Many UK investors have started to explore the benefits of buying overseas investment properties through a UK company, partly due to the stamp duty surcharges for second homes in the UK and the added complications being introduced under the legislation of the Renters’ Rights Act.

Dubai has become a property investment hotspot in recent years owing to the potential tax efficiencies and strong rental demand. If you are considering investing in overseas property, there are lots of additional processes compared to buying property in the UK. Tax rule obligations and the landlord laws in the country you are investing in will be important considerations before deciding which location to buy a property.

There will also be lots of paperwork to complete and documentation to provide in the required formats. If you are looking to buy an overseas property through a UK company, getting your paperwork ready before entering the stage of submitting an offer on a property will help to ensure that you do not encounter obstacles in your property investment purchase.

Buying through a UK company rather than as an individual will generally require more evidential documents to prove the company has been properly registered and where the purchase funds have been sourced. Before you get to the stage of putting in an offer, you may be asked by solicitors, banks or developers to provide sets of documents.

These often include:

• Companies House records 
• Certificate of Incorporation
• Articles of Association
• Register of directors and people with significant control
• Board resolution that authorises the property purchase
• ID such as passports

In addition to these documents, you will usually need to provide company bank statements and copies of the business accounts.

Many mortgage lenders also assess affordability through the projected rental income as a percentage of the monthly mortgage payment. For example, it is common for lenders to request that monthly rental income covers 125% to 150% of the mortgage payment. To provide evidence of this, you might be required to provide an estimated rental income from an estate agent based on the local rental market.

Why These Documents are Required

Banks and solicitors are required to perform anti-money laundering checks to ensure that funds for purchasing a property have been obtained through legitimate means, so providing the required documentation is essential to demonstrate legal compliance.

If you are taking out a mortgage to finance your overseas property purchase, the lender will perform due diligence to check that the company is likely to be able to afford the mortgage repayments, which will be demonstrated by stable income through the accounts records.

Certification, Notarisation and Apostille Requirements

It is common for UK companies buying overseas property to be requested to have their documents officially translated into local language, have them certified by a solicitor or legalised with an apostille.

You can use UK document legalisation services to provide an apostille to legalise your documents such as your Certificate of Incorporation. These services can also confirm the requirements for the specific country that you are purchasing property in. For example, for countries that are not Hague Apostille Convention members, you will usually also require embassy attestation.

By instructing an apostille service, they will take care of all the processes involved in legalising documents through the required authorities. It is also advisable to use services who provide swift turnarounds. For example, services offering an e-apostille can send the pdf document directly to the required recipient by email, whereas some apostille services may send documents by post, taking weeks longer.

Next Steps 

Once you have gathered all your documents and arranged apostilles where required, you will then be in the position to move ahead with your property purchase. Your solicitor should help you to comply with processes such as paying local property tax or registration fees, depending on the rules that apply in the country you are buying property in. 

Conclusion: Avoid Costly Delays with Document Preparation

For many investors, setting up as a UK company and investing in overseas property delivers considerable advantages over investing in the UK, especially in areas where there is high rental demand and good rental yields.

Making sure that you have followed all of the necessary steps in preparing documentation will help to ensure that your property purchase does not fall through, as delays can be costly. Therefore, it is important to identify all of the documents that you will be required to provide to your solicitor, lender or property developer and determine whether the documents must be legalised.