LUXEMBOURG
The market for real estate investment vehicles is constantly developing to provide investors with flexible and innovative real estate investment products. The growth in the number of real estate investment vehicles set up in Luxembourg has outpaced the European average and makes Luxembourg one of the best choices for real estate funds.
The choice of a real estate vehicle will depend on the type of funding that needs to be raised, the proposed investor base, the type of investments to be made and any specific tax considerations.
REAL ESTATE INVESTMENT VEHICLES MAY BE SET UP AS:
REGULATED SCHEME (I.E. SUBJECT TO THE SUPERVISION OF THE CSSF):
- UCIs
- SIFs
- SICAR
- Securitisation vehicles
UNREGULATED SCHEME:
- SOPARFI
- Securitisation vehicles
IRELAND
Ireland is extremely well positioned with its offerings within the Real Estate Asset strategy class, with its funds distributed in over 70 countries globally.
Within Ireland, QIAIFs, in conjunction with the AIFMD framework, are used to establish Irish Real Estate investment vehicles. These vehicles have few investment restrictions, with little or no obligations to spread investment risk unless using a company as the vehicle. These funds are extremely flexible and distribution can be achieved through the EU AIFM authorization mechanism. These Real Estate funds are generally targeted at Professional Investors, are closed ended in nature, and set their own leverage limits.
From a legal structure perspective, ICAVs, Variable Capital Companies, Common Contractual Funds, Unit Trusts, and Investment Limited Partnerships can be used. These funds are tax neutral, with no Irish taxes on gains or profits, no Irish withholding for non-Irish investors save in the context of funds investing in Irish real estate (there are also exceptions to this). Fund approval is typically 24 hours, and launch time is generally 6 to 8 weeks in total. Real Estate QIAIFs are subject to Central Bank approval, and must appoint an AIFM, or act as a self-managed AIF. There are some notification and reporting requirements, however these are not particularly onerous.
Overall, Ireland is extremely well placed to service Real Estate investment vehicles through the flexible range of legal vehicles, and the broad eco-system of services providers in the local market.
