Investment structure
Choosing the ownership and funding structure before acquisition, so control, risk and exit stay workable.
The decision this page helps you make
What vehicle holds the asset, how partners and funders sit within it, and how the exit will work.
Structure decisions are cheap before acquisition and expensive afterwards. The vehicle that holds the land determines how equity is admitted, how debt is secured, how profits are distributed and what an exit looks like — whether that exit is unit sales, an asset sale or a share sale.
The commercial questions come first: who controls decisions, what happens if a partner cannot fund a call, and how deadlock is resolved. These belong in the shareholders' agreement, not in a later negotiation when positions have hardened.
The tax treatment of each route differs and depends on the parties, their residence and the asset. This site does not model tax outcomes: the structure should be reviewed by a Portuguese lawyer and tax adviser for your specific case before the first contract is signed.
What you are deciding
- Direct ownership versus a project vehicle, and whether one vehicle per project.
- Equity terms: contributions, dilution, preferred returns and distribution waterfall.
- Control: reserved matters, board composition, deadlock and step-in rights.
- Funding mix: sponsor equity, co-investment, development finance and any mezzanine layer.
- Exit route, and the structure that route requires from the outset.
How to proceed
- Agree the commercial deal in a term sheet before drafting begins.
- Confirm who signs, who controls and who funds, in writing.
- Take Portuguese legal and tax advice on the proposed structure before acquisition.
- Incorporate the vehicle and open banking before the promissory contract if possible.
- Document the shareholders' agreement alongside the acquisition, not after.
- Align finance documents, security package and the exit assumption.
Documents you will need
- Term sheet or heads of terms covering economics and control.
- Company incorporation documents and beneficial ownership registration.
- Shareholders' or joint-venture agreement.
- Finance term sheet and security documents.
- Tax advice memorandum for the chosen structure.
Checklist
- Every party's contribution and return defined numerically.
- Failure-to-fund and deadlock mechanisms drafted.
- Reserved matters list agreed before the vehicle is used.
- Beneficial ownership and compliance registrations completed.
- Banking, accounting and reporting arrangements operational before drawdown.
- Exit route tested against the structure chosen.
- Tax position confirmed by an adviser for each participant's circumstances.
Risks and how to handle them
Acquiring first and structuring later.
How to handle it: Fix the structure before the promissory contract; restructuring after acquisition is costly.
Undocumented partner expectations about control or distributions.
How to handle it: Convert every expectation into a written term before funds move.
A structure that works during development but blocks the intended exit.
How to handle it: Model the exit at the outset and design the vehicle to support it.
Assuming a tax outcome that depends on facts not yet established.
How to handle it: Obtain written tax advice for the specific parties and asset before relying on it.
Questions people ask
- Do I need a Portuguese company to develop in Portugal?
- Not necessarily, but a Portuguese vehicle is common because it simplifies contracting, licensing, finance and VAT administration. The right answer depends on your investors and funding, and should be advised on before acquisition.
- One company per project or one for everything?
- Ring-fencing each project is common where projects have different partners or funders. A single vehicle can be simpler administratively but concentrates risk. It is a commercial and tax question, not a formality.
- Can foreign investors own Portuguese development companies?
- Foreign ownership is generally possible, subject to identification, tax registration and compliance requirements. Confirm the specific requirements for your jurisdiction and structure with a Portuguese lawyer.
- When should the shareholders' agreement be signed?
- Before capital is deployed. Negotiating governance after money is in the vehicle removes most of your leverage.
General guidance for planning decisions. It is not legal, tax or planning advice for a specific site.