Portugal Property Ownership
The following may help to clarify why many owners of property in the Algarve continue to purchase their property through a corporate structure. The property itself is an asset of the company and buyers purchase the shares of the company. This takes place in the jurisdiction where the company is domiciled and there are benefits in buying and owning property in this manner.
The usual searches on the property must be carried out, and most local lawyers are familiar with this type of corporate transaction. A Share Purchase Agreement is drawn up, the deposit paid and a completion date set in the usual manner. The immediate benefits of such a transaction are its simplicity and the documentation is in English.
Since only shares were sold, the company remained the owner of the property and the buyers became the new shareholders, thus saving significantly on tax. This became an accepted practice in the Algarve.
In 2003, those Offshore Centres outside of Portugal were classified by the OECD into ‘Black List’ and ‘White List’ jurisdictions. Black List jurisdictions were usually those offering beneficial tax regimes out of line with White List countries, the intention being to encourage them to fall into line with White List jurisdictions.
Many property-owning companies wished to continue their ownership, but not in black-listed jurisdictions, and remained of the opinion that the benefits of corporate ownership outweighed the disadvantages.
White-listed jurisdications, offering the possibility for companies to migrate to, were Malta and Delaware. Malta, being a full member of the EU, attracted many companies to re-domicile there. Many companies also transferred to Delaware.
Currently, buyers and sellers are confident owning their properties in white-listed jurisdictions. It is normal to see Algarvean properties described as owned in Malta or Delaware and completely acceptable for them to continue to be owned by such companies. The majority of ownership in and around Quinta do Lago, the premier international golfing area, continues in this manner, with its real advantages.
You should consider this carefully when you find that the property which interests you is owned by a company based in those countries.