Buying a Whole Building Abroad: Ownership Structures, Partnerships Between Investors and What to Check

Investors who know the apartment market abroad sometimes reach the next stage: an old building in a city centre, a small apartment block to let, or a structure that can be renovated and divided into units. Investing in a whole building can be more efficient than buying individual apartments, but it raises legal questions that do not exist with a single apartment. This guide goes through those questions, without recommending any market or particular deal.

1What is different about buying a whole building compared with an apartment?

• The land. With an apartment in a block you buy a unit and a share of the common areas. With a whole building you usually also buy the land, and that is where most restrictions on non-EU buyers apply.
• Registration. An old building is usually registered as one property. As long as it has not been split into units, you cannot sell or mortgage one apartment in it separately.
• Existing tenants. In an occupied building you also buy the leases, and sometimes the protections local law gives tenants.
• Permits. Extensive renovation, adding a floor or a change of use require a permit, and sometimes heritage approvals.
• Financing and tax. The bank assesses the building as a project, and the deal structure affects transfer tax, VAT and tax on exit.
• Partners. There is usually more than one investor, so an agreement between them is needed.

2In whose name do you buy a whole building: an individual, co-owners or a company?

There are three main routes, and each has a different price:

The restrictions on foreign buyers often decide the choice. In Romania, under Law 312/2005, an Israeli without an EU passport does not register land in their own name, and a Romanian company (SRL) can register it even when all the shares are held by a foreigner. In Bulgaria the position is similar, and a Bulgarian company (EOOD) is usually used. In Cyprus, under Cap. 109, a non-EU buyer needs a Council of Ministers permit for the property to be registered in their name. In Greece there is a prior permit for buying in border areas. A country-by-country overview appears in the guide to restrictions on foreign buyers, with details in the guide to owning land in Bulgaria and the guide to the Council of Ministers permit in Cyprus.

On the Israeli side, a foreign company whose business is controlled and managed from Israel may be treated as an Israeli resident for tax purposes, and a foreign company holding a rental property in a low-tax country may be treated as a controlled foreign company. In the USA, an LLC is tax-transparent there but is generally treated as a body of persons in Israel. So the structure is decided with a tax adviser before signing. See the guide to the Israeli side of property abroad and the guide to an LLC for Israeli investors.

3How do investors who co-own a building govern their relationship?

With a written agreement, signed before the purchase. In co-ownership without an agreement, local law applies. In Romania, for example, under Article 634 of the Civil Code the shares are presumed equal unless stated otherwise, a sale or mortgage of the whole property requires all the co-owners, and each co-owner may ask for partition unless they agreed to suspend this for up to five years. In a company, the corporate law of the company's country governs its affairs, and alongside the articles a shareholders' agreement is needed.

What the investors' agreement should include:

1. Shares and investment. How much each invests, when and in which currency.
2. Decision matrix. What a manager decides, what requires a majority and what requires everyone's consent: a sale, a mortgage, the renovation budget, letting.
3. Capital calls. What happens when a partner does not pay their share on time: dilution, an interest-bearing loan or a forced sale of their share.
4. Day-to-day management. Who manages the building, the tenants and the contractors, and for what fee.
5. Deadlock. A mechanism for deciding when there is no majority.
6. Exit. Right of first refusal, drag-along and tag-along rights, and what happens on death, divorce or when a partner wants to leave.
7. Law and forum. Which law governs relations between the partners and where a dispute is heard.

When whoever organises the deal raises money from several Israelis, the Israeli Securities Law must also be checked, as it applies even when the property is abroad. Details in the guide to co-ownership in Romania, the guide to a founders' agreement and the guide to raising money from Israelis for a project abroad.

4Can you split a whole building into separate apartments and sell them?

Yes, but only under the procedure of the country of the property, and usually subject to permits and to what was built matching them. This is the stage that decides whether you can later sell units to different buyers, and whether a bank will finance them. What we know by country:

Details in the guide to registering a new house in the Romanian land book, the guide to owners' associations in Romania, the guide to title deeds in Cyprus and the guide to due diligence in Italy.

5Which permits do you need to renovate or convert a whole building?

It depends on the scope of the works and the country. In Greece, Law 4495/2017 distinguishes between minor works requiring an engineer's electronic approval, small-scale works requiring an approval (ΕΕΔΜΚ), and works with a total budget above EUR 25,000 per property or structural works, which require a full building permit. In a listed building or a protected area the requirements are stricter and further approvals are needed. In Romania you check the urban planning certificate (Certificat de Urbanism) against the zonal plan (PUZ), because a mismatch may require a new plan. In Portugal, since 1 October 2026 the deed of sale must state whether the property has a building and use permit.

The main trap is not the renovation itself but a building bought with unregularised violations, or with heritage restrictions that were not checked. So an engineer or technician acting for the buyer compares the permits with the position on site before signing. In Romania, for an old building in Bucharest, you also check the seismic risk rating. Details in the guide to renovating an old property in Athens and Thessaloniki, the guide to building permits in Romania and the guide to earthquake risk in Bucharest.

6How do you finance buying a whole building abroad?

Usually through a combination of the investors' own capital, sometimes shareholder loans, and bank financing. A local bank will assess the building as a project: permits, registration, tenants and the renovation plan, and will require a mortgage and security. In most countries an Israeli can obtain financing from a local bank, but on stricter terms than a resident. A common alternative is an all-purpose loan secured on an apartment in Israel, which is limited to 50% of the value of the mortgaged apartment. The holding structure affects financing: a bank financing a company will usually require personal guarantees and restrict a change of control. Details in the guide to a mortgage for property abroad and the guide to financing a project abroad.

7What is the tax on purchase: do you buy the building or the company that holds it?

When the building is held in a company, it is sometimes possible to buy the shares instead of the property. The main differences:

Note that many tax treaties allow the country of the property to tax gains from selling shares in a company whose value derives mainly from real estate, so a company structure does not always save tax on exit. The exit is planned at entry. Details in the guide to exiting a project: asset sale or share sale.

8What do you check before buying a whole building?

1. An up-to-date extract for the building and the land: registered owners, mortgages, attachments, third-party rights.
2. Building permits, an occupancy certificate or use permit, and consistency between what was actually built and the permit and registration.
3. The land's zoning in the plan, and what may be built or changed.
4. Heritage restrictions and pre-emption rights of authorities, for example in a listed building.
5. The existing leases, the deposits and the protections local law gives tenants.
6. Debts to the municipality, utility providers and the building committee or owners' association, if there is one.
7. Physical and engineering condition: structure, systems, and in some areas also seismic risk.
8. The seller: identity, authority to sign, spousal consent, and for a company also the authorised signatories and the absence of insolvency proceedings.
9. The restrictions on foreign buyers and the holding structure that fits them.
10. A tax calculation in both countries, on purchase, during holding and on exit.

9What should you do before signing?

In a whole-building deal, most of the important decisions are made before the preliminary agreement: the structure, the agreement between the investors, the permit plan and the financing plan. We assist Israeli investors in choosing the structure and with the agreement between them, coordinate the due diligence with lawyers, notaries and engineers licensed in the country of the property, and coordinate the Israeli side with the tax adviser.

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