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Open REIT in Belgium

Open REIT in Belgium

The REIT Belgium is a commercial company established with the purpose of allowing investors to access a diverse portfolio focused on real estate investments. In Belgium, this achieved in the form of a regulated real estate company regime (the RREC), however, this is the equivalent of the real estate investment trust (or REIT, used herein) common in many other jurisdictions around the world.

The Law of 12 May 2014, or the RREC Law, and the Royal Decree or 13 July 2014 are two of the most important legal resources for the REIT in Belgium. According to law, the RREC has an ad hoc REIT status in the country, for which the main legal guidelines are offered in a number of Royal Decrees.

The experts at our law firm in Belgium outline the main requirements for setting up a legal entity that will be used as a REIT. We also briefly discuss the taxation regime for the regulated real estate company and, upon request, we can provide experienced investors with more information about the various restrictions, risk diversification and other issues concerning distribution.

The Belgian Real Estate Investment Trust

A regulated real estate investment trust is subject to certain conditions not only concerning the type of legal entity that is used to form the trust, but also in terms of distribution requirements, listing and capital requirements.

The REIT in Belgium is supervised by and subject to the requirements set forth by the Financial Services and Markets Authority (FSMA).

  1. company type: investors need to use a public limited liability company for the purpose of creating a real estate investment trust (société anonyme/naamloze vennootschap);
  2. capital: in general, the minimum share capital for the legal form is 1.2 million EUR;
  3. requirements: there is a mandatory requirement for the company to be listed on the stock exchange; therefore, it will observe all the listing rules; a diversification rule is in place;
  4. restrictions: at least 30% of the shares in the public REIT Belgium are held by the public; there are no restrictions on the type of investors, not restrictions on the investor’s place of residence;

The real estate properties this investment trust offers access to will not include forestry, agriculture or mining options. To a limited extent, the investment trust can also offer access to assets that do not fall under the scope of real estate, however, for this purpose, we recommend discussing the laws in force with our attorneys.

The portfolio will stipulate the fair value of the real estate offered for investment purposes, without the depreciation of the concerned buildings. The portfolio is subject to evaluation, on a quarterly basis in most cases, as performed by an independent expert.

Our team can give you more details about the rules applicable to the Belgian Real Estate Investment Trust.

The team of experts at our Belgian law firm offers a number of other services, such as trademark registration. You can contact us for more information.

The tax treatment of the REIT Belgium

The real estate investment trust is structured as a public limited liability company, therefore, it is subject to the tax treatment applicable to resident companies in the country. However, the taxable base is limited. Our team highlights the most important taxes applicable to the REIT Belgium below:

  • Corporate income tax: the legal entity is subject to the applicable corporate income tax rate, with a value of 29%;
  • Exit tax: this applies when a regular company is converted into a real estate investment trust or when a re-organization of a trust is performed; the value is 12.75% and our team can give you more details;
  • Withholding tax: in most cases, a 30% withholding tax applies on dividend distributions, both in the case of individual or corporate recipients; this rate can be reduced in some cases, such as when the real estate investment trust invests part of their assets in certain types of properties, such as healthcare properties;
  • Other issues: taxes on stock exchange transactions can apply and a 0.0925% annual tax is in place for these types of entities.

Contact our lawyers in Belgium for more information about the real estate investment trust. Our team is able to help you structure, set up and register the REIT Belgium, as well as understand the requirements concerning its taxation and requirements.

We are a full-service law firm that also offers assistance with representation in litigation cases. You can reach out as needed.