Transfer Pricing for Real Estate & Infrastructure
We provide transfer pricing consulting for real estate developers, infrastructure groups, engineering businesses, project SPVs and related financing entities operating across India and overseas.
Project-based structures create project-based transactions
Real estate and infrastructure groups in India need SPV-level transfer pricing documentation covering project management fees under CPM, intercompany project financing rates under CUP, and development-rights transfers between related entities.
Transfer pricing for real estate and infrastructure in India can involve a dense network of project companies, holding entities, developers, engineering affiliates and financing vehicles. Each SPV may enter into related-party contracts for project management, construction support, design, funding, guarantees, facilities management or brand use.
These arrangements require separate analysis because project economics vary by land value, location, development stage, regulatory approvals, construction risk and expected cash flows. A group-wide margin or single financing rate may not reflect the commercial position of every project entity.
Typical real estate and infrastructure structure
A project SPV receives development, construction or project-management services from a related developer, financing from a group NBFC or holding company, and engineering or design services from a foreign affiliate.
Each material transaction should be supported by a dedicated transfer pricing benchmarking study and clear intercompany documentation.
Where transfer pricing applies in real estate and infrastructure
Project groups commonly have related-party transactions involving services, funding, land or development rights, engineering and property operations.
Project Management Contracts
Project management fee transfer pricing may cover construction oversight, procurement coordination, contractor management, budgeting, scheduling, approvals and project reporting provided by a related developer or management entity.
Development Rights Transfers
Related entities may transfer land parcels, development rights, floor-area rights or project interests between SPVs. Pricing should be supported by independent valuation, project-stage analysis and the rights and obligations transferred.
Intercompany Financing
SPV intercompany financing in India may include shareholder loans, bridge funding, guarantees, debentures or other project finance. Interest rates should reflect project risk, security, tenure, cash-flow profile and borrower credit quality.
Engineering and Design Fees
Foreign or domestic group affiliates may provide architectural, structural, civil, mechanical, electrical or specialist engineering services. The fee should reflect technical capability, project scope, responsibility and the level of risk assumed.
Facilities Management
Completed projects may receive property management, maintenance, security, leasing, utilities or common-area services from related entities. Charges should be supported by a clear cost base and allocation key linked to actual usage.
Brand Licensing
Residential, commercial, hospitality or mixed-use projects may use a recognised group brand or operating concept. The royalty should reflect the rights granted, territory, project positioning and local marketing responsibilities.
How real estate and infrastructure transactions are benchmarked
Method selection depends on the transaction, project structure, reliable comparable data and the functions, assets and risks of the participating entities.
Cost Plus Method
CPM may be appropriate for project management, construction support, engineering and routine development services where a reliable cost base and comparable gross mark-up can be identified.
CUP Method
CUP is commonly considered for intercompany financing, guarantees, property-related charges and other transactions where comparable third-party rates or contracts are available.
TNMM
TNMM may be used for engineering, design, facilities management or routine support entities where reliable transaction-level gross margins are not available.
Valuation-Based Analysis
Development-rights, land, project interests and other unique assets may require independent valuation using market, income or cost approaches alongside transfer pricing analysis.
SPV-by-SPV documentation instead of one group-wide file
We begin by preparing a transaction inventory for each project SPV, identifying all related-party service, financing, guarantee, land, development-right and licensing arrangements.
We then review the project stage, risk allocation, funding terms, service scope and economic contribution of each related entity. Project management fees and engineering charges are tested against suitable comparables, while financing terms are reviewed using market-based loan and credit data.
The final position is documented at SPV level so intercompany agreements, accounting entries, Form 3CEB disclosures and transfer pricing files all reflect the actual economics of the relevant project.
SPV-Level Mapping
Complete transaction inventory across project, holding, development, engineering and financing entities.
Financing Rate Benchmarking
Market-based analysis of intercompany loans, guarantees and other project-funding arrangements.
Project Fee Benchmarking
Comparable construction, engineering and project-management fee analysis based on the actual service scope.
Group Structuring Advisory
Transfer-pricing-aware service, ownership and financing models for new projects and SPVs.
Our real estate and infrastructure transfer pricing services
We support developers and infrastructure groups with pricing analysis, annual compliance, project structuring and dispute prevention.
Benchmarking Study
Economic analysis of project-management fees, engineering charges, financing rates, guarantee fees and other project-level transactions.
TP Documentation and Form 3CEB
SPV-level Local File preparation and accountant-report coordination for service, financing, land, development-right and licensing transactions.
Financing Structuring
Interest-rate, guarantee-fee and funding-term analysis aligned with the project stage, cash-flow profile and borrower risk.
Learn more about our international taxation services .
Audit and Litigation Support
Technical submissions and representation support for project-fee, financing, valuation and multi-SPV transfer pricing disputes.
Real estate and infrastructure transfer pricing questions
Running a multi-SPV real estate or infrastructure group?
Get your project fees, financing rates and related-party transaction structure reviewed by our transfer pricing team.
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