Does the Lease of Real Estate from the Holding Company to the Operating Company Create a Risk of Veil Piercing? Limits and Best Practices

Can the Lease of Real Estate from the Holding Company to the Operating Company Characterize Commingling of Assets? Does the lease of real estate owned by the asset-holding company to the operating company authorize piercing the corporate veil? As a rule, no. Intragroup leasing is a lawful and common practice, especially in the real estate sector. The legal risk does not lie in the lease itself, but in the way it is structured and performed. Veil piercing may only occur upon concrete proof of abuse, such as commingling of assets, misuse of purpose, or sham arrangement.

In the business and real estate environment, a regular contract is not a shortcut to liability.

What is the purpose of intragroup leasing? Intragroup leasing is intended to:

• separate operational risk from real estate assets;• allow the productive use of the property by the operating business;• organize costs and revenues among the companies;• provide predictability and asset governance.

It is a legitimate instrument of business organization.

When may the lease create legal risk? The risk arises when the lease is:

• nonexistent or merely formal, without actual performance;• entered into without consideration or at artificially nominal amounts;• paid irregularly or not paid at all;• mixed with the shareholders’ personal expenses;• used to strip assets or defraud creditors.

In these cases, the lease may be disregarded as a sham arrangement.

Does the absence of a written agreement automatically constitute abuse?Not automatically, but it weakens the structure.

The absence of a written agreement:

• does not presume fraud;• however, it makes it more difficult to prove asset segregation;• increases the risk of challenges in enforcement proceedings.

Contractual formalization is an element of legal protection, not mere bureaucracy.

May the rental amount be challenged?Yes, in specific circumstances.

The rent:

• must be compatible with market values;• may be adjusted according to objective criteria;• must not be artificially reduced or inflated for purposes of concealing assets.

Distorted amounts may indicate misuse of purpose if associated with other signs.

Does non-payment of rent characterize commingling of assets?Not by itself.

Non-payment:

• is part of contractual risk;• must be treated as an ordinary obligation;• does not authorize an automatic presumption of commingling.

The risk arises where there is systematic tolerance without records, absence of collection, or informal offsets.

May the lease be used as an unlawful shield?Not when it is legitimate.

The lease:

• is not a shield in itself;• does not prevent enforcement against the operating company;• does not automatically transfer debts to the holding company.

Only abusive use of the legal form may be challenged in court.

Is a specific proceeding required in order to reach the holding company?Yes.

In order to reach the holding company by reason of the lease, it is indispensable to:

• initiate the proper proceeding, such as veil-piercing proceedings;• ensure due process and full defense;• prove commingling of assets or misuse of purpose;• provide individualized reasoning in the decision.

The direct inclusion of the holding company is legally null.

Is judicial review rigorous in these cases?Yes.

The Judiciary tends to:

• distinguish legitimate leasing from sham arrangements;• require robust proof of abuse;• preserve lawful asset structures;• prevent the trivialization of veil piercing.

Judicial review operates as a technical filter against generalizations.

Conclusion: intragroup leasing is lawful when structured with technical care The lease of real estate from the holding company to the operating company:

• is a legitimate and common practice;• does not give rise to automatic veil piercing;• requires formalization and coherent performance;• may only be challenged upon concrete proof of abuse;• is part of a lawful asset-organization technique.

In Business Law as applied to Real Estate, the problem is not leasing — it is pretending that there was a lease.

Ferreira Advocacia acts with technical rigor in matters involving asset-holding companies, intragroup leases, real estate governance, complex enforcement proceedings, and veil piercing, offering precise and strategic legal analysis.