What is an SCI in France?

An SCI (Société Civile Immobilière) is a French civil real estate holding company designed specifically for property ownership. It allows multiple owners to hold property through transferable shares, simplifies succession planning (parents can gift shares to children progressively over time within tax-free annual allowances), and is the standard structure for French family vacation homes. An SCI does not provide commercial liability protection equivalent to a commercial LLC, and it cannot run primarily commercial activity like short-term rentals without losing its civil status.

Is an offshore trust still useful for European real estate?

For most European real estate, the historical advantages of offshore trusts have narrowed substantially under EU beneficial ownership transparency, France's trust reporting regime, Spain's look-through provisions, and similar frameworks across the EU. Trusts remain useful for ultra-high-net-worth multi-jurisdictional families, especially where the trust governance and asset protection benefits outweigh the reporting overhead. For typical foreign buyers with one or two European properties, a local company structure usually delivers comparable protection at a fraction of the cost.

Can I avoid forced heirship by using a holding company?

Sometimes, depending on the country and structure. In France, holding property through an SCI converts the property into transferable shares, which gives some flexibility in succession planning, but forced heirship still applies to the shares, just at the share level rather than the property level. In Spain and Italy, forced heirship provisions have similar look-through effects on holding company shares. The 2015 EU Succession Regulation (Brussels IV) allows EU residents to elect their nationality's succession law to apply to their estate, which can be more effective than structural workarounds for many cross-border buyers.

What is the simplest structure for a US buyer of European property?

For a single property under €1 million, personal ownership is often the cleanest path, combined with proper succession planning (typically a Brussels IV election in EU jurisdictions) and US tax compliance (Form 8938 for assets, FBAR for foreign accounts holding more than $10,000). For rental property, a local LLC (Spanish SL, French SARL, etc.) provides liability separation and operational clarity, while remaining inside a structure US tax authorities understand and can characterize cleanly. US LLCs owning foreign real estate directly can create tax characterization mismatches and are often best avoided, depending on the specific facts.

How much does it cost to set up a real estate holding company in Europe?

Setup costs typically range from €1,500 to €5,000 across most major European jurisdictions, depending on minimum capital requirements and the complexity of the structure. Spain (SL) and Portugal (LDA) are toward the lower end; France (SARL or SCI) and Germany (GmbH) toward the higher end. Annual maintenance, accounting, tax filings, registered office, typically runs €2,000-€8,000 per year per entity. Adding an overlay holding company in Luxembourg, Malta, or Cyprus adds setup costs of €5,000-€20,000 and annual costs of €5,000-€25,000.

Real Estate Holding Structures for Foreign Property Owners in 2026: LLC, SPV, Trust, or Foundation? The Cross-Border Decision Framework

Q: Should I hold foreign property in my own name or in a company?

For a single primary or vacation home with no commercial use and a simple succession picture, personal ownership is usually best, the structural overhead of a company isn't worth the protection. For rental property, multi-owner family purchases, properties worth more than €500,000, or any setup where forced heirship, wealth tax, or asset protection are concerns, a local holding company (SL, SARL, SRL, LDA, GmbH) is generally the correct starting point.

Published on: May 13, 2026

Quick answer: Holding foreign property in your own name can, depending on the jurisdiction and your circumstances, expose you to forced heirship, wealth tax, probate delay, capital gains, and personal liability, exposures that a holding structure may help mitigate. The right approach depends on your situation. Cross-border buyers generally choose from four structural families: a local LLC (Spanish SL, French SARL, German GmbH, Italian SRL) for rental and liability separation; a civil-law holding company like the French SCI for family succession; a trust for high-net-worth multi-jurisdictional families; and a foundation for ultra-high-net-worth succession architecture. Common and potentially costly pitfalls can include using a US LLC to own foreign property, using an offshore trust in a civil-law jurisdiction such as France that treats them unfavourably, and restructuring after closing, which may trigger transfer tax again. Whether any of these applies depends on the jurisdiction.

Almost every first-time foreign property buyer holds the asset in their own name. Almost every second-time foreign property buyer regrets it.

The reasons are predictable: forced heirship rules they didn't know existed, wealth taxes they didn't expect, probate delays that froze the property for two years after a spouse's death, capital gains exposure that swallowed half the appreciation, and asset-protection vulnerabilities that turned a single litigation event into a multi-country crisis.

This is the 2026 framework for choosing a holding structure for foreign real estate. Not the marketing-brochure version. The operational reality, by structure type, by country, and by investor profile, based on how cross-border buyers actually solve the trade-offs.

Why Personal Ownership Quietly Fails for Cross-Border Buyers

Personal ownership is the default. It's the simplest, the cheapest, and the least flexible. For a single-property buyer who intends to live in the property as a primary or vacation home and has no specific tax, succession, or asset-protection complexity, personal ownership is often correct.

For a cross-border buyer with any combination of (a) multiple properties, (b) heirs in more than one jurisdiction, (c) significant total wealth, (d) commercial intent (rental, development, resale), or (e) a desire to limit liability, personal ownership becomes a slow-motion mistake.

Five structural exposures personal owners commonly underestimate:

Forced heirship. Civil law jurisdictions, France, Spain, Italy, Portugal, Germany, most of Latin America, apply mandatory inheritance shares that override your will. In France, children collectively are entitled to 50-75% of an estate depending on number; you generally cannot disinherit them, outside specific exceptions. In Spain, two-thirds of the estate is reserved for legitimarios (forced heirs). A US-style will leaving everything to a surviving spouse can be partially invalidated under the law of the property's location.

Wealth tax. France's impôt sur la fortune immobilière (IFI) triggers on real estate net worth above €1.3 million. Spain's wealth tax applies at the regional level (some regions effectively waive it, others impose substantial annual liability). Switzerland imposes cantonal wealth tax on global net worth for residents and on Swiss real estate for non-residents. These regimes target individual owners; well-structured corporate holdings can sometimes change the analysis (with extensive technical conditions).

Probate paralysis. When a non-resident owner dies, the property cannot be sold or transferred until probate concludes in the country where the property is located, typically 12-24 months in France, Spain, and Italy. During this window, the property generates expenses but no liquidity for the heirs.

Capital gains exposure on death. Some jurisdictions (like the US) provide a step-up in basis on inheritance, eliminating the deceased's accumulated capital gain. Others (like France and Spain in most cases) do not provide a step-up for the property's country tax, the heirs inherit the original cost basis, and a future sale triggers gain calculated from the long-ago purchase price.

Personal liability. A US investor renting a Spanish villa on Airbnb without an entity is personally liable for any guest injury claim. The same investor through a properly capitalized Spanish SL (limited liability company) has meaningful liability containment.

Each of these can be partially or fully mitigated by the right holding structure. None of them are mitigated by personal ownership.

The Four Holding Structures Cross-Border Buyers Actually Use

Foreign property buyers in 2026 generally choose from four structural families. Each has a distinct profile of cost, complexity, tax treatment, and protection.

Structure 1: Local Limited Liability Company (LLC, SL, SARL, GmbH, SRL)

A local LLC is a company incorporated in the country where the property is located. In Spain it's an Sociedad Limitada (SL). In France, an SARL. In Germany, a GmbH. In Italy, an SRL. In Portugal, an LDA. The property is owned by the company, and the foreign buyer owns shares in the company.

Why investors use it. Operational simplicity, recognized by local banks, can hold one or several properties, provides liability separation between the property and the owner's personal assets, makes rental income and expense management cleaner, and allows multiple shareholders (family members, business partners).

Trade-offs. Annual corporate tax filings, accounting requirements, mandatory minimum capital in some jurisdictions, additional setup cost. Many jurisdictions treat local LLCs holding mainly residential property less favourably than they would a pure investment company, for example, certain Spanish autonomous communities apply standard transfer tax even to share transfers in property-rich SLs (the transmisión de inmuebles a través de entidades rules).

Best for. Foreign buyers acquiring rental property, multi-owner family purchases, properties valued €300,000 to €5 million, owners who want a clean operational vehicle for commercial activity.

Structure 2: Civil-Law Property Holding Company (SCI in France, similar in Belgium and Luxembourg)

A Société Civile Immobilière (SCI) is a French civil real estate company, neither a commercial company nor a personal asset, but a specific civil law construct designed exclusively for holding property. Belgium, Luxembourg, Monaco, and Switzerland have similar structures.

Why investors use it. The SCI is the workhorse of French property planning. It allows multiple owners (typically family members) to hold property through transferable shares, dramatically simplifies succession planning by allowing parents to gift shares to children over time within annual tax-free allowances, and provides a clean vehicle for joint family ownership of vacation homes.

Trade-offs. An SCI does not provide commercial liability protection in the way a commercial LLC does, partners are jointly liable for SCI debts. It also has specific tax filing requirements and cannot legally engage in commercial activity (so it cannot run a furnished short-term rental as its primary activity without losing its civil status and being reclassified as commercial).

Best for. French family vacation home ownership, multi-generational succession planning, properties where partners want to gift ownership shares progressively over time.

Structure 3: Trust (Common Law and Offshore)

A trust is a common law construct in which the legal owner (trustee) holds property for the benefit of beneficiaries under terms set out in a trust deed. Trusts are extensively used in the US, UK, Canada, Australia, and offshore jurisdictions (Jersey, Guernsey, Cayman, BVI, Bahamas) and are recognized in some civil law jurisdictions for foreign property structuring.

Why investors use it. Strong asset protection (the property is not legally the beneficiary's), powerful succession planning (the trust deed dictates inheritance, bypassing probate and often bypassing forced heirship), confidentiality in jurisdictions that don't publish beneficial ownership, and continuity (the trust survives the settlor's death without administrative interruption).

Trade-offs. Trusts are recognized variably in civil law countries. France in particular has historically treated foreign trusts with hostility, the French trust reporting regime imposes significant disclosure and taxation obligations, and a French resident settlor or beneficiary may face wealth tax on trust assets. Spain has aggressive look-through provisions. Costs are meaningful: setup runs