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  • Home
  • Countries

    Top Destinations:

    Whether you’re looking for fun and sun, a peaceful retirement, or the chance to earn some extra income, you’ve got a real world of opportunity open to you… In short, we’ve done our best to narrow down your best options, but only you can decide the right country for you.

    • Spain
    • Portugal
    • Panama
    • Belize
    • Colombia
    • Cyprus
    • Mexico
    • France
    • Montenegro
    • Browse All Countries

    Best For:

    • The Best Places To Retire
    • Health Care Abroad
    • Cost Of Living
    • Investing in Real Estate
    • Establishing Residency
    • Gun Laws In The World
    • English-Speaking Countries
    • Safest Places For Retirement
    • Best Places In Latin America
  • Budgets

    How Much Will It Cost You To Live Overseas?

    The only honest answer is, we have no idea. And neither does anyone else. The only one who can answer that question is you. Here’s the most important thing to understand about budgeting your new life overseas…

    Super Cheap

    • Chitré, Panama
    • Santa Marta, Colombia
    • Phuket, Thailand
    • Dumaguete, The Philippines

    Cheap

    • Medellin, Colombia
    • Boquete, Panama
    • Kyrenia, Cyprus
    • Hua Hin, Thailand
    • The Algarve, Portugal

    Affordable

    • Valencia, Spain
    • Cascais, Portugal
    • Las Terrenas, The DR
    • Pisa, Italy
    • La Rochelle, France
    • Mazatlán, Mexico

    Luxury

    • Ambergris Caye, Belize
    • Kotor, Montenegro
    • The Panama City Beaches
    • Paris, France
  • Resources

    Global Living

    • Living & Retiring Overseas
    • Raising A Family Abroad
    • Foreign Residency & Citizenship
    • Offshore & Diversification

    Making Money

    • International Real Estate
    • Banking
    • Employment
    • Investing

    Follow Us:

    • Meet Our Experts
  • Real Estate

    Buying Real Estate For Cashflow

    • Discover tips and strategies used by global property investing veterans

    Explore Our Latest Posts

    • Learn how to invest and purchase property abroad…

    Go To The Overseas Property Alert Site

    • How To Become Independently Wealthy And Fund The Lifestyle Of Your Dreams
  • Conferences

    Upcoming Events

    • Explore Our Events Site

    Live and Invest In Spain Conference

    Offshore Wealth Summit

    Greece Workshop

    VALENCIA, SPAIN

    Sep. 17-19, 2025

    PANAMA CITY, PANAMA

    Oct. 15-17, 2025

    VIRTUAL

    Nov. 13, 2025

    LEARN MORE
    DISCOUNT
    LEARN MORE
    PRE-REGISTER
    LEARN MORE
    PRE-REGISTER
    • MORE EVENTS

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    Toll-Free U.S. and Canada:
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    From Outside North America:
    1 (443) 599 1221
    Working Hours
    Monday – Friday 08:00 am – 17:00 pm EST.

    Reach us with your questions by email at: events@liveandinvestoverseas.com

  • Store

    Unlock The World

    • Access Your Library

    Overseas Havens Reports

    • Expats' comprehensive destination guides

    Conference Kits

    • Hours of coverage  from our latests conferences

    Lahardan Books

    • Titles on living and investing around the world
    • Explore Our Store
    Your passport to a life well-lived abroad

    Services

    overseas living letter offers affordable retirement guidance
    The Simon Letter Wealth Protection Insights
    Global Property Advisor Global Investment Opportunities

    Our Customer Service team is here to assist with any questions or concerns CustomerService@LiveandInvestOverseas.com

  • My Library
Live and Invest Overseas
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Home Investing

Things To Consider When Investing In Properties Overseas

When Buying Property Overseas, You Want To Get This Right From The Start

by Kathleen Peddicord
Sep 18, 2022
in Investing, Real Estate, Taxes
0 0
Old Town architecture of Lucerne, Switzerland

Adobe Stock/Scanrail

If you purchase a piece of real estate in another country, should you have the ownership documents issued in your name or, perhaps, in the name of a corporation?

If a corporation, should it be a local company (formed in the jurisdiction where you’re purchasing) or one based somewhere else?

I get these questions from readers every day.

To answer them, you should consider these two things:

Taxes and your estate.

-Taxes

You need to understand the tax obligations both in the country where you’re buying and, if you’re an American, also in the United States.

Likewise, implications for your estate should be considered both locally and back home.

Let’s take Panama as an example. The typical way to hold real estate in this country is through a Panamanian corporation. This provides a positive tax effect in Panama whenever you resell, because you’re not, in fact, selling the piece of property but the company that owns it. This minimizes the capital gains tax.

On the other hand, owning a piece of property in a Panamanian corporation can create a negative U.S. tax effect for an American. Specifically, this can result in the gains being taxed at income rather than capital gains rates. You have to weigh the potential liabilities.

-Your Estate

Regarding the estate issue, you need to make sure you understand both inheritance laws and estate taxes in the country where you’re buying.

Here, let’s take France as an example. The inheritance laws in this country may surprise you and certainly can result in your property ending up somewhere other than where you’d like it to go following your death unless you have a will that the French will recognize.

Particular issues arise if you are in a second marriage, for example, or have stepchildren to whom you’d like to leave some ownership of some French asset. Die without a will valid in France, and this is not what will happen. The default French inheritance distribution follows blood. Without proper planning, your assets could end up going to your uncle (or some other random relative) rather than to the people you’d like to have them.

However, you can avoid French probate altogether if you hold your French real estate asset not in your name but in the name of an SCI, which is a French company formed specifically for the purpose of holding property.

You see, therefore, the importance of thinking through ownership structures before making any investment in foreign real estate.

Specifically, what are your options?

The first would be to hold the piece of property in your own name. This is the most simple and straightforward strategy and can make sense if you plan to hold the property for only a short period of time.

However, generally speaking, this is probably not the best way to hold property in any country. First, it’s typically not the best option in the context of the local inheritance laws (as I explained in my France example).

In addition, though, you want to remember probate. If you hold a piece of property in another country in your name, your heirs will have to go through probate in that country. If you hold property in your name in three other countries, your heirs will have to go through probate in all three. Having to go through probate in a foreign country to claim assets you’ve left them could change the way your heirs remember you. (You’ll be dead, of course, so maybe you don”t care.)

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That said, there are cases when holding property in your personal name has benefits that override the probate concern. For example, in Argentina and Croatia, if you hold real estate in your personal name (as opposed to in that of a corporation), then you are not liable for capital gains tax when you resell.

The next option for holding real estate is an entity formed within the country where the property is located. As I mentioned, most buyers in Panama (including Panamanians) take title to their real estate in the name of a Panamanian corporation. This saves you the 2% real estate transfer tax when you resell the property (as long as you hold each property in a separate corporation) and can help to minimize capital gains taxes. Capital gains in Panama are currently taxed at 10%. However, when you sell your shares of the corporation that owns the real estate, you incur only a 5% withholding on the gross transaction value.

Assuming your property has more than doubled in value since you bought it, you can simply opt not to file a tax return on the resale transaction, thereby effectively paying less than 10% on the gain. If the property value hasn’t more than doubled, then you file a tax return to request a refund for the difference between the withholding and the actual tax due.

Note that shares of a corporation in a country, while not real estate, are still an asset in that country, meaning there still can be a probate risk. To avoid that, you could create a “parent” company or trust to own the local corporation.

That parent company or trust could be in your home country; however, it’s probably better from the point of view of asset protection and privacy to use a third jurisdiction for this.

On the other hand, this can be more structuring than you want or need, and layering structures like this can get complicated. Don’t attempt it on your own. Seek legal advice both in the country where the property is located and in your home country, especially if you’re an American.

The final option for how to hold a piece of property you buy in a foreign country is through a third-country entity. For example, you could take title to your beach house in the Dominican Republic using a Belizean IBC. Again, though, this can be a more complicated structure than you want or need.

In addition, many countries will require you to register the foreign entity locally for tax purposes. This can be difficult in situations where the country doesn’t recognize the type of entity. I struggled with my purchase in Medellín, Colombia, for example, where I wanted to take title in the name of an LLC. This proved an uncommon approach in this jurisdiction.

In addition, setting up these kinds of entities comes at a cost. The setup for a Panamanian corporation costs about US$1,200 (depending on the attorney). A Nevis LLC costs about the same. Then there are the annual carrying costs of about US$500 or more for most foreign entities. These costs have to be weighed against the benefits of asset protection, avoiding probate, and minimizing the need for a will in the countries where you want to purchase.

If you are buying only a single piece of real estate in a single country, then the holding structure can and should be simple, maybe just one local entity.

The important thing is to understand the tax and estate implications in the country where you’re planning to buy and, as well, in your home country before you make a purchase. Changing directions midstream can be expensive.

You don’t want, for example, to have to re-title a piece of real estate in a foreign country (from your own name to that of a corporation, say). In most cases, this would mean paying the transfer tax again (even if you’re transferring the asset from your individual name to that of an entity you own 100%), and the transfer tax can range from 1% to 12% of the property value at the time of the transfer.

You want to get the titling right from the start.

Sincerely,
Kathleen Peddicord signature
Kathleen Peddicord
Founding Publisher, Overseas Opportunity Letter

Tags: 'overseas property investment'buy real estate abroadestate planningproperty purchasetaxes overseas
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Kathleen Peddicord

Kathleen Peddicord

Kathleen Peddicord has reported on opportunities for Americans to live, retire, and do business overseas for 40 years. She has traveled to more than 75 countries, invested in real estate in 24, established businesses in 7, renovated and built properties in 6, and educated her children in 5.

Kathleen has moved children, staff, enterprises, household goods, and pets from the east coast of the United States to Waterford, Ireland, then to Paris, France, and finally to Panama City, Panama, where she has based her Live And Invest Overseas business. Peddicord and her husband, Lief Simon, now divide their time between Panama and Paris.

Peddicord was a partner with Agora Publishing’s International Living group for 23 years. She opened, staffed, and operated International Living publishing and real estate marketing offices in Waterford, Ireland; Panama City, Panama; Granada, Nicaragua; Roatan, Honduras; San Miguel de Allende, Mexico; Quito, Ecuador; and Paris, France. Peddicord launched Live And Invest Overseas group in 2008 and has built it into a successful multimillion-dollar business. Today, she shares her firsthand experience of expat life with more than 500,000 readers of her publications, including Overseas Opportunity Letter and Overseas Living Letter.

Kathleen has been featured often in The New York Times, MSNBC, AARP, CNN, Bloomberg, CNBC, and more and writes monthly about expat matters, international real estate, and offshore diversification for Forbes and U.S. News.

Kathleen has written several books including the memoirs “At Home In Ireland” and “At Home At Los Islotes” and her latest title “At Home Abroad,” all published by Lahardan Books. Her best-selling "How To Retire Overseas: Everything You Need To Know To Live Well (For Less) Abroad” was published by Penguin Random House in 2018 and her “Buying Real Estate Overseas For Cash Flow (And A Better Life)” was published by Wiley in August 2020.

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