TURKS & CAICOS Law and Practice Contributed by: Oliver Chapman and Chris Smith, Griffiths & Partners Attorneys
for valuable consideration to a sibling or grandparent or grandchild; • transfers to a group company; and • transfers between trustees where no change in beneficial ownership occurs. 2.11 Legal Restrictions on Foreign Investors There are generally no restrictions on foreign ownership of real estate in the Islands, although certain formalities may apply to different types of purchasers. 3. Real Estate Finance 3.1 Financing Acquisitions of Commercial Real Estate The most typical forms of security for the financ - ing of real estate are: • legal charge; • debenture (corporates only); • legal or equitable mortgage/charge over shares in a company that holds the real prop - erty; • assignment of any rental income; • assignment of any sale contracts and/or any development contracts (usually for develop - ments); • assignment of insurance proceeds; and • guarantees from directors, shareholders, related companies or individuals. All legal charges over real property must be registered at the Land Registry, and all security interests granted should be recorded in the com - pany’s register of mortgages and charges, and recorded with the Deeds Registry.
Assignments by way of security are usually cre - ated by deed, and notice must be given to the counterparty to perfect the security. Due to the relatively small size of the Islands’ real estate market, it is generally not common to see large portfolios of real estate held by funds or investment trusts. 3.2 Typical Security Created by Commercial Investors For the most typical forms of security for the financing of real estate, see 3.1 Financing Acquisitions of Commercial Real Estate . 3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders There are no restrictions on granting security over real estate to foreign lenders. 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security Stamp duty is payable at 1% of the secured amount (with a current cap on stamp duty on security instruments of USD50,000) on deben - tures and legal or equitable mortgages, or charg - es for immovable or movable property. Where the amount of money to be advanced on the security of any property by way of mortgage is unlimited, the security is to be available for such an amount as the ad valorem duty paid thereon extends to cover. If any advance is made in excess of the amount covered by that duty, the original instrument may be stamped up with the additional ad valorem duty required to cover the total amount then to be secured. A mechanism exists to avoid double duty on separate security instruments that secure the same debt. In such cases, the ad valorem duty may be paid on the primary security instru -
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