Corporate Structures to Buy Islands

Acquiring a private island involves more than just purchasing land. The right corporate structure depends on factors such as your investment type (single island, multiple islands, or land-only) and the overall scope (large multi-resort, single-resort, or small eco-resort). Always begin with the end in mind so you can streamline costs, enable partial sales, and achieve favorable tax outcomes.

Choosing the Right Corporate Structure

Different corporate structures help minimize future costs, allow partial sales, and ensure strategic tax advantages. Though these structures are not overly complicated, experts recommend hiring legal and financial specialists. Their guidance can help you execute your strategy successfully, efficiently, and at the lowest overall cost.

Key Considerations

1. 1. Resort Financing
      Loans for establishing a resort may be tax deductible, even if they are intercompany or intracompany loans.
   2. Location of Income
      Resort income does not always need to be received in the host country. You can choose a jurisdiction that aligns with your broader financial strategy.
   3. Collective Land Ownership
      Holding land through a company with multiple shareholders can turn a land sale into a share sale. This approach often lowers transaction and exit costs.
   4. International Structures
      Setting up operations in tax-free or low-tax jurisdictions can provide highly favorable corporate structures for resort development and ongoing management.
   5. Social Responsibility Initiatives
      Creating conservation or education trusts as part of your development can offer significant tax benefits. These initiatives also enhance your resort’s social impact.
   6. Strategic Segregation
      You can form separate entities for land holding, resort operations, and nonprofit social investments. This setup provides discretion and flexibility in managing operating income and handling future capital gains (such as from a sale or subdivision).

Importantly, the above information does not constitute taxation, legal or financial advice and Kepri Estates strongly advises you seek subject matter expert guidance from suitably qualified and experienced professionals in establishing your corporate structure.  Kepri Estates, at no cost to it’s clients, will facilitate engagement of experts for investors to ensure they have the most favourable structures to execute their investment strategy.  Existing clients are welcome to contact us at sales@kepriestates.com for more information on the corporate structures to buy islands, and if you are starting your research, please check out Kepri Estates Private Islands Due Diligence Guide (part 1).