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The legislation of the majority of countries in the world provides equal conditions for both physical and legal persons in their capacity as owners of real estate, located in the relevant country.
A physical person intending to buy a piece of real estate should consider the option of buying the said property not in his or her own name, but in the name of a non-resident company in his or her ownership. Where the physical person is already the owner of such property, he or she should consider the option of re-registering the real estate in the name of the non-resident company.
Some of the advantages that may be gained by an individual owning real estate that is not registered in his or her name, but in the name of his or her non-resident company, are set out below:
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| 1) | Protection of confidentiality. Generally speaking, an individual owner of real estate is automatically considered to be wealthy, and this attracts the attention not only of governmental institutions, but also of other organizations, including marketing, advertising and even sometimes 'informal (criminal) structures'. If the real estate is registered in the name of a foreign company, it will be more difficult for non-authorized persons to detect the identity of the physical person behind the name. As a result, they will be forced to turn their attention to other owners of real estate, who do not make use of this opportunity. |
| 2) | Simplified purchase procedure. It goes without saying that a physical person, who pays a certain amount of money for real estate, must be prepared to provide information about the source of his or her income, and if necessary, prove that the appropriate tax has been paid on that income. On the other hand, if a foreign company buys real estate, it is already acting in accordance with the legislation of its country of incorporation, where, as it is known, the taxation of capital is usually 0%. |
| 3) | Protection of investments. The majority of countries, including those that are hardly leaders in the sphere of democracy and the principle of non-violation of private property rights, have concluded agreements with Western countries on investment protection. Therefore, in the future, the entrepreneur who buys real estate in the name of his or her Western company, will not be left to battle with the governmental machine of his or her country of residence on his or her own, but will instead be protected by the bilateral investment protection agreement referred to above. |
| 4) | Inheritance issues. Usually the heirs inherit real estate from a physical person after lengthy court proceedings and settling their liability to inheritance taxes. However, when a non-resident company has been used to own the real estate, the heirs simply inherit shares of the non-resident company with all the real estate belonging to that company, so that formally the owner of the real estate has not changed. |
| 5) | Lease rentals. If the owner of real estate is a non-resident company, the leaseholders, including the ultimate owner of the real estate, can regularly pay rent to the non-resident company for their use of the property, thus distributing their assets in the most efficient way. |
| 6) | Further on-sales of the real estate. If the real estate is registered in the name of the foreign company, and not in that of a physical person, the procedure for on-sales of the property is simplified. Instead of paying property sales tax, the shares of the company are transferred with all the real estate that it owns. |
| 7) | Registering real estate abroad. When buying real estate abroad, the potential owner should be aware that information exchange between countries on ownership of real estate is, nowadays, an efficient procedure. At the request of one country, the other can supply information about all persons resident in the first country and owning real estate in the other. If, on the contrary, the owner of the real estate in the second country is a neutral non-resident company, the relevant real estate will no longer have any connection to the country of residence of its owner. |
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