in Portugal

Buying Offshore Corporate Property in Portugal

There are considerable advantages to buying a property in Portugal through an offshore company, especially for non-residents. Buying a property through companies of this nature has long been a common practice in Portugal. It is a legal and sophisticated method of acquiring and owning a property without having to pay the higher property transfer taxes and fees that are the "norm" in southern Europe, and not just in Portugal. The property becomes an asset of the company, where the buyers (share holders) acquire shares in the company. This operation takes place under the jurisdiction of the area in which the company is based.

In 2003, the Portuguese government decided to put pressure on THOC's (Tax Heaven Off Shore Companies) and places like Gibraltar, the Channel Islands, the Bahamas and many others were blacklisted. A debate ensued and some people switched from off shore to on shore companies. Others moved their companies from the "blacklisted" areas to the areas that were left out, such as Malta and Delawere. However, it was difficult to know which was the best solution due to the costs involved. The share holders thus chose according to their fiscal position. The property market, as it always does, adapted to the situation and demands of the markets.

In simple terms, a Shared Purchase Agreement is drawn up with the deposit paid, as usual, and a date for finalising the process is agreed. The immediate benefits of a transaction of this type are its simplicity and the fact that all the documentation is written in English, with no liability to pay IMT or IS, and no need to travel to the location.

Recommendations

When buying a property through a corporate structure, we recommend that you appoint a local lawyer, as the lawyer will not only check the position of the company, but will also ensure that the property is properly licensed, built according to the plans approved by the local authority and that the title of both is clean and free of any debts.
We will be happy to suggest one of the many local lawyers we usually work with who are familiar with this type of operation and its legal requirements.

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* Please note that the laws on owning a Portuguese property through offshore companies are constantly changing and that in the future, all benefits may be cancelled or reduced. VAP Real Estate will not be held responsible for any such changes.