Tax haven financial or wealth evasion on a Pound shaped island.

The hidden perils of holding property assets offshore

The allure of Portugal’s picturesque landscapes, warm climate, and rich cultural heritage has long attracted expat property owners.

For many years, purchasing property through a limited company has been a popular choice because it offers advantages such as limited liability, tax efficiencies, and the ability to protect personal assets.

While offshore structures can provide certain benefits, those holding Portuguese property assets companies connected to grey-listed or blacklisted offshore jurisdictions face significant risks and challenges.

Perils of Grey-listed and Blacklisted Jurisdictions

The Financial Action Task Force (FATF), an international watchdog responsible for combating money laundering and terrorist financing, classifies countries with strategic deficiencies in their anti-money laundering (AML) and combating the financing of terrorism (CFT) measures as grey-listed or blacklisted.

The implications can be far-reaching for expat property owners with connections to grey or blacklisted jurisdictions. One such implication is increased scrutiny. Regulators, banks, and other financial institutions often cast a watchful eye over transactions involving high-risk jurisdictions. This can result in more thorough investigations, transaction delays, and additional documentation requirements.

Governments may impose higher tax rates or special reporting requirements on those connected to grey or blacklisted jurisdictions, potentially increasing the tax burden on Portuguese property assets. Non-compliance with international regulations, such as those related to key AML and CFT laws, can result in legal penalties for individuals and companies connected to high-risk jurisdictions.

Move to favourable jurisdictions

Re-domiciling companies to whitelisted jurisdictions can be an attractive option for those hoping for an easier life. Companies held in more reputable, whitelisted jurisdictions generally enjoy fewer restrictions and greater transparency and compliance, making them more appealing to investors and business partners. Domiciling your offshore company within whitelisted jurisdictions can also reduce the levels of regulatory scrutiny, resulting in smoother transactions and fewer compliance-related delays.

The Importance of Trusted Fiduciary Providers

Re-domiciling a company from a high-risk jurisdiction to a more favourable location can be complex and time-consuming as it requires extensive knowledge of international laws, regulations, and best practices. Seeking the guidance of a trusted fiduciary provider with expertise in re-domiciliation can help navigate this intricate process, ensuring compliance with all applicable regulations and a smooth transition to the new jurisdiction.

The Gibro Group specialises in the re-domiciliation of non-resident company structures and moves them to white listed jurisdictions.

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