There are a few options when considering the correct corporate structure for acquiring and developing private islands, and these depend on a few factors, such as the type of investment (island, land area only, multiple islands) and the overall size (large multi resort operation, single resort operation, small eco resort).  It is important too, to plan your acquisition corporate structure with your end in mind.

Some strategies will require different corporate structures to ensure the future costs are minimised, partial sales are possible and also ensure a favourable taxation outcome through the development, operation and sale cycle.  There is nothing overly complicated in any corporate structure, but it is strongly advised to hire subject matter experts to ensure your strategy can be executed successfully, efficiently and at the lowest overall cost.

Some key considerations in your decision on corporate structure should be.

• Loans to establish a resort can be a tax deduction, even if they are inter or intra company loans
• Operating income does not necessarily need to be received in the country of resort operation
• Collective land ownership by a company with several shareholders means on selling land can be a “share sale” not a “land sale”, significantly reducing transaction costs and exit costs
• International structures in tax free domiciles provide very favourable corporate structures for resort operations
• Establishment of socially responsible initiatives such as conservation trusts, education trusts and similar can provide significant taxation benefits when established as part of a development
• Segregating a private island development into a land holding company, a resort operating company and a non profit company for social investment provides a large amount of discretion and flexibility in both operating income and treatment of future capital gains (from sale or subdivision for example).

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.  For more information, existing clients are welcome to contact us at sales@kepriestates.com for more information.