How a private club pays its way

Picture, as an illustration, the third owners' meeting at a high-end coastal community in Brazil. The restaurant is full on Saturdays, dues have risen twice, and the books are still in the red. A third of the families never joined the association that runs the club, so the members who pay are carrying the ones who do not.

The scene is invented; the mechanism is not. In 2023, Aman published the Aman Club Founder Information document, listing a US$200,000 initiation fee and annual dues of US$15,000 per club. The same document defines membership as non-equity: revocable and personal, with no ownership stake, no vote and no property interest in the facilities. Whoever pays the fee buys access to a selected community, not an asset to resell.

The figures serve only as an order of magnitude, and Aman may revise them. The initiation fee buys the way in. Only well-sized annual dues buy the following year.

The initiation fee pays for selection; annual dues pay for operations

Under the Aman agreement, the initiation fee is nonrefundable and the dues may change at the operator's discretion. A membership cannot be pledged as collateral, resold or divided. It transfers only on death or, under conditions, on resignation, which requires 90 days' notice, takes effect on December 31 and does not waive amounts already due.

This design separates two roles that immature projects blend. The fee is a one-off payment that funds formation, facilities and reserves. The dues are the flow that keeps the doors open. Once the fee starts covering running costs, the club eats its own capital and comes to depend on new admissions to close the month.

The damage shows up in the admissions committee. A club that needs fees to meet payroll approves candidates it would turn down with healthy books. That is why a sound budget keeps two ledgers: fees for investment and replacement reserves, dues for the full operating cost, with a cushion.

Scarcity is real only when the membership cap is written down

The US tax authority requires tax-exempt social clubs to show that membership is limited and members have an opportunity for personal contact, with the club supported by membership fees, dues and assessments. It is a US tax rule, yet it captures an operating truth. A club with no cap is a leisure facility with a turnstile, not a community.

The cap comes from physical capacity: how many families the restaurant, the marina or the courts can serve at peak without queues. The Yellowstone Club, in Big Sky, Montana, presents itself as a members-only mountain retreat spanning 15,200 acres of private skiing, golf and amenities. The scale of the land backs the promise of exclusive use.

The right sequence runs against instinct. Measure capacity at peak first, then set the cap with a margin, and only then price the fee and the dues. Starting from the revenue target and squeezing in members until it is met leads to overcrowding, which erodes the value of membership from within.

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The guest is a way in, as long as there is a ceiling

The hybrid model we use as a reference has three tiers. Resident members own property in the development. Club members join by invitation, without having to own property. Temporary guests experience the place before any invitation. Moving up a tier is a deliberate committee decision.

The same US rule offers a yardstick for sizing the third tier. A tax-exempt club may receive up to 35 percent of its gross receipts from nonmember sources, investment income included. Within that amount, no more than 15 percent of gross receipts may come from nonmember use of the facilities. Brazil imposes no such ratio, but the discipline holds: if guest revenue grows without limit, the club ends up serving the public rather than its members.

Under the Aman agreement, members answer for their guests' charges and conduct, and guests must be accompanied by the member at all times. Rules like these make a guest an observed candidate, not a walk-in customer.

Exclusivity that is not written into bylaws, a condominium charter or the property register is only a commercial intention.

The legal vehicle decides who governs, who pays and who leaves

In Brazil, a club starts with the choice of vehicle. The first route is a nonprofit association, which the Civil Code defines as people uniting for non-economic purposes. The provision that matters most is Article 54. On pain of nullity, the bylaws must set out admission and expulsion, members' rights, sources of funding and how accounts are approved. Whatever the committee plans to do must be written before the first member joins.

The same chapter holds constraints that surprise anyone importing a US contract. Membership is not transferable unless the bylaws say otherwise, and buying an equity share does not make the buyer a member. Expelling someone requires just cause, with a right of defense and appeal. On the other hand, the bylaws may create membership classes with special privileges, which accommodates the tiers.

The second route is a condominium, either of buildings or of plots, in which owners hold the common areas and a charter sets contributions and sanctions. The third is an operating company, close to the Aman model, in which membership is a contract of use. Each answers the heading's questions differently, so the choice precedes any price list.

No one can be forced to join, and the project must be born knowing it

Brazil's Federal Constitution states, in Article 5, that no one may be compelled to join or to remain in an association. The effect is financial: a contribution cannot be presumed from someone who never joined, which is exactly where the opening scene comes from.

The Supreme Federal Court settled the point in binding precedent Theme 492. An association could not charge maintenance fees to non-member owners before Law 13.465/2017, or an earlier municipal law on the subject. After it, contributions in controlled-access subdivisions are possible in two cases. Existing owners must sign up to the founding instrument; new buyers are bound if the obligation is already recorded in the Property Registry.

The urban land subdivision law created that controlled-access subdivision, regulated by the municipality and barred from blocking identified pedestrians and drivers. Two consequences follow. The duty to contribute must be recorded at launch, not after the first default. And the club's exclusivity must rest on its own areas and rules, not on closing streets that the law keeps open.

Programming turns annual dues into retention

Dues get renewed when members feel they use the club. Our reference calendar has two light weekly gatherings, one intense monthly event and four anchor events a year, ranging from culture and sport to food and legacy.

The mechanism is retention. Every family that fails to renew takes its dues out of the budget and, with no waiting list, leaves an empty seat. Programming needs its own budget, a named owner and three metrics: participation per family, renewal by entry cohort and the size of the waiting list. When the list shrinks, the warning arrives before revenue falls.

Tax, data and accounts belong in the design, before opening day

Tax treatment depends on the vehicle. Law 9.532/1997 exempts from corporate income tax (IRPJ) and the social contribution on net profit (CSLL) nonprofit civil associations and recreational institutions that provide their services to the group they were created for. The income tax exemption, however, does not cover earnings on financial investments. For a club that holds initiation fees in a reserve fund, that detail matters every year.

Brazil's consumption tax reform changed another piece. Complementary Law 214/2025 treats building condominiums as non-taxpayers of the new IBS and CBS, with an option to join the regular regime. If they opt in, both taxes apply to every fee charged to owners and third parties. Associations and operating companies are not on that list, and each club revenue line needs its own analysis.

Then there is data. A committee that vets candidates must follow Brazil's General Data Protection Law: collect only what is needed, for a stated purpose and with a defined legal ground. And an independent audit gives members a reading of the accounts that does not depend on whoever prepared them.

A worked example: what a waiting list is worth

The figures below are hypotheses that illustrate the mechanism, not market data or a projection for any development. They start from this article's simulator defaults. Member attrition applies at the end of each year to the remaining base, compounding.

The table reads on two levels. Dues of R$ 18,000 do not cover the cost: break-even requires R$ 19,500, and plugging the gap with initiation fees consumes formation capital. And the waiting list is worth money. In scenario A, replacements bring in R$ 27 million in fees over nine years. In B, recurring revenue falls by about 37% by year 10, while the cost of the facilities stays where it was.

A stress test sharpens this. If attrition doubles to 10% a year with no waiting list, the club reaches year 10 with about 77 families and R$ 1.39 million in dues, just over a third of the cost. To break even, each remaining family would have to pay close to R$ 50,300, almost three times the original figure. The waiting list measures desire. Break-even dues measure staying power.

When it does not pay off

The model has preconditions. In three situations it destroys value instead of creating it.

• When qualified demand is missing in the region. Without enough candidates to form a list, the club accepts almost everyone and curation becomes a formality.
• When the development is too small to spread fixed costs. Staff, maintenance and programming have a floor. With few families, break-even dues rise beyond what the market will bear.
• When the obligation can no longer be recorded in time. In a subdivision already marketed without a recorded founding instrument, Theme 492 limits contributions to those who sign up. The club is born underfunded and shifts the cost onto those who joined.

A seven-step checklist for structuring a private club

1. Measure the peak capacity of every common area before setting the membership cap.
2. Choose the legal vehicle (association, condominium or operating company) by comparing who decides, who pays and who can be expelled.
3. Record the founding instrument of the duty to contribute in the Property Registry before the first contract.
4. Write admission, membership classes, expulsion with due process and transfer rules into the bylaws or charter.
5. Separate initiation fees and dues into distinct accounts and set dues at full operating cost plus reserves.
6. Check the tax treatment of each revenue line: fees, dues, guests and financial investments.
7. Establish the committee's data policy and an independent annual audit of the accounts.

In the developments InnovaSphere coordinates, two group companies work on these steps. InnConta reviews the tax treatment of each revenue line, and Valida Auditoria independently reviews the accounts presented to members.

Frequently asked questions

Does an initiation fee give a share of the club's assets?

It depends on the vehicle. At Aman Club, it does not. In a Brazilian association, there is an equity share only if the bylaws provide for one, and transferring the share does not transfer membership unless the bylaws say otherwise.

Can a plot owner refuse to contribute to the club?

No one is required to join an association. Under Theme 492, contributions apply to those who signed up to the founding instrument or to new buyers when the obligation was already recorded. In a condominium, the charter governs.

Can a member who harms the community be expelled?

In an association, only for just cause, with defense and appeal as the bylaws provide. The Aman agreement provides for notice and, at the operator's discretion, a hearing before a three-person committee. The rule must exist before the conflict.

Do paying guests help or hurt?

They help when they serve as an observed way in and have a ceiling. The US yardstick discussed above works as discipline, although it does not apply in Brazil.

How should the simulator be used alongside this article?

Compare the dues with the full operating cost and test attrition with and without a waiting list, as in the example above.

Legal basis

• Federal Constitution, Article 5, items XVII to XX: freedom of association.
• Civil Code, Articles 53 to 61 (associations), Articles 1,331 and 1,334 (building condominiums) and Article 1,358-A (plot condominiums).
• Law 6.766/1979, Article 2, § 8, and Article 36-A, as amended by Law 13.465/2017: controlled access and owners' associations.
• Supreme Federal Court, RE 695.911, Theme 492 of general repercussion.
• Law 9.532/1997, Article 15: IRPJ and CSLL exemption.
• Complementary Law 214/2025, Article 26, item I and §§ 1 and 2: condominiums, IBS and CBS.
• Law 13.709/2018 (LGPD), Articles 6 and 7.