Best Company Type to Go For in Buying House Overseas - Advice Please!! 29 June 2020 at 5:33PM in Small Biz MoneySaving 10 replies 81 views

Flakjack

Hi Guys, 
My Dad, Brother and I are talking of collectively buying a small property in Bulgaria to run as a retreat space, offering tailored getaways centred around a few days of rural living, open fires, traditional food, enjoying the beautiful mountains and less 'rat race' pace of life (yoga, photography, cycling, hiking etc.). 

So far it looks like it may be worth setting up a business in Bulgaria to purchase the property and help avoid any Brexit complications, as well as to pay for Bulgarian staff such as cleaners and builders etc. 

Whilst we've got much more research to do, what would you guys suggest about the UK side of things? Should we be setting up a separate company in the UK? If so, what type of company would work best, classic Limited Company by Shares?

My Dad is getting on a bit now and he's due a spinal operation soon, he's slightly concerned that he could be left having to pay care costs that would suck his share in our venture out to cover them, is there any type of company formation or 'trust' that could be used to put his mind at rest? Obviously my brother and I love our Dad dearly and would do everything we could to care for him!

Thanks for your help!

Annisele

What will "the UK side of things" consist of?

If you mean that you want to get money out of Bulgaria and into your pocket in the UK in the most tax- and cost-efficient manner possible, that's one kind of question.

If you mean you'll be doing a bunch of marketing work in the UK, and you want to know how to employ and pay the people doing the marketing, that's another kind of question entirely.

Those are not the only two possibilities.

I know absolutely nothing about the law in Bulgaria, so I can't comment on the rest of it. But I do wonder if this is the best time to be setting up a tourism business....

Savvy_Sue

Annisele said:

I know absolutely nothing about the law in Bulgaria, so I can't comment on the rest of it. But I do wonder if this is the best time to be setting up a tourism business....

+ 1 to that ... and if determined and with the right kind of experience, I'd look at doing so in the UK, because I think the appetite for green-ness and well-ness is there. The only downside is our weather ... 

I'd also question what your experience of living and working in Bulgaria is. I've got friends living in Hungary where one half of the couple grew up there, and other friends living in France who've been there over 20 years, and I know that in both cases it's been really hard to get to grips with the way things are done, especially in relation to running a business. Even with a really strong grasp of the language, it's been a struggle to do that! 

Flakjack

Savvy_Sue said:

Annisele said:

I know absolutely nothing about the law in Bulgaria, so I can't comment on the rest of it. But I do wonder if this is the best time to be setting up a tourism business....

+ 1 to that ... and if determined and with the right kind of experience, I'd look at doing so in the UK, because I think the appetite for green-ness and well-ness is there. The only downside is our weather ... 

I'd also question what your experience of living and working in Bulgaria is. I've got friends living in Hungary where one half of the couple grew up there, and other friends living in France who've been there over 20 years, and I know that in both cases it's been really hard to get to grips with the way things are done, especially in relation to running a business. Even with a really strong grasp of the language, it's been a struggle to do that! 

We're not particularly worried about this, we're all pretty adventurous, international people and part of the draw for us is the difference in doing things, which is also the selling point for the retreats, things are no-doubt very different from the UK.

@Annisele - Moving money out of the business is less of a concern, we all see this as a long-term investment project and none of us have the intention to draw a salary for at least 5 years. What I do want to do, however, is ensure some form of protection for my Dad in case anything does happen that would leave him compromised (we have a history of dementia in the family and he is due a delicate operation too). He just doesn't want to see his stake in this hoovered up to pay for care should the worst happen. 

martindow

Going back to Bulgaria, do any of you have any knowledge about the country and a very good command of the language?  If not you are going to be reliant on and have a lot of trust in people who do to negotiate and deal with local laws and beaurocracy, etc.  Unless you are fully aware of the regulations and expenses involved it is going to be very difficult to know if this would be a viable plan.

Annisele

I don't think the small business board is the best place for questions about how to make sure the taxpayer rather than your dad pays for any potential care he might need. You might be better off on the benefits or over 50s boards for that.

But if your dad really wants to keep hold of his money, investing it into a high risk venture probably isn't the wisest plan. I suspect your perspective is that your venture isn't all that high risk - but it'll be a new business, and from a diversification perspective alone it'd be high risk for your dad to put more than a small proportion of his savings into it.

Flakjack

Annisele said:

I don't think the small business board is the best place for questions about how to make sure the taxpayer rather than your dad pays for any potential care he might need. You might be better off on the benefits or over 50s boards for that.

But if your dad really wants to keep hold of his money, investing it into a high risk venture probably isn't the wisest plan. I suspect your perspective is that your venture isn't all that high risk - but it'll be a new business, and from a diversification perspective alone it'd be high risk for your dad to put more than a small proportion of his savings into it.

Hi Annisele, 
Don't get me wrong, this would absolutely be a high-risk venture and capital-wise, none of us would be putting substantial amounts of our savings or income into this, it's essentially a bit of a fun side-project and ultimately, at the very worst, gives us all somewhere to holiday for the next few years. My brother and I both run our own businesses, mine in the UK, his in China & Mexico. 
Ultimately, I think my Dad is overly concerned and should push come to shove, my brother and I would be able to comfortably look after my Dad through almost any period of ill health, however, the concerns here are his and he has spoken of placing the business into trust to provide some protection for his stake (something I'm personally not inclined to do). 
My current feelings are to say 'don't worry about it, we'll sort you out, get stuck into this business and enjoy it', however, I was looking for a bit of an MSE consensus first, as well as an experienced viewpoint on anyone who has run businesses across the UK and BG. 
In terms of the business model itself, we're literally at 'chat around the table phase here', we haven't even committed a business plan to paper yet but if we go ahead we'd be approaching it professionally and properly supported by translators, UK based legal and plenty of market research. 

   

Mistral001

If I have got this right, OP sees his propoasal  as a possible way of putting his father's money offshore to increases his chances of getting free care and at the same time providing the OP  and his brother with capital to start a business.  And if the business does not work out very well they will have a free holiday home.  A win, win, win  situation you would think?  The father does not see it that way and wants to be cautious.  The OP's father is a wise man, in my view, as many things could go wrong along the way.

martindow

Flakjack said:

Ultimately, I think my Dad is overly concerned and should push come to shove, my brother and I would be able to comfortably look after my Dad through almost any period of ill health, however, the concerns here are his

   

Don't under-estimate what the future care needs could be.  It doesn't happen to everyone of course but some people end up needing quite intense 24 hour care and even with two of you that could be impossible.

Flakjack

Mistral001 said:

If I have got this right, OP sees his propoasal  as a possible way of putting his father's money offshore to increases his chances of getting free care and at the same time providing the OP  and his brother with capital to start a business.  And if the business does not work out very well they will have a free holiday home.  A win, win, win  situation you would think?  The father does not see it that way and wants to be cautious.  The OP's father is a wise man, in my view, as many things could go wrong along the way.

Strewth, well I can safely say that you do not see things right at all! 
Maybe my fault for trying to write a concise post rather than go into detail. All three of us have led lives where we've traveled the world, had a bit of fun and followed passions, more than anything else. We've all done fairly well money-wise, moreso out of some very lucky investments, never really owning much and a lack of spending than anything else. 
We were having a talk a few weeks ago about doing something fun together as a family as my Dad is shortly retiring and the collective dream of doing up an old farmhouse and running an off-grid retreat or even building an earthship got brought up. My Dad has chosen relative off-grid living for some time now (he lives on a canal boat) and each of us has a skillset, connections and access to a customer base that could make a business of this type quite compelling - I own a photography company and have spent years working with these types of organisations. 
A few weeks later and it's a Whatsapp group and a spreadsheet of potential properties, projected costs and ideas.
My Dad lost his parents to dementia, as did my partner. Halfway through this set of conversations, my Dad says 'guys, what happens if that happens to me too - does that screw our business, is there anything we can do?' To which we said 'Don't worry Dad, we'll work it out' - cue post on here.
I came on here to ask one thing, with the outward chance that it might happen:
"What's the best company formation for this type of arrangement ideally one in which its assets are safe in the event of the failing health of one director.?" 








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Flakjack

martindow said:

Flakjack said:

Ultimately, I think my Dad is overly concerned and should push come to shove, my brother and I would be able to comfortably look after my Dad through almost any period of ill health, however, the concerns here are his

   

Don't under-estimate what the future care needs could be.  It doesn't happen to everyone of course but some people end up needing quite intense 24 hour care and even with two of you that could be impossible.

Thanks Martin, 
Sadly, we've done this enough times to know the costs emotionally and financially, which is a big motivation for not wanting to go through it again.