It is an old saying that money knows no borders, but that’s true only to a certain degree. Making an investment overseas is certainly possible and in many cases profitable. However, buying properties in a foreign country is no walk in the park and it takes a lot of time and energy to ensure full compliance with local regulations.
Before you can invest strategically, it’s necessary to grasp the challenge ahead and identify areas where things could go sideways. Only with a full awareness of the potential bottlenecks and a good plan how to avoid them it becomes a good idea to sink your money into an asset located in a different jurisdiction.
Why Overseas Property Investment Is Such A Labyrinth?
Every country likes doing things its own way, and nothing is stopping them. Property laws may be similar across most of the developed world, which can seem enticing at first. Once you get down to the practical level, things become much more fragmented. Some countries have restrictions on who is allowed to own property, others require proof of origin for the funds, and a few insist on having a local intermediary. It’s fair to describe this network of regulations a maze, because it’s so easy to get lost in it and make a costly mistake.
When Does It Make Sense to Set Up a Foreign Company?
Depending on the size of your planned investment, in some cases it might be expedient to register a company in the target country and put it in the role of titular property owner. This could be a sleek way to bypass some limitations on foreign ownership and potentially receive a sizable tax break. But there is also a case to be made against it, since starting and maintaining a legal entity in an offshore destination comes with its own set of legal complexities. That’s why going this route is only worth the trouble for commercial-level operations.
How Do You Ensure All Documents Are In Order?
Regardless of what how you go about structuring your foreign assets, you will have to back up your applications with valid documents. That sounds simple until you realise that all documents need to be translated and verified by UK apostille stamps. That’s why it’s mandatory to find out exactly which documents you will need much before you start considering an actual purchase. You don’t want to miss out on a good offer because of incomplete paperwork.
Taking Care of Tax Obligations in Time
Another big thing to figure out before you spend your money is how much it will cost you in taxes. The answer depends on where you are acquiring assets and how are they connected to your UK-based businesses. Since you might be on the hook for different kinds of taxes, it is probably wise to calculate your dues with assistance from an accountant or attorney. The last thing you want is to get in trouble with a foreign tax authority simply because you were confused about your obligations or the deadlines to settle them.
