BELGIUM Law and Practice Contributed by: Pieter Puelinckx, Yves Moreau, Melissa Verplancke and Gauthier Callens, Linklaters
3.2 Typical Security Created by Commercial Investors Usual securities for real estate financing are: • a mortgage on the real estate asset; • in case of share deals, a pledge over the shares of the special purpose vehicle; • security on the income generated by the real estate asset (eg, pledge on rent receivables, bank accounts, and insurance receivables); and • potentially also parent guarantees. 3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders In principle, security over real estate can be granted to foreign lenders without restrictions, and payments can be made to them under secu - rity arrangements or loan agreements, as long as they do not provide regulated banking or invest - ment services in Belgium without a licence or authorisation. 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security The granting of a mortgage on a real estate asset is subject to registration duties at a rate of 1% and a mortgage duty at a rate of 0.3%, calculat - ed on the secured amount. In addition, mortgage register and notary fees will be due. Mortgages are usually granted on a limited per - centage of the secured amount in combination with a mortgage mandate (where costs are lower than those associated with mortgages) convert - ible into a mortgage in case of default on the remaining part of the secured amount. 3.5 Legal Requirements Before an Entity Can Give Valid Security Belgian companies are prohibited from advanc - ing funds, granting loans, or providing security
• 25% or more of voting rights in a Belgian company with activities relating to, among others, (physical or virtual) critical infrastruc - ture (including energy and other sectors), critical technologies and energy storage, criti - cal inputs, access to sensitive information, private security, freedom of media or biotech; or • 10% or more of voting rights in a Belgian company (i) active in certain sensitive stra - tegic sectors in Belgium (including energy, defence, cybersecurity), and (ii) which realised a global turnover exceeding EUR100 million in the financial year preceding the investment. The commission’s prior authorisation is required for the completion of the investment. Non-com - pliance with the notification requirement can lead to administrative penalties amounting to up to 30% of the total investment value. The financing of commercial real estate acquisi - tions usually involves a combination of equity, potentially including intra-group debt, and debt in the form of a loan or occasionally bonds. In case of share deals, the existing debts of the entity holding real estate may be refinanced. Financial leasing, in which the lessor/financier acquires full ownership or real rights of a real estate asset and leases the property to the les - see/debtor, with an option to acquire the (resid - ual) ownership rights upon expiry of the agree - ment is also common for financing commercial real estate. 3. Real Estate Finance 3.1 Financing Acquisitions of Commercial Real Estate
66
CHAMBERS.COM
Powered by FlippingBook