Buy-to-let investments in Spain : Investing as a Private Person versus Establishing a Company
Könönen, Riitta (2011)
Könönen, Riitta
Tampereen ammattikorkeakoulu
2011
All rights reserved
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2011121518511
https://urn.fi/URN:NBN:fi:amk-2011121518511
Tiivistelmä
The subject of the thesis was chosen when the Zariko properties needed a re-search to find out when is it more profitable to be private person and when is it time to establish a company when investing in apartments to let. The target of the thesis was to investigate three cases: private person, Finnish company and Spanish company investing in one, ten or hundred apartments. The research was made by finding information from the internet, with some professional books as well as some professionals who were interviewed. The figures for the example calculation were made up together with the professionals.
The basic steps to purchase of the apartment, company forms in both countries and the establishment of the company were investigated and presented. It was found that the best company form for this kind of business is Spanish sociedad limitada. There is a double taxation treaty between Finland and Spain that pre-vents paying twice the taxes for the income from the other country.
It was found that when owning one apartment it is more profitable to be private person but in the case of owning ten apartments a company makes more profit. It was researched further to find out where the line goes, and it was found that when purchasing seventh apartment it is time to consider establishing a busi-ness. And the company form should be Spanish sociedad limitada. Finnish company was not the most profitable in any case. Finnish company should not be considered in this case because the rental income is taxed in Spain. Be-cause of that the company cannot make any tax deductions but has many ex-penses, so this option is not recommended.
The calculations were quite basic and could be researched further and also other expenses could be taken into account. The expenses of the purchase of the property could be investigated more deeply.
The basic steps to purchase of the apartment, company forms in both countries and the establishment of the company were investigated and presented. It was found that the best company form for this kind of business is Spanish sociedad limitada. There is a double taxation treaty between Finland and Spain that pre-vents paying twice the taxes for the income from the other country.
It was found that when owning one apartment it is more profitable to be private person but in the case of owning ten apartments a company makes more profit. It was researched further to find out where the line goes, and it was found that when purchasing seventh apartment it is time to consider establishing a busi-ness. And the company form should be Spanish sociedad limitada. Finnish company was not the most profitable in any case. Finnish company should not be considered in this case because the rental income is taxed in Spain. Be-cause of that the company cannot make any tax deductions but has many ex-penses, so this option is not recommended.
The calculations were quite basic and could be researched further and also other expenses could be taken into account. The expenses of the purchase of the property could be investigated more deeply.