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Legal | Ownership of Real Estate in Europe

In Europe, foreign ownership laws vary by country, but in general, the continent is quite open to foreign investors, whether it comes to owning real estate, starting businesses, or making financial investments. Here’s an overview of the key rules and regulations regarding foreign ownership in Europe:

1. Foreign Ownership of Real Estate in Europe

In Europe, property ownership rules for foreigners differ by country, with some countries having more liberal policies, while others impose restrictions.

Countries with Relatively Liberal Foreign Ownership Laws

United Kingdom: Foreign nationals can freely buy property in the UK, including residential, commercial, and industrial properties. However, the introduction of taxes like the Stamp Duty and the Non-UK Resident Capital Gains Tax has made it more expensive for foreign buyers. Additionally, recent regulations have required foreign investors to disclose beneficial ownership of properties in certain circumstances to prevent money laundering.
France: Foreigners are allowed to buy property in France, whether they are residents or non-residents. There are no restrictions on foreign ownership of real estate, though non-EU citizens might face higher taxes on property purchases. Additionally, the process of buying property in France can be more complex for foreigners, as they need to follow specific legal procedures through notaries.
Spain: Foreigners can own property in Spain without restrictions, though there are additional requirements for non-EU citizens, such as applying for a NIE (Número de Identificación de Extranjero) and complying with tax rules. In regions like the Canary Islands and Balearic Islands, foreign ownership is quite common, especially among wealthy buyers.
Portugal: Portugal also allows foreign nationals to purchase property without restriction. The country has attracted many foreign buyers, particularly through the Golden Visa program, which grants residency to foreign investors who purchase property valued over a certain amount (currently €500,000 or more).
Germany: Foreigners can buy property in Germany without restrictions. However, property purchases may require the buyer to prove their financial stability. Additionally, the property tax regime in Germany is relatively high, and buyers should factor in maintenance costs, real estate taxes, and other fees when considering a purchase.

Countries with Restrictions on Foreign Ownership

Switzerland: While Switzerland has a reputation for being relatively open to foreigners, there are significant restrictions on property ownership. Foreigners are only allowed to buy property if they have a residence permit, and even then, the purchase must be in certain designated areas. Additionally, foreigners are restricted to buying second homes in certain regions, and there are strict regulations on the sale and rental of these properties.
Austria: In Austria, foreign nationals may face restrictions on property ownership, particularly in rural areas. Ownership is allowed, but there are requirements for non-EU nationals to demonstrate a connection to the country (such as having a business or residency status). In general, ownership of agricultural land is restricted.
Denmark: Foreigners are restricted from buying property in Denmark unless they can prove that they have lived in the country for at least 5 years. Non-EU citizens also face stricter restrictions, particularly in rural and agricultural areas.

General Considerations for Foreign Property Buyers

Taxation: Foreigners purchasing property in Europe must be aware of property taxes, capital gains taxes (when selling the property), and inheritance taxes (which can be high in some countries). In certain jurisdictions, tax rates for foreign owners may be higher, particularly in the case of non-EU nationals.
Financing: Foreigners may have more difficulty securing financing for real estate in some countries. In the UK and Spain, for example, foreign buyers may face higher down payment requirements (typically 30% or more), while some countries, like Germany, require proof of income and financial stability.

2. Foreign Ownership of Businesses in Europe

In most European countries, foreign nationals are allowed to own and operate businesses with few restrictions, though each country has specific rules about business structures, taxation, and labor laws.

General Business Ownership Rules

European Union (EU): As a member of the EU, citizens of EU countries can freely own businesses in other EU member states under the principle of freedom of establishment, which allows businesses to operate across borders with minimal restrictions. Foreigners from outside the EU may face some additional regulatory steps to open a business, but overall, the process is straightforward in most countries.
United Kingdom: While no longer part of the EU, the UK remains an attractive destination for foreign business ownership. Foreign nationals can set up companies in the UK, and the process is relatively simple. The most common business structures are Limited Liability Companies (LLC), Private Limited Companies (Ltd), and Public Limited Companies (PLC). The UK has a well-established legal framework for business incorporation, taxation, and contracts.

Country-Specific Business Ownership

Germany: In Germany, foreign nationals can easily set up businesses, with the most common structure being the GmbH (Gesellschaft mit beschränkter Haftung), similar to an LLC. There are no restrictions on foreign ownership of businesses, although some sectors (e.g., financial services, media) may have stricter regulations. The German economy is known for its stability and strong industrial base, making it a popular destination for foreign investors.
France: France allows foreign nationals to own businesses. The most common structures are the Société à Responsabilité Limitée (SARL) or Société par Actions Simplifiée (SAS). Foreign entrepreneurs may face more bureaucratic hurdles than in some other countries, and certain industries may require additional permits, particularly in the case of regulated sectors.
Italy: In Italy, foreigners can own businesses and there are no significant restrictions. The Società a Responsabilità Limitata (SRL) is the most common structure for small businesses. However, Italy has a relatively high tax burden, and the administrative process to start a business may be more time-consuming than in other European countries.
Portugal: Portugal is quite welcoming to foreign business owners, particularly through its Golden Visa program. Entrepreneurs can set up businesses through structures like the Sociedade por Quotas (Lda), which is similar to a limited liability company. Portugal has become a popular destination for tech startups and digital nomads due to its favorable tax laws and the relatively low cost of living.
Switzerland: Foreigners can own businesses in Switzerland, and it is a prime location for international companies due to its favorable tax regime. The process for incorporating a business is relatively straightforward, but the cost of living and business expenses can be high. Switzerland also offers a Swiss Entrepreneur Visa for individuals wishing to establish businesses in the country.

Visas for Entrepreneurs

Many European countries offer visa programs for foreign nationals who wish to start businesses. For instance:

Golden Visa Programs (e.g., Portugal, Spain, Greece) allow foreign investors to gain residency rights in exchange for making significant investments in the local economy, often through property or business ownership.
Start-Up Visas in countries like France and Germany allow entrepreneurs to establish and operate businesses while living in the country.

3. Foreign Investment in European Stocks and Securities

Foreigners can also invest in European stocks and securities through local exchanges, such as the London Stock Exchange (LSE), Euronext (Paris, Amsterdam, Lisbon), Frankfurt Stock Exchange, and others. There are no general restrictions on foreign ownership of shares in publicly listed companies, though taxes on dividends, capital gains, and transactions may apply, depending on the country and the investor’s residency status.

Conclusion

Foreign ownership in Europe is generally quite open, with individual country regulations governing the extent of restrictions and tax rules. In the real estate sector, most countries have no major restrictions on foreign ownership, though taxes, financing difficulties, and bureaucratic procedures can vary. In business ownership, EU citizens benefit from the freedom of establishment, while non-EU nationals face some additional hurdles, though the process is still relatively straightforward in most cases. If you’re a foreign investor or entrepreneur interested in Europe, it’s important to consult local laws, tax regulations, and legal requirements for the specific country where you intend to invest or operate.

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Lifestyle EUROPE

Visa EUROPE

December 7, 2024ZONEZI No commentsBusiness, EUROPE, Legal International, News

In the United States, foreign nationals are generally allowed to own property and start businesses, but there are specific regulations and considerations depending on the type of ownership. Below is an overview of foreign ownership rights for both real estate and business ventures in the U.S.

1. Foreign Ownership of Real Estate in the USA

Residential Property

Foreign nationals are generally allowed to buy residential property in the U.S. without restrictions on ownership, whether they are residents or non-residents.
There is no federal law preventing foreign ownership of real estate in the U.S., though some states or localities may have specific rules that impact property ownership.
Foreigners can buy property as individuals, corporations, or limited liability companies (LLCs).

Financing and Mortgages

Foreign buyers may face more difficulty when applying for mortgages, especially if they do not have a U.S. credit history. Many U.S. lenders require foreigners to make larger down payments (typically around 30% or more).
Non-residents can obtain financing, but the terms may be less favorable than for U.S. citizens or residents.

Tax Implications

Foreigners who own real estate in the U.S. are subject to U.S. taxes, including property taxes, income taxes (if they rent out the property), and capital gains tax (when selling the property).
FIRPTA (Foreign Investment in Real Property Tax Act): If a foreign national sells property in the U.S., a withholding tax of 15% is imposed on the gross sale price.
Estate Taxes: U.S. estate taxes apply to foreign nationals’ properties in the U.S., and the exemption for non-citizens is lower than for U.S. citizens, which may impact estate planning.

Commercial Property

Foreign investors can also buy commercial property in the U.S. without restrictions. This includes office buildings, shopping centers, and industrial real estate.
Like residential property, financing for commercial real estate can be more challenging for non-residents, and they may be required to provide more collateral or a higher down payment.

Restrictions in Certain States

While there is no federal law restricting foreign ownership of property, certain states and municipalities may have specific regulations. For example, some states may have rules related to foreign investment in agricultural land, while others might require additional disclosures or tax filings.

2. Foreign Ownership of Businesses in the USA

General Rules

Foreign nationals can generally own businesses in the U.S., with a few exceptions in certain regulated industries. There are no federal restrictions that prevent a foreign national from starting or owning a business, but the process and requirements can vary depending on the type of business.

Types of Business Structures

LLC (Limited Liability Company): A popular structure for foreign investors. Foreign nationals can form an LLC in the U.S. and have full control of the business without the need for a U.S. citizen partner. The LLC structure offers limited liability and flexible taxation options.
Corporation: Foreigners can establish corporations in the U.S. as well, such as an S-Corporation (with some restrictions) or C-Corporation.
- C-Corporation: Can be owned entirely by foreigners and is the preferred choice for many foreign investors, particularly those wishing to raise capital or go public.
- S-Corporation: Only U.S. citizens or residents (green card holders) can own shares in an S-Corporation, so foreigners cannot use this structure unless they meet residency requirements.

Visa Requirements for Entrepreneurs

Foreign nationals seeking to establish a business in the U.S. may need a visa. Some of the common visa options for foreign entrepreneurs include:
- E-2 Treaty Investor Visa: For nationals of countries with which the U.S. has a treaty of commerce. This visa is for individuals who wish to invest a substantial amount in a U.S. business.
- L-1 Visa: For managers or executives of foreign companies who are being transferred to a U.S. branch, subsidiary, or affiliate of the company.
- EB-5 Immigrant Investor Visa: This visa allows foreigners to invest at least $1 million (or $500,000 in targeted employment areas) in a U.S. business and create or preserve 10 permanent full-time jobs for U.S. workers. The EB-5 program leads to U.S. permanent residency (a green card).

Taxation

Foreign owners of businesses in the U.S. are subject to U.S. income tax on any income generated within the country. Foreign-owned businesses may also be subject to Withholding Tax on income paid to foreign investors.
Form 5472: Foreign owners of U.S. corporations must file Form 5472 with the IRS to disclose information about related party transactions, which is required under U.S. tax laws.
Foreign businesses or individuals must be aware of FATCA (Foreign Account Tax Compliance Act) and FBAR (Foreign Bank Account Report) requirements if they have financial interests in U.S.-based accounts or businesses.

Restricted Industries

Certain industries are subject to restrictions for foreign investors, particularly those with implications for national security or those considered sensitive, such as:

Defense and Military: Foreign investment is restricted in defense-related businesses.
Airlines and Broadcasting: U.S. law limits foreign ownership of airlines and broadcasting companies to prevent excessive foreign control of industries that are vital to national security.
Telecommunications: Foreign investment in U.S. telecommunications companies may also be subject to review by the Committee on Foreign Investment in the United States (CFIUS) to ensure national security interests are protected.

3. Foreign Investment in U.S. Stocks and Securities

Foreigners can invest in U.S. stocks, bonds, and other securities through brokerage accounts. Foreign investors can buy shares in U.S. public companies or purchase U.S. government debt.
Dividends and Interest: Foreign investors may be subject to U.S. withholding taxes on dividends and interest earned from U.S. investments, although tax treaties between the U.S. and other countries may reduce the withholding tax rate.

Conclusion

Foreign nationals can own property and businesses in the U.S. without many significant restrictions. However, foreign ownership comes with specific financial, legal, and tax implications, which may vary depending on the type of investment (real estate or business), the state of ownership, and the industry. For real estate, non-resident buyers may face difficulties in financing, while business owners should carefully navigate the visa, tax, and ownership structure requirements. It’s important for foreigners to work with legal and financial professionals to ensure compliance with U.S. laws and optimize the ownership process.

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Lifestyle USA

Visa USA

December 7, 2024ZONEZI No commentsBusiness, Legal International, News, USA

Thai Exports Continued to Grow

Thai Exports Continued to Grow in September Raising Prospects for an Upward Revision in 2024

Despite the cooling trends in exports, SCB EIC anticipates growth to surpass initial estimates of 2.6% for the year, propelled by rising gold exports and strong electronic sales.

In September 2024, Thai exports grew 1.1% YOY, slowing from 7% growth. Total exports reached USD 223,176 million for the year, with challenges from global trends and market fluctuations ahead.

Exports Show Cooling Trends in September 2024

In September 2024, Thailand’s exports totaled USD 25,983.2 million, reflecting a modest year-over-year growth of 1.1%. This growth slowed from the previous month’s 7% and fell short of analysts’ expectations of 2.9%. Notably, the total export value for the first three quarters of the year reached USD 223,176 million, indicating a 3.9% growth on a customs basis. The decline in growth can be attributed to factors such as a slowdown in computer exports and the first year-on-year decline in gold exports in five months, influenced by a high base effect from last year.

December 2, 2024ZONEZI No commentsBusiness, News, Thailand

Thailand’s automotive industry

Thailand’s automotive industry to get “responsible business” toolkit from ILO

The International Labour Organization (ILO) has developed a new toolkit to enhance social dialogue between employers and workers in Thailand’s automotive supply chain. This toolkit aims to strengthen responsible business conduct in the sector.

Nearby car dealerships

The toolkit was developed in response to an ILO report which found that social dialogue and worker representation within the automotive industry needed improvement to address issues like discrimination, excessive working hours, and a lack of training and career progression opportunities.

This industry-oriented toolkit provides a comprehensive set of guidelines, interactive training, and mentoring and advisory services for automotive businesses in Thailand.

December 2, 2024ZONEZI No commentsBusiness, News

The Thai housing market has faced challenges due to both external and domestic factors, including a downturn in China’s real estate sector, decreased construction demand, high household debt, and an aging population.

Thailand’s residential market has faced challenges due to external and domestic factors, including a downturn in global construction demand and the country’s high household debt.

Key takeaways

Thailand’s residential market faces pressures from both the slowdown in China’s real estate sector and domestic economic strains, leading to reduced consumer spending and high mortgage rejection rates.
Nationwide land permits fell 14.7% YoY in H1 2024, with severe drops in construction approvals, especially in Bangkok and the Northeast region, reflecting the broader industry slowdown.
Developers are focusing on luxury properties as lower-income buyers struggle to qualify for mortgages, signaling a potential K-shaped recovery.

November 18, 2024ZONEZI No commentsBusiness, News, Thailand

Why You Need a Real Estate Agent!

Purchasing a home or making an investment in real estate is one of the most significant financial decisions you’ll ever make. Whether you’re a first-time homebuyer or an experienced investor, the expertise of a real estate agent is invaluable. Here’s why hiring a professional agent should be at the top of your list when navigating the complex world of property transactions.

1. Expert Knowledge of the Local Market

One of the primary reasons to hire a real estate agent is their in-depth knowledge of the local market. Agents have access to up-to-date listings and can provide detailed information about neighborhoods, property values, and market trends. This insight allows you to make an informed decision, whether you’re looking for a starter home or considering a long-term real estate investment.

A skilled agent understands market fluctuations and can help you navigate potential investment opportunities, ensuring you make a smart purchase that will yield strong returns over time.

2. Access to Off-Market Listings

In today’s competitive market, many of the best deals never make it to public listing sites like Zillow or Realtor.com. A real estate agent has exclusive access to off-market properties or homes that haven’t yet been listed. This can give you a significant edge over other buyers, especially in fast-moving markets where properties sell quickly.

3. Negotiation Expertise

Whether you’re buying your first home or a multi-unit investment property, the negotiation process can be tricky. A professional real estate agent acts as a negotiator on your behalf, ensuring you get the best price and terms for the property. They know how to handle multiple offer situations, make counteroffers, and avoid common negotiation pitfalls that could cost you money in the long run.

For real estate investors, an agent can also help you assess the true value of a property, factoring in repair costs, potential rental income, and other key investment considerations.

4. Streamlined Paperwork and Legalities

Real estate transactions involve a significant amount of paperwork. From purchase agreements to disclosure forms, the paperwork can be overwhelming, especially for first-time homebuyers. A real estate agent ensures that all documents are completed accurately and filed on time, preventing costly mistakes.

Moreover, they are well-versed in real estate laws and regulations, ensuring that you stay compliant with local, state, and federal requirements. This minimizes the risk of legal issues or delays during the transaction process.

5. Time-Saving

Searching for the right property, scheduling showings, negotiating deals, and handling paperwork can be incredibly time-consuming. Hiring a real estate agent saves you valuable time and effort. They take care of all the legwork, allowing you to focus on your career, family, or other priorities.

An experienced agent also knows how to quickly identify properties that match your budget, location preferences, and investment goals, reducing the amount of time spent on properties that aren’t a good fit.

6. Guidance Through the Financing Process

For many homebuyers, securing financing is one of the most complex parts of the real estate transaction. A skilled real estate agent can connect you with trusted lenders and help you understand your financing options. Whether you’re seeking a traditional mortgage, FHA loan, or an investment property loan, an agent can guide you through the process and ensure you get the best possible rates and terms.

For real estate investors, understanding financing options, including hard money loans, refinancing, and investment property financing, is crucial. Your agent can offer insight into the most effective strategies for funding your purchase.

7. Market Insights for Real Estate Investors

If you’re looking to invest in real estate, a professional agent is indispensable. They can provide valuable insights into emerging markets, property appreciation potential, and the best types of properties for rental or resale. From finding fix-and-flip properties to identifying neighborhoods with high rental demand, an agent can help you maximize your investment.

They also have access to market data that can help you analyze the potential ROI (return on investment) for various properties, making it easier to make sound investment choices.

8. Emotional Support During the Process

Real estate transactions can be stressful, especially when emotions are running high. Whether it’s the excitement of buying your first home or the pressure of making a smart investment, a real estate agent acts as a calming force during the process. They offer objective advice, reduce stress, and ensure that your decision-making is based on facts rather than emotions.

9. Long-Term Relationship and Future Assistance

Even after the transaction is completed, your relationship with a real estate agent doesn’t have to end. A trusted agent can be a valuable resource for future home purchases, investment opportunities, or even property management needs. Many real estate agents also offer property maintenance recommendations, helping you keep your property in top shape.

Conclusion

Hiring a real estate agent is an essential step for anyone looking to purchase a home or invest in real estate. Their expertise, market knowledge, and negotiation skills can save you time, money, and stress while ensuring you make a sound investment. Whether you’re a first-time buyer or an experienced investor, partnering with a professional agent will provide the guidance and support you need to make the best possible decision.

If you’re ready to start your journey, reach out to a qualified real estate agent today and take the first step toward finding your dream home or investment property!

Check out Properties in Thailand

November 11, 2024ZONEZI No commentsBusiness, Legal International, News, Project Developers

Thai condo market slows down

Thai condo market slows down amid withdrawal of Chinese and Russian investments

Condominium sales in Bangkok are slowing down due to a decline in foreign buyers, particularly from China and Russia.

The Thai condominium market is experiencing a significant slowdown due to the withdrawal of Chinese and Russian capital.

Key takeaways

The Thai condominium market is slowing down due to reduced investments from Chinese and Russian buyers.
Condominium sales to foreigners dropped by 6% in Q2 2024, with the total sales value decreasing by 18%.
The Thai government is considering measures to revitalize the real estate market including easing property ownership restrictions for foreigners.

In recent years, Chinese and Russian investors have dominated the condominium market in Thailand, particularly in cities like Bangkok and Pattaya.

September 26, 2024ZONEZI No commentsBusiness, News, Thailand

U.S.-China tensions to boost demand for office and industrial real estate in Southeast Asia

The ongoing U.S.-China tensions have led to a strategic reassessment of supply chains and investment locations. With the imposition of tariffs and trade barriers, multinational corporations are looking beyond traditional powerhouses to establish their operations. Southeast Asia, with its growing middle class, lower labor costs, and strategic location, presents an attractive alternative.

The ongoing tensions between the United States and China have prompted a strategic reconsideration of supply chains and investment locations. As tariffs and trade barriers are imposed, multinational corporations are seeking to establish their operations in locations beyond the traditional powerhouses.

Frasers Property, a prominent real estate developer controlled by Thailand’s wealthiest individual, is strategically positioning itself to leverage increasing U.S.-China geopolitical tensions to address the surplus of office space in the capital of Thailand. This oversupply, a legacy of previous economic shifts and changes in corporate real estate needs, presents a significant challenge.

The company is optimistic that these international tensions will catalyze a renewed demand for commercial and industrial real estate, particularly in Southeast Asia, as companies reassess their operational strategies in response to the evolving trade landscape.

September 23, 2024ZONEZI No commentsBusiness, News

Bangkok, 20 June 2024 – The Tourism Authority of Thailand (TAT) and Jeollanum-do have signed a Memorandum of Understanding to jointly promote Thailand’s Songkran Festival and Jeollanam-do’s Jeongnamjin Jangheung Water Festival to a global recognition.

In the presence of H.E. Mr. Tanee Sangrat, Ambassador of Thailand to the Republic of Korea, the MOU was signed by TAT Governor, Ms. Thapanee Kiatphaibool, and the Governor of Jeollanam-do, Mr. Kim Young-rok, on 17 June 2024 in Seoul, South Korea. Also joining the ceremony were Mr. Kim Seong, Governor of Jangheung County, Jeollanam-do, and TAT executives.

Ms. Thapanee said “This MOU is a result of the integration of cooperation between TAT and Jeollanam-do to promote two-way tourism through soft powers of the two countries. Thailand’s Songkran Festival and Jeollanam-do’s Jeongnamjin Jangheung Water Festival hold similar celebrations. Both are centred on the use of ‘water’ as a means for establishing friendly relationships.”

TAT also holds existing MOU with Boryeong City jointly promote Thailand’s Songkran Festival and Boryeong Mud Festival and another agreement with the Korea Association of Travel Agents (KETA) to promote travel between the two countries. Thailand and South Korea are currently promoting the “2023-2024 Korea-Thailand Mutual Visit Year” to commemorate the 65th anniversary of diplomatic relations between the two nations.

During the Jeollanam-do International Tourism Culture Contest, on 17-18 June 2024, at Gwanghwamun Square in Seoul, TAT presented Thailand through five must-do activities – Must East local food, Must See local culture, Must Seek unseen attractions, Must Buy local arts and crafts, and Must Beat local sports.

Throughout two days, the Thailand booth featured special Songkran cultural performances, and DIY workshops of umbrella painting, Lanna’s hanging flag crafting, and Thai potpourri making. Over 10,000 visitors visited the booth.

June 19, 2024ZONEZI No commentsBusiness, News

Khao Lak, Phang-Nga, 5 June 2024 – The Thailand Travel Mart Plus (TTM+) 2024 officially opened today at the JW Marriott Khao Lak, Phang-Nga and will run until Friday, 7 June.

Mr. Sermsak Pongpanit, Minister of Tourism and Sports, presided over the opening ceremony. Joing him at the event were Miss. Niracha Banditchat, Vice Governor of Phang-Nga Province, Ms. Thapanee Kiatphaibool, Governor of the Tourism Authority of Thailand (TAT), Mr. Lertsak Ponklin, President of Phang-Nga Tourism Association, and officials and figures from the Thai public and private sectors.

Mr. Sermsak said, “The Thailand Travel Mart Plus, organised in line with the government’s “IGNITE Thailand” vision, has played a crucial role as a premier showcase of Thai tourism. I am confident that this year’s event will further affirm its well-earned recognition as a must-attend B2B tradeshow that provides a valuable business platform for sellers and buyers.”

This year, in its 21st edition, the TTM+ presents the theme ‘Amazing Thailand: Your Stories Never End’, the latest marketing communication campaign recently launched by the TAT. The dynamic theme shines a spotlight on Thailand’s direction towards delivering meaningful travel experiences.

June 4, 2024ZONEZI No commentsBusiness, News