Commercial Real Estate: GCC Family Office Acquires Madrid Prime Office Portfolio

Client Profile

A Kuwait-based family office with a European real estate mandate seeking to deploy €65 million into prime Madrid commercial assets generating stable euro-denominated income.

Business Challenge

The client had no existing Spanish legal or tax presence, limited familiarity with Spanish property law, and required a structure that (a) minimised Spanish withholding taxes on rental income and future capital gains, (b) provided a clean corporate governance framework acceptable to their internal investment committee, and (c) accommodated the Golden Visa residency objective for two family members.

Strategic Solution

ILS Consultancy structured the acquisition through a Spanish SOCIMI-eligible vehicle (Sociedad Anónima Cotizada de Inversión en el Mercado Inmobiliario equivalent SPV), combined with a UAE holding company accessing the UAE-Spain double tax treaty to reduce withholding tax on dividends from 19% to 5%. We managed the NIE applications, Spanish notarisation, and Land Registry processes for all three assets.

Outcome

The portfolio was acquired at an average net initial yield of 5.8%. Withholding tax on dividend distributions was reduced from 19% to 5% via treaty optimisation. Both family members received their Spanish Golden Visas within 8 months of property registration. Rental income for year one reached €3.9 million.

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