Purchase Process

Ownership Through American LLC’s

Buying a property in Isla Margarita usually means obstructive legalisation that insists on revenue derived from personal property within the state to be paid in local currency, Bolivars. It also insists on personal property transactions to be carried out in  Bolivars. This has currency fluctuation and transfer cost implications. To avoid this, our international legal specialists, Powerscourt Services Ltd., have come up with an innovative tax efficient method of purchasing through an American off-shore limited liability company structure to avoid purchase, income and sale related costs. More importantly, selling the Company, rather than selling the Property itself, avoids dealing with the Venezuelan currency, since the sale occurs in a hard currency such as Euros, US Dollars or GB Pounds. Since there is no change of ownership of the legal title to the Property (the same Company continues to own it), there is no liability for Venezuelan sales and capital taxes.



Background

LLCs are a form of Company created in Wyoming in 1977 by the Limited Liability Companies Act. Subsequently many other US states have introduced similar legislation, as have many other jurisdictions elsewhere in the world.



Operating Agreement

An LLC is governed by its own Constitution, which may be called its Operating Agreement. This is a contract between the Owners or Members of the Company (i.e. those holding its shares) and is enforceable in any jurisdiction including Ireland.



Limited Liability

As with any corporate structure, an LLC provides its Owners with limited liability. This means that they are not personally liable for the Company’s debts, whether they arise from contractual obligations, claims for negligence, or any other cause.



No Corporate Taxation

An LLC pays no corporate taxes in US. Provided it is managed and controlled in a suitable offshore location, it is not liable for corporate taxes in Ireland, UK or anywhere else. Powerscourt Services LLC offers such a management service at very low cost.



Personal Taxation

You are only liable for personal taxation on the net income you personally derive from the Company, and on the eventual capital gain.



No Legal Fees

You will have no legal fees in conveying the Property. You will acquire 100% of the Shares in the Company that owns the Property.



Sale – No Legal Fees

When you wish to sell the Property, you simply sell the Shares in the Company, rather than sell the legal title to the Property. This avoids any legal costs associated with property conveyance. This is only a small administrative fee.



Sale – No Controls or Taxes

More importantly, selling the Company, rather than selling the Property itself, avoids dealing with the Venezuelan currency, since the sale occurs in a hard currency such as Euros, US Dollars or GB Pounds. Since there is no change of ownership of the legal title to the Property (the same Company continues to own it), there is no liability for Venezuelan sales and capital taxes.



Multiple Ownership

If you wish to own the Property jointly with others, you simply hold Shares in the Company in the proportion you desire. If the company is owned by multiple owners, each owner can sell their share holding separately without the property having to be sold to extract your capital from the property.



Self Management

You can decide at any time no longer to have Powerscourt Services LLC manage your Company, and instead manage it yourself.



Personal Ownership

If you wish at any time – either immediately or at any time in the future – to hold the Property in your own name, you can instruct a local lawyer to convey the Property from the Company to your name; Powerscourt can arrange this if you require. By not re-registering the Company, it dissolves automatically.