Real Estate Development & Restricted Assets
Real estate development has been a major step forward in the real estate sector as a whole. The escrow account provides greater security for the developer. Check it out!
Why Registering the Incorporation of Your Development Protects You (and Your Buyers)
Real estate development is what makes it possible to sell apartments “off-plan”—before construction is complete. Without this registration, you can only sell once the building is finished and has received its occupancy permit.
The extra guarantee: restricted assets
It is the legal separation between the construction company’s assets and the assets of that specific project. In practice: if the construction company goes bankrupt, the money and assets from that project remain protected—they are not included in the bankruptcy proceedings.
Why does this exist?
The law was enacted following the Encol case, involving a construction company that went bankrupt in the 1990s and left 40,000 families without their homes. Today, this can no longer happen in the same way.
The Benefits of Doing It Right
- Legal certainty: Buyers form a committee to monitor the construction project
- Tax reduction: a flat rate of 4% under the Special Taxation Regime (RET), instead of the standard tax rate
- More sales: a more confident buyer, an easier shopping experience
Are you planning to launch a business venture?
Tettu handles all registration related to the incorporation and the allocation of assets.