SALE OF SHARES

There’s a reason most Filipino buyers steer clear of acquiring real estate through corporate share sales: it’s messy, risky, and packed with landmines.

Let’s rewind.

Before, many landowners tucked their RE assets inside holding companies—a popular tax strategy at the time. Now, with property values soaring, some of these owners are choosing to sell the shares of the company instead of the land itself. The motivation? Lower taxes.

But what looks like a clever shortcut on paper often comes with serious complications.

1.⁠ ⁠Financial Baggage

That means you’re also inheriting its financial baggage. You’ll also need to investigate the company’s books, liabilities, and compliance history. It’s like buying a used car and discovering that the manual is missing, the maintenance records are fake, and the odometer’s been tampered with.

2.⁠ ⁠Off-book Items

One of the biggest dangers in a share sale lies in "off-book" items—transactions, obligations, or penalties that never made it into the official records. Think post-dated checks that haven’t been disclosed, informal debts, handshake agreements, or surprise fines from regulatory bodies for non-filing of mandatory reports.

Even if the seller insists the company "never operated," don’t be too quick to believe it. Off-book liabilities have a nasty way of resurfacing—often long after the deal has closed.

3.⁠ ⁠Legal Recourse

Let’s say you discover something post-sale—like a hidden liability. Good luck trying to enforce accountability. The legal process in the PH is notoriously slow, and chasing after the seller could take years, with no guarantee of recovery.

That’s why most local buyers still prefer the traditional route of kaliwaan—a clean exchange of title and payment.

The Bottom Line

Buying shares of a company that owns property might seem like a tax-smart move, but it’s rarely worth the risk unless the property is extremely valuable—and even then, only with top-tier legal and accounting teams doing deep due diligence. Otherwise, it’s almost always safer (and ultimately cheaper) to buy the property outright and skip the corporate detour altogether.