks’ readiness to service the chosen corporate form
• Proportionality of administration costs to the asset’s expected yield

Asset types

A structure for each property type

Accounts

The SPV’s bank account and payment infrastructure

Opening accounts for asset holding entities requires proof of the origin of capital and a detailed description of the economic substance of the structure. BRIDGES GLOBAL works with international banks and licensed financial institutions in the EU, the UAE and Switzerland.

Ownership over time

Calculation algorithm

A comparative model of ownership options

This model is a simulation demonstrating the calculation algorithm. Final figures are computed for the specific transaction.

Simulation parameters: a commercial asset worth €5,000,000. Planned rental income of €350,000 per year. Holding period of 5 years.

A structure is assessed not by a single tax rate but by the total cost of ownership over a 5-10 year horizon.

How we work

Step-by-step engagement with BRIDGES GLOBAL

• Initial briefing and NDA: Confidential analysis of the objectives and asset parameters.
• Legal and tax memorandum: Structuring scenarios with cost calculations and graphic schemes.
• Setting up the structure: Incorporation of entities, trust documentation, opening bank accounts.
• Transaction support: Overseeing settlements, passing compliance and registering the rights.

Timeline

Indicative timeline for creating the structure

• Architecture design and memorandum: 5-10 business days
• SPV / holding incorporation: 5-15 business days
• Private foundation / trust formation: 10-20 business days
• Account opening and compliance: 15-30 business days

Average turnkey preparation time — 3 to 6 weeks.

FAQ

Frequently asked questions