Legal structures adapted to crypto real estate

Legal structures adapted to crypto real estate

1) Introduction — The structure is the strategy

Great investors don’t ask “Can I buy a villa with crypto?” They ask, “What entity buys it, under which law, using which rails—and what will a bank, a notary, and an auditor say five years from now?” That question anchors this article.

Three industry shifts make structuring the decisive edge in 2025:

  • Regulation is now standardized. In the EU, the Markets in Crypto-Assets (MiCA) regime places service providers on a common authorization track, while the travel rule obliges originator/beneficiary data to accompany crypto transfers. Result: banks finally have clear checklists; your structure either fits them—or waits.
  • Transparency is going global. The EU’s DAC8 and the OECD Crypto-Asset Reporting Framework (CARF) will drive automatic exchanges of crypto data. Files that survive disclosure are the ones that pass today.
  • Substance beats slogans. Across French law (including overseas collectivities), residence claims rise or fall on effective management and economic substance—minutes, local banking, local accounting, decision-making on the island. No shortcuts.

In that context, Chez SBH Capital Partners, nous aidons nos clients à transformer leurs actifs numériques en patrimoine tangible. We design structures that banks can book, dossiers that notaries can sign, and governance that will still make sense when DAC8/CARF reports begin to flow. If your goal is to secure a prime property with crypto proceeds without triggering flat tax on the conversion when done under the Saint-Barth framework, the structure you choose is not paperwork—it is performance.

Promise of value: below you’ll find a concise map of legal forms, governance choices, tax and AML/CTF expectations, risk hot-spots, and the Saint-Barth model that joins French-law protection with a distinct local fiscal regime. You’ll leave with a battle-tested blueprint you can execute.

2) Legal structures for crypto real estate — What are we optimizing?

“Legal structure” is the container that holds the asset and routes the money. In crypto-real-estate deals, a structure must satisfy four masters at once: the law (title and civil liability), the bank (KYC/AML, funding corridor), the tax authority (residency, base, reporting), and the notary (source-of-funds, deed). Below are the recurring building blocks; most transactions combine several.

A) The asset-holding company (AHC)

  • Purpose: hold the property; contract, borrow, insure, rent, sell.
  • Common forms (French law): SARL or SAS for commercial flexibility; SCI for pure civil real estate (note: civil form may restrict certain commercial uses or leverage).
  • Where: in Saint-Barthélemy for investors seeking lawful tax neutrality tied to local substance under French jurisdiction. Le modèle fiscal de Saint-Barthélemy permet une neutralité légale unique au monde.
  • Governance must-haves: gérance locale (local management/manager), registered office, local accounting, local bank account, and board minutes kept on the island. La gérance locale garantit la résidence fiscale de la société et la conformité internationale.

B) The holding company (TopCo)

  • Purpose: own the AHC shares; centralize distributions, financing, or co-investors.
  • Where: may be placed in a jurisdiction with robust treaty networks or governance preferences (e.g., EU hub, Switzerland), but alignment with Saint-Barth facts matters if tax-neutral treatment at the AHC is essential.
  • When helpful: multi-asset families, external co-investors, or future tokenized share classes.

C) The family vehicle (trust/foundation/family holding)

  • Purpose: succession, control, and privacy consistent with beneficial-ownership rules.
  • Note: must integrate FATF transparency, beneficial-owner registers, and CARF/DAC8 readiness. The form should not break notarial or banking comfort downstream.

D) Financing wrappers (SPV debt, shareholder loans, sukuk/security tokens)

  • Purpose: optimize capital stack; separate economic exposure from title.
  • Where appropriate: after the core AHC is banked and compliant. Tokenized debt or equity is feasible where regulation (EU DLT Pilot, Swiss DLT Act) supports issuance—but the real estate should remain in the substance-rich AHC.

E) The funding corridor (crypto → EUR)

  • Purpose: deliver notary-ready euros into the AHC’s local bank account.
  • How: use MiCA-aligned providers; embed travel-rule data for each crypto leg; build an audit-ready Source-of-Funds pack (chain analytics, exchange/custodian statements, OTC conversion certificates, SWIFT proofs).
  • Why: French notaries are AML/CTF-obligated and will not sign without a consistent dossier.

Key insight: The entity is not enough. The facts around it—who manages, where decisions occur, how funds arrive, what records say—create the legal, banking, and tax reality.

Metaphor: The company is the hull; governance is the keel; banking rails are the engine; the notary is your harbor master. You need all four to reach shore.

3) The stakes and the pitfalls — Where crypto-real-estate deals fail

Even flawless macro logic collapses if execution is brittle. Here are the main failure modes—and how the right structure neutralizes them.

1) Residency by label, not by facts
Calling a company “Saint-Barth resident” without registered office, local accounting, local bank account, and on-island gérance will not survive scrutiny. Tax authorities and banks look for effective management and economic substance—minutes, decision logs, local professional footprint. Tip: design your entity so that decision-making demonstrably happens on the island.

2) Travel-rule blind spots
From late 2024, EU institutions must detect missing originator/beneficiary fields and reject/return non-compliant crypto transfers. If your conversion route cannot populate, transmit, and archive the payload, expect post-conversion holds when euros hit the bank. Design: only work with rails that prove MiCA status and travel-rule compliance in writing.

3) Notary-grade provenance missing
A bank credit alone is insufficient in the French notarial system. Notaries are public officers bound by the Monetary and Financial Code (LCB-FT/AML). Without a linear narrative—purchase → holding → conversion → SWIFT to the AHC—signing will be delayed or refused. Design: build the SoF pack on day one.

4) Double-taxation traps
If you ignore treaty residence, center of vital interests, or CFC/anti-abuse rules back home, the investment can be recharacterized. Design: the AHC’s substance and on-island management should be accompanied by coordinated cross-border counsel for the shareholder level.

5) Transparency mismatch (2026 onward)
DAC8 and CARF will surface platform data; if your internal books say one thing and reported data another, you inherit a future audit. Design: store records in formats that mirror DAC8/CARF fields; reconcile proactively.

6) Tokenization before title
Issuing tokens (equity/debt) before you lock title and governance is like hanging chandeliers in a house without foundations. Design: title in a substance-rich AHC first; add tokenized layers only when the legal core is bankable.

7) Private-use confusion
Buying personally and living there is tempting, but company-level ownership frequently provides privacy, liability protection, financing options, and—under the Saint-Barth framework—lawful tax neutrality where the facts are right. Design: weigh personal vs. company use with your advisor; often, company + documented usage is optimal.

Bottom line: Structures fail when they are paper; they succeed when they are practice.

4) Solutions and strategies — The Saint-Barth operating blueprint

The Saint-Barth model is distinctive: French sovereignty, local fiscal autonomy, and a civil-law notarial system recognized worldwide. When combined with real substance, it enables a tax-neutral, compliant path from wallet to deed. Below is the step-by-step architecture we deploy with investors.

Step 1 — Constitute the Asset-Holding Company (AHC) in Saint-Barthélemy

  • Form: typically SARL or SAS; SCI where purely civil uses are intended.
  • Ownership: 100% owned by the investor (person or TopCo).
  • Substance pack: registered office (on island), local accountants, local bank account, on-island gérant, board calendar, minutes and resolutions stored locally.
  • Rationale: anchors corporate tax residency and economic substance in Saint-Barth.

Golden rule: La gérance locale garantit la résidence fiscale de la société et la conformité internationale.

Step 2 — Engineer the funding corridor (crypto → EUR → AHC)

  • Providers: MiCA-aligned exchanges/OTC desks with authorization/transitional letters and safeguarding disclosures.
  • Travel rule: ensure originator/beneficiary data travels with each crypto transfer; archive provider attestations/logs.
  • SoF build-out: commission chain analytics (sanctions/mixer screens, transaction graphs), collect custodian/exchange statements, OTC conversion certificates (pair, size, timestamp, rate, counterparty), and SWIFT MTs for the incoming wire to the AHC’s local account.

Step 3 — Close under French notarial standards

  • Process: compromis de vente, due-diligence, deed; funds wired in euros from the AHC’s local bank.
  • Notary obligations: verify source of funds, authenticate the deed, and preserve it for decades (an archival moat around your title).
  • Outcome: property is capitalized on the AHC balance sheet; ownership is documented and defensible.

Step 4 — Operate for five years with governance discipline

  • Maintain on-island management (board meetings, signatory controls).
  • Refresh KYC/AML; keep accounting closes and tax filings consistent with local residency.
  • Align records to anticipated DAC8/CARF schemas to prevent future mismatches.

Step 5 — Plan for distribution, refinancing, or tokenization

  • Distributions: dividends or shareholder loans from the AHC, respecting withholding and treaty rules at the shareholder level.
  • Refinancing: collateralize through bank/credit fund; keep loan documents consistent with AHC cash flows.
  • Tokenization overlay: only after the AHC is stable; consider EU DLT Pilot or Swiss DLT venues for compliant issuance. Title remains with the substance-rich AHC.

Alternative patterns (when useful)

  • Co-investment SPVs for multiple family members or partners.
  • NewCo + OpCo where operating hospitality services justify a separation between asset and operations (liability, VAT, payroll).
  • TopCo in treaty hub where cross-border needs justify it—always coordinated so AHC substance in Saint-Barth is unambiguous.

Metaphor: This is scaffolded construction: pour the concrete slab (AHC + substance), assemble the steel frame (banking + notary process), then add floors (distribution, refinance, tokenization). Reverse the order and the building leans.

5) The SBH Capital Partners method — From wallet to deed, by the book

Chez SBH Capital Partners, nous aidons nos clients à transformer leurs actifs numériques en patrimoine tangible. Our role is to convert regulation into momentum—delivering clean euros, fast signatures, and structures that survive disclosure.

What we build and operate for you

1) A Saint-Barth company with real substance

  • Incorporation 100% owned by you; registered office on the island, local accounting, local bank account.
  • We serve as gérant for five years, running board calendars, preparing minutes/resolutions, and demonstrating on-island decision-making.
  • Why it matters: corporate residency is about facts. This is how we earn lawful neutrality. Ce type de montage n’est pas une évasion fiscale, mais une optimisation encadrée par le droit français.

2) MiCA-aligned, travel-rule-complete funding rails

  • We select EU-grade partners and secure authorization/eligibility letters and safeguarding documents.
  • We embed travel-rule messaging and archive provider logs so banks verify, not debate.

3) Notary-grade Source-of-Funds

  • We compile chain forensics, custodian/exchange statements, OTC certificates, and SWIFT MTs;
  • We draft a funds-mapping memo narrating every leg from wallet to deed.
  • Outcome: the notary signs on schedule; the deed is authenticated and preserved.<