You built a structure in order to get in. On the day you want to get out, it will answer a question that is no longer being asked, and answer it perfectly.
Roi called me after the fourth offer, and all of them were identical on exactly the point that bothered him.
“Everybody wants the land. Nobody wants the company.”
“And why does that bother you?”
“Because that's what I set it up for.”
Roi bought land in Cyprus a few years ago and held it in a local company. Then he did what a good developer does. He worked it. Procedures, approvals, planning, time, money, and above all patience. The land he bought and the land he held after those years were two completely different things in economic terms.
And when he decided it was time to realize it, he wanted to sell the company.
“Why a company and not the land?” I asked him, because I wanted to hear it from him.
“Because that's what I was told at the start. That it was better from a tax perspective.”
“Who said so?”
He thought for a moment. “I don't remember. It was six years ago.”
It is a sentence I have heard many times, and it almost always marks the same thing: a structural decision made at the entry stage, based on something that sounded right then, and that no one has gone back to check since.
We checked.
In Cyprus, capital gains tax applies to the sale of real estate located in Cyprus. It also applies to the sale of shares in a company that directly holds such real estate. It also applies when the holding is indirect, if a sufficient share of the value of the shares derives from Cypriot real estate, and the threshold for this was lowered at the beginning of 2026.
I explained this to him, and then he asked the question every developer asks at this stage.
“So what's the difference, really?”
“As far as Cypriot tax goes, in your case, less than you thought.”
He fell silent.
“For six years I've been holding it like this for a reason that doesn't exist?”
“I don't know whether it didn't exist then. I know it doesn't work now, and that nobody checked in the meantime.”
And here comes the part that truly surprised him.
“But wait,” he said. “If so, the buyer actually benefits from buying shares. He saves the transfer fees.”
He was entirely right. In Cyprus the buyer pays transfer fees to the Land Registry when the title (the tabu) moves to his name. In a share deal the title doesn't move, and the saving is real and not trivial.
“So why does everybody want specifically the land?”
And that is the right question. The answer is that they aren't refusing to pay. They are refusing to pay now.
When they buy land from you, they check the land. Who the owner is, what is registered, what is permitted to be built. That is a process with a beginning and an end.
When they buy a company from you, they buy its entire life from the day it was founded. Every contract, every payment, every engagement, every filing. And even after a thorough check, the buyer can't know he has seen everything.
So he doesn't necessarily lower the price. He does something else, and smarter from his point of view. He asks for broad representations and undertakings. He asks that part of the consideration be held back for a period. He asks that Roi remain responsible for things that surface later. And he takes himself a few more months of due diligence before he signs.
“So it's not that I get less,” Roi said slowly.
“It's that you get it differently. Part of the money doesn't come in on the signing day. Part of it depends on nothing surfacing. And the period it depends on is not one you set.”
“And in a land deal?”
“In a land deal you sell and you're done. Less waiting, less dependence on the past.”
He grasped it quickly. Developers always grasp this quickly, because they live on cash flow and know exactly what it means to have money sitting with somebody else for two years.
“And then what's left for the company?”
And that is no longer only a legal question. If Roi sells the land, the company is left with the proceeds inside it, and a decision has to be made about what to do with it. This has different implications in two systems at once, the one where the company is located and the one where Roi lives, and they vary from case to case. It is exactly the kind of decision that must not be made without an accountant who knows both systems, and without running the calculation on paper before signing and not after.
As of today he still holds the land.
He did not refuse to sell. He simply isn't willing to decide before he has both numbers side by side, and that calculation he didn't make six years ago.
I see this recur among very experienced developers. The structure is built at the beginning, when the only question on the table is how to get in. Nobody asks then how to get out, because the exit seems distant and theoretical. Then the rules change, the market moves, and you arrive at the day of realization with a structure built for a different question.
It isn't a bad structure. It simply wasn't checked.
The question I would ask in your place
- Why exactly did I choose this structure, and when did someone last check whether the reasoning is still correct?
- On the day of realization, how much of the consideration reaches me at signing, and how much depends on nothing surfacing over the next three years?
- Have I run the calculation of the two routes against each other, or am I assuming that I know?
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית