i Table of contents 1326

Real Estate 2024

Definitive global law guides offering comparative analysis from top-ranked lawyers

INTRODUCTION		7
Contributed by John Sullivan and Matt Alshouse, DLA Piper LLP		7
ANDORRA		13
Law and Practice		13
Contributed by Cases & Lacambra		13
ANGUILLA		37
Law and Practice		37
Contributed by Webster Legal		37
Trends and Developments		52
Contributed by Webster Legal		52
BELGIUM		56
Law and Practice		56
Contributed by Linklaters		56
Trends and Developments		84
Contributed by Linklaters		84
BRAZIL		95
Law and Practice		95
Contributed by Mattos Filho		95
Trends and Developments		119
Contributed by Campos Mello Advogados		119
CANADA		126
Law and Practice		126
Contributed by Stikeman Elliott LLP		126
Trends and Developments		153
Contributed by De Grandpré Chait		153
CAYMAN ISLANDS		161
Law and Practice		161
Contributed by Appleby		161
CHINA		184
Law and Practice		184
Contributed by JunHe		184
Trends and Developments		209
Contributed by Merits & Tree Law Offices		209
CYPRUS		216
Trends and Developments		216
Contributed by George K. Konstantinou Law Firm		216
DOMINICAN REPUBLIC		222
Law and Practice		222
Contributed by Guzmán Ariza		222
FRANCE		245
Law and Practice		245
Contributed by DLA Piper France LLP		245
GERMANY		271
Law and Practice		271
Contributed by Linklaters		271
Trends and Developments		296
Contributed by Latham & Watkins		296
GREECE		305
Trends and Developments		305
Contributed by Sardelas Petsa Law Firm		305
HUNGARY		313
Law and Practice		313
Contributed by Lakatos, Köves & Partners		313
INDIA		338
Law and Practice		338
Contributed by JSA		338
INDONESIA		364
Law and Practice		364
Contributed by Assegaf Hamzah & Partners		364
IRELAND		391
Law and Practice		391
Contributed by Maples Group		391
ISRAEL		416
Law and Practice		416
Contributed by Arnon, Tadmor-Levy		416
Trends and Developments		438
Contributed by Arnon, Tadmor-Levy		438
ITALY		443
Law and Practice		443
Contributed by SI – Studio Inzaghi		443
JAPAN		469
Law and Practice		469
Contributed by Mori Hamada & Matsumoto		469
Trends and Developments		493
Contributed by Nishimura & Asahi (Gaikokuho Kyodo Jigyo)		493
KENYA		500
Law and Practice		500
Contributed by DLA Piper Africa, Kenya (IKM)		500
Trends and Developments		529
Contributed by Dentons Hamilton Harrison & Mathews		529
LITHUANIA		539
Law and Practice		539
Contributed by WALLESS		539
LUXEMBOURG		561
Law and Practice		561
Contributed by Stibbe		561
MALTA		587
Law and Practice		587
Contributed by Fenech Farrugia Fiott Legal		587
MEXICO		611
Law and Practice		611
Contributed by Cannizzo		611
Trends and Developments		639
Contributed by Ritch Mueller		639
MOROCCO		646
Law and Practice		646
Contributed by Gide Loyrette Nouel		646
NETHERLANDS		675
Law and Practice		675
Contributed by Greenberg Traurig, LLP		675
Trends and Developments		699
Contributed by Greenberg Traurig, LLP		699
POLAND		704
Trends and Developments		704
Contributed by Greenberg Traurig LLP		704
PORTUGAL		713
Trends and Developments		713
Contributed by PLMJ		713
PUERTO RICO		720
Law and Practice		720
Contributed by Pietrantoni Mendez & Alvarez LLC		720
ROMANIA		742
Law and Practice		742
Contributed by Mușat & Asociații		742
SINGAPORE		767
Law and Practice		767
Contributed by WongPartnership LLP		767
Trends and Developments		792
Contributed by WongPartnership LLP		792
SLOVENIA		796
Law and Practice		796
Contributed by Odvetniki Šelih & partnerji, o.p., d.o.o.		796
SOUTH KOREA		821
Law and Practice		821
Contributed by Bae, Kim & Lee LLC		821
SPAIN		847
Law and Practice		847
Contributed by Cases & Lacambra		847
ST KITTS & NEVIS		873
Law and Practice		873
Contributed by Joseph Rowe, Attorneys-at-Law		873
Trends and Developments		898
Contributed by Joseph Rowe, Attorneys-at-Law		898
SWITZERLAND		904
Law and Practice		904
Contributed by Walder Wyss Ltd		904
Trends and Developments		924
Contributed by Baker McKenzie		924
THAILAND		932
Law and Practice		932
Contributed by Duensing Kippen, Ltd.		932
THE BAHAMAS		958
Law and Practice		958
Contributed by Graham Thompson		958
Trends and Developments		983
Contributed by Glinton Sweeting O’Brien		983
TÜRKİYE		988
Law and Practice		988
Contributed by Hergüner Bilgen Üçer Attorney Partnership		988
TURKS & CAICOS		1012
Law and Practice		1012
Contributed by Griffiths and Partners		1012
Trends and Developments		1029
Contributed by Griffiths and Partners		1029
UAE		1032
Law and Practice		1032
Contributed by DLA Piper Middle East LLP		1032
UK		1057
Law and Practice		1057
Contributed by Hawkins Hatton Corporate Lawyers Ltd		1057
Trends and Developments		1082
Contributed by Hawkins Hatton Corporate Lawyers Ltd		1082
UKRAINE		1086
Law and Practice		1086
Contributed by Arzinger		1086
Trends and Developments		1106
Contributed by Arzinger		1106
USA - ALABAMA		1113
Law and Practice		1113
Contributed by Dentons		1113
Trends and Developments		1138
Contributed by Dentons		1138
USA - FLORIDA		1147
Law and Practice		1147
Contributed by Berger Singerman LLP		1147
Trends and Developments		1174
Contributed by Berger Singerman LLP		1174
USA - IOWA		1177
Law and Practice		1177
Contributed by Dentons Davis Brown		1177
Trends and Developments		1203
Contributed by Dentons Davis Brown		1203
USA - LOUISIANA		1209
Trends and Developments		1209
Contributed by Jones Walker LLP		1209
USA - NEW JERSEY		1215
Law and Practice		1215
Contributed by Greenberg Traurig LLP		1215
USA - NEW YORK		1244
Law and Practice		1244
Contributed by Phillips Lytle LLP		1244
USA - SOUTH CAROLINA		1273
Law and Practice		1273
Contributed by K&L Gates		1273
USA - TEXAS		1297
Law and Practice		1297
Contributed by Haynes and Boone, LLP		1297
Trends and Developments		1319
Contributed by Haynes and Boone, LLP		1319
1. General		18
1.1 Main Sources of Law		18
1.2 Main Market Trends and Deals		18
1.3 Proposals for Reform		19
2. Sale and Purchase		19
2.1 Categories of Property Rights		19
2.2 Laws Applicable to Transfer of Title		19
2.3 Effecting Lawful and Proper Transfer of Title		20
2.4 Real Estate Due Diligence		20
2.5 Typical Representations and Warranties		20
2.6 Important Areas of Law for Investors		20
2.7 Soil Pollution or Environmental Contamination		21
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		21
2.9 Condemnation, Expropriation or Compulsory Purchase		21
2.10 Taxes Applicable to a Transaction		21
2.11 Legal Restrictions on Foreign Investors		22
3. Real Estate Finance		23
3.1 Financing Acquisitions of Commercial Real Estate		23
3.2 Typical Security Created by Commercial Investors		23
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		23
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		24
3.5 Legal Requirements Before an Entity Can Give Valid Security		24
3.6 Formalities When a Borrower Is in Default		24
3.7 Subordinating Existing Debt to Newly Created Debt		24
3.8 Lenders’ Liability Under Environmental Laws		25
3.9 Effects of a Borrower Becoming Insolvent		25
3.10 Taxes on Loans		25
4. Planning and Zoning		25
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		25
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		26
4.3 Regulatory Authorities		26
4.4 Obtaining Entitlements to Develop a New Project		26
4.5 Right of Appeal Against an Authority’s Decision		26
4.6 Agreements With Local or Governmental Authorities		27
4.7 Enforcement of Restrictions on Development and Designated Use		27
5. Investment Vehicles		27
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		27
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		27
5.3 REITs		28
5.4 Minimum Capital Requirement		28
5.5 Applicable Governance Requirements		28
5.6 Annual Entity Maintenance and Accounting Compliance		29
6. Commercial Leases		30
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		30
6.2 Types of Commercial Leases		30
6.3 Regulation of Rents or Lease Terms		30
6.4 Typical Terms of a Lease		30
6.5 Rent Variation		31
6.6 Determination of New Rent		31
6.7 Payment of VAT		31
6.8 Costs Payable by a Tenant at the Start of a Lease		31
6.9 Payment of Maintenance and Repair		31
6.10 Payment of Utilities and Telecommunications		31
6.11 Insurance Issues		31
6.12 Restrictions on the Use of Real Estate		31
6.13 Tenant’s Ability to Alter and Improve Real Estate		32
6.14 Specific Regulations		32
6.15 Effect of the Tenant’s Insolvency		32
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		33
6.17 Right to Occupy After Termination or Expiry of a Lease		33
6.18 Right to Assign a Leasehold Interest		33
6.19 Right to Terminate a Lease		33
6.20 Registration Requirements		34
6.21 Forced Eviction		34
6.22 Termination by a Third Party		34
6.23 Remedies/Damages for Breach		34
7. Construction		34
7.1 Common Structures Used to Price Construction Projects		34
7.2 Assigning Responsibility for the Design and Construction of a Project		34
7.3 Management of Construction Risk		35
7.4 Management of Schedule-Related Risk		35
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		35
7.6 Liens or Encumbrances in the Event of Non-payment		35
7.7 Requirements Before Use or Inhabitation		35
8. Tax		36
8.1 VAT and Sales Tax		36
8.2 Mitigation of Tax Liability		36
8.3 Municipal Taxes		36
8.4 Income Tax Withholding for Foreign Investors		36
8.5 Tax Benefits		36
1. General		41
1.1 Main Sources of Law		41
1.2 Main Market Trends and Deals		41
1.3 Proposals for Reform		41
2. Sale and Purchase		41
2.1 Categories of Property Rights		41
2.2 Laws Applicable to Transfer of Title		41
2.3 Effecting Lawful and Proper Transfer of Title		41
2.4 Real Estate Due Diligence		41
2.5 Typical Representations and Warranties		42
2.6 Important Areas of Law for Investors		42
2.7 Soil Pollution or Environmental Contamination		42
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		43
2.9 Condemnation, Expropriation or Compulsory Purchase		43
2.10 Taxes Applicable to a Transaction		43
2.11 Legal Restrictions on Foreign Investors		44
3. Real Estate Finance		44
3.1 Financing Acquisitions of Commercial Real Estate		44
3.2 Typical Security Created by Commercial Investors		44
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		44
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		44
3.5 Legal Requirements Before an Entity Can Give Valid Security		45
3.6 Formalities When a Borrower Is in Default		45
3.7 Subordinating Existing Debt to Newly Created Debt		45
3.8 Lenders’ Liability Under Environmental Laws		45
3.9 Effects of a Borrower Becoming Insolvent		45
3.10 Taxes on Loans		45
4. Planning and Zoning		45
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		45
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		45
4.3 Regulatory Authorities		46
4.4 Obtaining Entitlements to Develop a New Project		46
4.5 Right of Appeal Against an Authority’s Decision		46
4.6 Agreements With Local or Governmental Authorities		46
4.7 Enforcement of Restrictions on Development and Designated Use		46
5. Investment Vehicles		46
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		46
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		47
5.3 REITs		47
5.4 Minimum Capital Requirement		47
5.5 Applicable Governance Requirements		47
5.6 Annual Entity Maintenance and Accounting Compliance		47
6. Commercial Leases		47
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		47
6.2 Types of Commercial Leases		47
6.3 Regulation of Rents or Lease Terms		47
6.4 Typical Terms of a Lease		47
6.5 Rent Variation		48
6.6 Determination of New Rent		48
6.7 Payment of VAT		48
6.8 Costs Payable by a Tenant at the Start of a Lease		48
6.9 Payment of Maintenance and Repair		48
6.10 Payment of Utilities and Telecommunications		48
6.11 Insurance Issues		48
6.12 Restrictions on the Use of Real Estate		48
6.13 Tenant’s Ability to Alter and Improve Real Estate		48
6.14 Specific Regulations		48
6.15 Effect of the Tenant’s Insolvency		49
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		49
6.17 Right to Occupy After Termination or Expiry of a Lease		49
6.18 Right to Assign a Leasehold Interest		49
6.19 Right to Terminate a Lease		49
6.20 Registration Requirements		49
6.21 Forced Eviction		50
6.22 Termination by a Third Party		50
6.23 Remedies/Damages for Breach		50
7. Construction		50
7.1 Common Structures Used to Price Construction Projects		50
7.2 Assigning Responsibility for the Design and Construction of a Project		50
7.3 Management of Construction Risk		50
7.4 Management of Schedule-Related Risk		50
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		50
7.6 Liens or Encumbrances in the Event of Non-payment		50
7.7 Requirements Before Use or Inhabitation		51
8. Tax		51
8.1 VAT and Sales Tax		51
8.2 Mitigation of Tax Liability		51
8.3 Municipal Taxes		51
8.4 Income Tax Withholding for Foreign Investors		51
8.5 Tax Benefits		51
1. General		61
1.1 Main Sources of Law		61
1.2 Main Market Trends and Deals		61
1.3 Proposals for Reform		62
2. Sale and Purchase		62
2.1 Categories of Property Rights		62
2.2 Laws Applicable to Transfer of Title		62
2.3 Effecting Lawful and Proper Transfer of Title		63
2.4 Real Estate Due Diligence		63
2.5 Typical Representations and Warranties		64
2.6 Important Areas of Law for Investors		64
2.7 Soil Pollution or Environmental Contamination		64
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		65
2.9 Condemnation, Expropriation or Compulsory Purchase		66
2.10 Taxes Applicable to a Transaction		66
2.11 Legal Restrictions on Foreign Investors		66
3. Real Estate Finance		67
3.1 Financing Acquisitions of Commercial Real Estate		67
3.2 Typical Security Created by Commercial Investors		67
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		67
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		67
3.5 Legal Requirements Before an Entity Can Give Valid Security		67
3.6 Formalities When a Borrower Is in Default		68
3.7 Subordinating Existing Debt to Newly Created Debt		68
3.8 Lenders’ Liability Under Environmental Laws		68
3.9 Effects of a Borrower Becoming Insolvent		68
3.10 Taxes on Loans		69
4. Planning and Zoning		69
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		69
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		69
4.3 Regulatory Authorities		69
4.4 Obtaining Entitlements to Develop a New Project		70
4.5 Right of Appeal Against an Authority’s Decision		70
4.6 Agreements With Local or Governmental Authorities		70
4.7 Enforcement of Restrictions on Development and Designated Use		70
5. Investment Vehicles		70
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		70
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		71
5.3 REITs		72
5.4 Minimum Capital Requirement		73
5.5 Applicable Governance Requirements		73
5.6 Annual Entity Maintenance and Accounting Compliance		73
6. Commercial Leases		74
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		74
6.2 Types of Commercial Leases		74
6.3 Regulation of Rents or Lease Terms		74
6.4 Typical Terms of a Lease		74
6.5 Rent Variation		75
6.6 Determination of New Rent		75
6.7 Payment of VAT		76
6.8 Costs Payable by a Tenant at the Start of a Lease		76
6.9 Payment of Maintenance and Repair		76
6.10 Payment of Utilities and Telecommunications		76
6.11 Insurance Issues		76
6.12 Restrictions on the Use of Real Estate		77
6.13 Tenant’s Ability to Alter and Improve Real Estate		77
6.14 Specific Regulations		77
6.15 Effect of the Tenant’s Insolvency		77
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		78
6.17 Right to Occupy After Termination or Expiry of a Lease		78
6.18 Right to Assign a Leasehold Interest		78
6.19 Right to Terminate a Lease		78
6.20 Registration Requirements		79
6.21 Forced Eviction		79
6.22 Termination by a Third Party		79
6.23 Remedies/Damages for Breach		79
7. Construction		79
7.1 Common Structures Used to Price Construction Projects		79
7.2 Assigning Responsibility for the Design and Construction of a Project		80
7.3 Management of Construction Risk		80
7.4 Management of Schedule-Related Risk		81
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		81
7.6 Liens or Encumbrances in the Event of Non-payment		81
7.7 Requirements Before Use or Inhabitation		81
8. Tax		82
8.1 VAT and Sales Tax		82
8.2 Mitigation of Tax Liability		82
8.3 Municipal Taxes		83
8.4 Income Tax Withholding for Foreign Investors		83
8.5 Tax Benefits		83
1. General		100
1.1 Main Sources of Law		100
1.2 Main Market Trends and Deals		100
1.3 Proposals for Reform		101
2. Sale and Purchase		101
2.1 Categories of Property Rights		101
2.2 Laws Applicable to Transfer of Title		102
2.3 Effecting Lawful and Proper Transfer of Title		102
2.4 Real Estate Due Diligence		102
2.5 Typical Representations and Warranties		102
2.6 Important Areas of Law for Investors		103
2.7 Soil Pollution or Environmental Contamination		103
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		103
2.9 Condemnation, Expropriation or Compulsory Purchase		104
2.10 Taxes Applicable to a Transaction		104
2.11 Legal Restrictions on Foreign Investors		104
3. Real Estate Finance		105
3.1 Financing Acquisitions of Commercial Real Estate		105
3.2 Typical Security Created by Commercial Investors		105
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		105
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		105
3.5 Legal Requirements Before an Entity Can Give Valid Security		106
3.6 Formalities When a Borrower Is in Default		106
3.7 Subordinating Existing Debt to Newly Created Debt		106
3.8 Lenders’ Liability Under Environmental Laws		106
3.9 Effects of a Borrower Becoming Insolvent		106
3.10 Taxes on Loans		106
4. Planning and Zoning		106
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		106
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		107
4.3 Regulatory Authorities		107
4.4 Obtaining Entitlements to Develop a New Project		107
4.5 Right of Appeal Against an Authority’s Decision		108
4.6 Agreements With Local or Governmental Authorities		108
4.7 Enforcement of Restrictions on Development and Designated Use		108
5. Investment Vehicles		108
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		108
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		108
5.3 REITs		109
5.4 Minimum Capital Requirement		109
5.5 Applicable Governance Requirements		109
5.6 Annual Entity Maintenance and Accounting Compliance		110
6. Commercial Leases		110
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		110
6.2 Types of Commercial Leases		110
6.3 Regulation of Rents or Lease Terms		110
6.4 Typical Terms of a Lease		111
6.5 Rent Variation		111
6.6 Determination of New Rent		111
6.7 Payment of VAT		111
6.8 Costs Payable by a Tenant at the Start of a Lease		112
6.9 Payment of Maintenance and Repair		112
6.10 Payment of Utilities and Telecommunications		112
6.11 Insurance Issues		112
6.12 Restrictions on the Use of Real Estate		112
6.13 Tenant’s Ability to Alter and Improve Real Estate		113
6.14 Specific Regulations		113
6.15 Effect of the Tenant’s Insolvency		113
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		113
6.17 Right to Occupy After Termination or Expiry of a Lease		113
6.18 Right to Assign a Leasehold Interest		114
6.19 Right to Terminate a Lease		114
6.20 Registration Requirements		114
6.21 Forced Eviction		115
6.22 Termination by a Third Party		115
6.23 Remedies/Damages for Breach		115
7. Construction		116
7.1 Common Structures Used to Price Construction Projects		116
7.2 Assigning Responsibility for the Design and Construction of a Project		116
7.3 Management of Construction Risk		116
7.4 Management of Schedule-Related Risk		116
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		117
7.6 Liens or Encumbrances in the Event of Non-payment		117
7.7 Requirements Before Use or Inhabitation		117
8. Tax		117
8.1 VAT and Sales Tax		117
8.2 Mitigation of Tax Liability		117
8.3 Municipal Taxes		118
8.4 Income Tax Withholding for Foreign Investors		118
8.5 Tax Benefits		118
1. General		131
1.1 Main Sources of Law		131
1.2 Main Market Trends and Deals		131
1.3 Proposals for Reform		132
2. Sale and Purchase		133
2.1 Categories of Property Rights		133
2.2 Laws Applicable to Transfer of Title		133
2.3 Effecting Lawful and Proper Transfer of Title		133
2.4 Real Estate Due Diligence		134
2.5 Typical Representations and Warranties		134
2.6 Important Areas of Law for Investors		135
2.7 Soil Pollution or Environmental Contamination		135
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		136
2.9 Condemnation, Expropriation or Compulsory Purchase		136
2.10 Taxes Applicable to a Transaction		136
2.11 Legal Restrictions on Foreign Investors		137
3. Real Estate Finance		138
3.1 Financing Acquisitions of Commercial Real Estate		138
3.2 Typical Security Created by Commercial Investors		138
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		138
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		138
3.5 Legal Requirements Before an Entity Can Give Valid Security		138
3.6 Formalities When a Borrower Is in Default		139
3.7 Subordinating Existing Debt to Newly Created Debt		139
3.8 Lenders’ Liability Under Environmental Laws		139
3.9 Effects of a Borrower Becoming Insolvent		140
3.10 Taxes on Loans		140
4. Planning and Zoning		140
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		140
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		140
4.3 Regulatory Authorities		140
4.4 Obtaining Entitlements to Develop a New Project		140
4.5 Right of Appeal Against an Authority’s Decision		141
4.6 Agreements With Local or Governmental Authorities		141
4.7 Enforcement of Restrictions on Development and Designated Use		141
5. Investment Vehicles		141
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		141
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		141
5.3 REITs		142
5.4 Minimum Capital Requirement		142
5.5 Applicable Governance Requirements		143
5.6 Annual Entity Maintenance and Accounting Compliance		143
6. Commercial Leases		143
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		143
6.2 Types of Commercial Leases		143
6.3 Regulation of Rents or Lease Terms		144
6.4 Typical Terms of a Lease		144
6.5 Rent Variation		144
6.6 Determination of New Rent		144
6.7 Payment of VAT		145
6.8 Costs Payable by a Tenant at the Start of a Lease		145
6.9 Payment of Maintenance and Repair		145
6.10 Payment of Utilities and Telecommunications		145
6.11 Insurance Issues		145
6.12 Restrictions on the Use of Real Estate		145
6.13 Tenant’s Ability to Alter and Improve Real Estate		145
6.14 Specific Regulations		145
6.15 Effect of the Tenant’s Insolvency		146
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		146
6.17 Right to Occupy After Termination or Expiry of a Lease		146
6.18 Right to Assign a Leasehold Interest		146
6.19 Right to Terminate a Lease		146
6.20 Registration Requirements		147
6.21 Forced Eviction		147
6.22 Termination by a Third Party		147
6.23 Remedies/Damages for Breach		147
7. Construction		148
7.1 Common Structures Used to Price Construction Projects		148
7.2 Assigning Responsibility for the Design and Construction of a Project		148
7.3 Management of Construction Risk		148
7.4 Management of Schedule-Related Risk		148
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		149
7.6 Liens or Encumbrances in the Event of Non-payment		149
7.7 Requirements Before Use or Inhabitation		149
8. Tax		150
8.1 VAT and Sales Tax		150
8.2 Mitigation of Tax Liability		150
8.3 Municipal Taxes		150
8.4 Income Tax Withholding for Foreign Investors		150
8.5 Tax Benefits		151
1. General		165
1.1 Main Sources of Law		165
1.2 Main Market Trends and Deals		165
1.3 Proposals for Reform		166
2. Sale and Purchase		166
2.1 Categories of Property Rights		166
2.2 Laws Applicable to Transfer of Title		166
2.3 Effecting Lawful and Proper Transfer of Title		166
2.4 Real Estate Due Diligence		167
2.5 Typical Representations and Warranties		168
2.6 Important Areas of Law for Investors		168
2.7 Soil Pollution or Environmental Contamination		168
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		169
2.9 Condemnation, Expropriation or Compulsory Purchase		169
2.10 Taxes Applicable to a Transaction		169
2.11 Legal Restrictions on Foreign Investors		170
3. Real Estate Finance		171
3.1 Financing Acquisitions of Commercial Real Estate		171
3.2 Typical Security Created by Commercial Investors		171
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		171
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		171
3.5 Legal Requirements Before an Entity Can Give Valid Security		172
3.6 Formalities When a Borrower Is in Default		172
3.7 Subordinating Existing Debt to Newly Created Debt		173
3.8 Lenders’ Liability Under Environmental Laws		173
3.9 Effects of a Borrower Becoming Insolvent		173
3.10 Taxes on Loans		173
4. Planning and Zoning		173
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		173
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		174
4.3 Regulatory Authorities		174
4.4 Obtaining Entitlements to Develop a New Project		174
4.5 Right of Appeal Against an Authority’s Decision		174
4.6 Agreements With Local or Governmental Authorities		175
4.7 Enforcement of Restrictions on Development and Designated Use		175
5. Investment Vehicles		175
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		175
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		175
5.3 REITs		175
5.4 Minimum Capital Requirement		176
5.5 Applicable Governance Requirements		176
5.6 Annual Entity Maintenance and Accounting Compliance		176
6. Commercial Leases		176
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		176
6.2 Types of Commercial Leases		176
6.3 Regulation of Rents or Lease Terms		177
6.4 Typical Terms of a Lease		178
6.5 Rent Variation		178
6.6 Determination of New Rent		178
6.7 Payment of VAT		178
6.8 Costs Payable by a Tenant at the Start of a Lease		179
6.9 Payment of Maintenance and Repair		179
6.10 Payment of Utilities and Telecommunications		179
6.11 Insurance Issues		179
6.12 Restrictions on the Use of Real Estate		179
6.13 Tenant’s Ability to Alter and Improve Real Estate		179
6.14 Specific Regulations		179
6.15 Effect of the Tenant’s Insolvency		179
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		179
6.17 Right to Occupy After Termination or Expiry of a Lease		180
6.18 Right to Assign a Leasehold Interest		180
6.19 Right to Terminate a Lease		180
6.20 Registration Requirements		180
6.21 Forced Eviction		180
6.22 Termination by a Third Party		180
6.23 Remedies/Damages for Breach		181
7. Construction		181
7.1 Common Structures Used to Price Construction Projects		181
7.2 Assigning Responsibility for the Design and Construction of a Project		181
7.3 Management of Construction Risk		181
7.4 Management of Schedule-Related Risk		181
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		181
7.6 Liens or Encumbrances in the Event of Non-payment		181
7.7 Requirements Before Use or Inhabitation		181
8. Tax		181
8.1 VAT and Sales Tax		181
8.2 Mitigation of Tax Liability		183
8.3 Municipal Taxes		183
8.4 Income Tax Withholding for Foreign Investors		183
8.5 Tax Benefits		183
1. General		189
1.1 Main Sources of Law		189
1.2 Main Market Trends and Deals		189
1.3 Proposals for Reform		189
2. Sale and Purchase		189
2.1 Categories of Property Rights		189
2.2 Laws Applicable to Transfer of Title		189
2.3 Effecting Lawful and Proper Transfer of Title		190
2.4 Real Estate Due Diligence		190
2.5 Typical Representations and Warranties		190
2.6 Important Areas of Law for Investors		191
2.7 Soil Pollution or Environmental Contamination		191
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		191
2.9 Condemnation, Expropriation or Compulsory Purchase		192
2.10 Taxes Applicable to a Transaction		192
2.11 Legal Restrictions on Foreign Investors		193
3. Real Estate Finance		193
3.1 Financing Acquisitions of Commercial Real Estate		193
3.2 Typical Security Created by Commercial Investors		194
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		194
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		194
3.5 Legal Requirements Before an Entity Can Give Valid Security		194
3.6 Formalities When a Borrower Is in Default		195
3.7 Subordinating Existing Debt to Newly Created Debt		195
3.8 Lenders’ Liability Under Environmental Laws		195
3.9 Effects of a Borrower Becoming Insolvent		195
3.10 Taxes on Loans		196
4. Planning and Zoning		196
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		196
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		196
4.3 Regulatory Authorities		196
4.4 Obtaining Entitlements to Develop a New Project		196
4.5 Right of Appeal Against an Authority’s Decision		197
4.6 Agreements With Local or Governmental Authorities		197
4.7 Enforcement of Restrictions on Development and Designated Use		197
5. Investment Vehicles		198
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		198
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		198
5.3 REITs		198
5.4 Minimum Capital Requirement		198
5.5 Applicable Governance Requirements		198
5.6 Annual Entity Maintenance and Accounting Compliance		199
6. Commercial Leases		199
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		199
6.2 Types of Commercial Leases		200
6.3 Regulation of Rents or Lease Terms		200
6.4 Typical Terms of a Lease		200
6.5 Rent Variation		201
6.6 Determination of New Rent		201
6.7 Payment of VAT		201
6.8 Costs Payable by a Tenant at the Start of a Lease		201
6.9 Payment of Maintenance and Repair		201
6.10 Payment of Utilities and Telecommunications		201
6.11 Insurance Issues		201
6.12 Restrictions on the Use of Real Estate		202
6.13 Tenant’s Ability to Alter and Improve Real Estate		202
6.14 Specific Regulations		202
6.15 Effect of the Tenant’s Insolvency		202
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		203
6.17 Right to Occupy After Termination or Expiry of a Lease		203
6.18 Right to Assign a Leasehold Interest		203
6.19 Right to Terminate a Lease		203
6.20 Registration Requirements		204
6.21 Forced Eviction		204
6.22 Termination by a Third Party		204
6.23 Remedies/Damages for Breach		204
7. Construction		204
7.1 Common Structures Used to Price Construction Projects		204
7.2 Assigning Responsibility for the Design and Construction of a Project		205
7.3 Management of Construction Risk		206
7.4 Management of Schedule-Related Risk		206
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		206
7.6 Liens or Encumbrances in the Event of Non-payment		207
7.7 Requirements Before Use or Inhabitation		207
8. Tax		207
8.1 VAT and Sales Tax		207
8.2 Mitigation of Tax Liability		208
8.3 Municipal Taxes		208
8.4 Income Tax Withholding for Foreign Investors		208
8.5 Tax Benefits		208
1. General		227
1.1 Main Sources of Law		227
1.2 Main Market Trends and Deals		227
1.3 Proposals for Reform		229
2. Sale and Purchase		229
2.1 Categories of Property Rights		229
2.2 Laws Applicable to Transfer of Title		229
2.3 Effecting Lawful and Proper Transfer of Title		230
2.4 Real Estate Due Diligence		230
2.5 Typical Representations and Warranties		231
2.6 Important Areas of Law for Investors		231
2.7 Soil Pollution or Environmental Contamination		231
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		231
2.9 Condemnation, Expropriation or Compulsory Purchase		232
2.10 Taxes Applicable to a Transaction		232
2.11 Legal Restrictions on Foreign Investors		232
3. Real Estate Finance		233
3.1 Financing Acquisitions of Commercial Real Estate		233
3.2 Typical Security Created by Commercial Investors		233
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		233
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		234
3.5 Legal Requirements Before an Entity Can Give Valid Security		234
3.6 Formalities When a Borrower Is in Default		234
3.7 Subordinating Existing Debt to Newly Created Debt		235
3.8 Lenders’ Liability Under Environmental Laws		235
3.9 Effects of a Borrower Becoming Insolvent		235
3.10 Taxes on Loans		235
4. Planning and Zoning		236
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		236
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		236
4.3 Regulatory Authorities		236
4.4 Obtaining Entitlements to Develop a New Project		236
4.5 Right of Appeal Against an Authority’s Decision		236
4.6 Agreements With Local or Governmental Authorities		237
4.7 Enforcement of Restrictions on Development and Designated Use		237
5. Investment Vehicles		237
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		237
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		238
5.3 REITs		238
5.4 Minimum Capital Requirement		238
5.5 Applicable Governance Requirements		238
5.6 Annual Entity Maintenance and Accounting Compliance		239
6. Commercial Leases		239
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		239
6.2 Types of Commercial Leases		239
6.3 Regulation of Rents or Lease Terms		239
6.4 Typical Terms of a Lease		239
6.5 Rent Variation		240
6.6 Determination of New Rent		240
6.7 Payment of VAT		240
6.8 Costs Payable by a Tenant at the Start of a Lease		240
6.9 Payment of Maintenance and Repair		240
6.10 Payment of Utilities and Telecommunications		240
6.11 Insurance Issues		240
6.12 Restrictions on the Use of Real Estate		240
6.13 Tenant’s Ability to Alter and Improve Real Estate		240
6.14 Specific Regulations		240
6.15 Effect of the Tenant’s Insolvency		241
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		241
6.17 Right to Occupy After Termination or Expiry of a Lease		241
6.18 Right to Assign a Leasehold Interest		241
6.19 Right to Terminate a Lease		241
6.20 Registration Requirements		241
6.21 Forced Eviction		242
6.22 Termination by a Third Party		242
6.23 Remedies/Damages for Breach		242
7. Construction		242
7.1 Common Structures Used to Price Construction Projects		242
7.2 Assigning Responsibility for the Design and Construction of a Project		242
7.3 Management of Construction Risk		243
7.4 Management of Schedule-Related Risk		243
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		243
7.6 Liens or Encumbrances in the Event of Non-payment		243
7.7 Requirements Before Use or Inhabitation		243
8. Tax		243
8.1 VAT and Sales Tax		243
8.2 Mitigation of Tax Liability		243
8.3 Municipal Taxes		244
8.4 Income Tax Withholding for Foreign Investors		244
8.5 Tax Benefits		244
1. General		250
1.1 Main Sources of Law		250
1.2 Main Market Trends and Deals		250
1.3 Proposals for Reform		250
2. Sale and Purchase		251
2.1 Categories of Property Rights		251
2.2 Laws Applicable to Transfer of Title		251
2.3 Effecting Lawful and Proper Transfer of Title		251
2.4 Real Estate Due Diligence		251
2.5 Typical Representations and Warranties		251
2.6 Important Areas of Law for Investors		252
2.7 Soil Pollution or Environmental Contamination		253
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		253
2.9 Condemnation, Expropriation or Compulsory Purchase		253
2.10 Taxes Applicable to a Transaction		253
2.11 Legal Restrictions on Foreign Investors		253
3. Real Estate Finance		254
3.1 Financing Acquisitions of Commercial Real Estate		254
3.2 Typical Security Created by Commercial Investors		254
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		254
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		255
3.5 Legal Requirements Before an Entity Can Give Valid Security		255
3.6 Formalities When a Borrower Is in Default		255
3.7 Subordinating Existing Debt to Newly Created Debt		256
3.8 Lenders’ Liability Under Environmental Laws		256
3.9 Effects of a Borrower Becoming Insolvent		256
3.10 Taxes on Loans		256
4. Planning and Zoning		256
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		256
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		257
4.3 Regulatory Authorities		257
4.4 Obtaining Entitlements to Develop a New Project		257
4.5 Right of Appeal Against an Authority’s Decision		257
4.6 Agreements With Local or Governmental Authorities		257
4.7 Enforcement of Restrictions on Development and Designated Use		258
5. Investment Vehicles		258
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		258
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		258
5.3 REITs		259
5.4 Minimum Capital Requirement		259
5.5 Applicable Governance Requirements		259
5.6 Annual Entity Maintenance and Accounting Compliance		261
6. Commercial Leases		261
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		261
6.2 Types of Commercial Leases		262
6.3 Regulation of Rents or Lease Terms		262
6.4 Typical Terms of a Lease		262
6.5 Rent Variation		262
6.6 Determination of New Rent		263
6.7 Payment of VAT		263
6.8 Costs Payable by a Tenant at the Start of a Lease		263
6.9 Payment of Maintenance and Repair		263
6.10 Payment of Utilities and Telecommunications		263
6.11 Insurance Issues		263
6.12 Restrictions on the Use of Real Estate		263
6.13 Tenant’s Ability to Alter and Improve Real Estate		263
6.14 Specific Regulations		264
6.15 Effect of the Tenant’s Insolvency		264
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		264
6.17 Right to Occupy After Termination or Expiry of a Lease		264
6.18 Right to Assign a Leasehold Interest		264
6.19 Right to Terminate a Lease		264
6.20 Registration Requirements		265
6.21 Forced Eviction		265
6.22 Termination by a Third Party		265
6.23 Remedies/Damages for Breach		265
7. Construction		266
7.1 Common Structures Used to Price Construction Projects		266
7.2 Assigning Responsibility for the Design and Construction of a Project		266
7.3 Management of Construction Risk		266
7.4 Management of Schedule-Related Risk		267
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		267
7.6 Liens or Encumbrances in the Event of Non-payment		267
7.7 Requirements Before Use or Inhabitation		267
8. Tax		267
8.1 VAT and Sales Tax		267
8.2 Mitigation of Tax Liability		268
8.3 Municipal Taxes		268
8.4 Income Tax Withholding for Foreign Investors		268
8.5 Tax Benefits		270
1. General		276
1.1 Main Sources of Law		276
1.2 Main Market Trends and Deals		276
1.3 Proposals for Reform		276
2. Sale and Purchase		277
2.1 Categories of Property Rights		277
2.2 Laws Applicable to Transfer of Title		277
2.3 Effecting Lawful and Proper Transfer of Title		277
2.4 Real Estate Due Diligence		278
2.5 Typical Representations and Warranties		278
2.6 Important Areas of Law for Investors		279
2.7 Soil Pollution or Environmental Contamination		279
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		279
2.9 Condemnation, Expropriation or Compulsory Purchase		279
2.10 Taxes Applicable to a Transaction		280
2.11 Legal Restrictions on Foreign Investors		280
3. Real Estate Finance		280
3.1 Financing Acquisitions of Commercial Real Estate		280
3.2 Typical Security Created by Commercial Investors		280
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		281
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		281
3.5 Legal Requirements Before an Entity Can Give Valid Security		281
3.6 Formalities When a Borrower Is in Default		282
3.7 Subordinating Existing Debt to Newly Created Debt		282
3.8 Lenders’ Liability Under Environmental Laws		283
3.9 Effects of a Borrower Becoming Insolvent		283
3.10 Taxes on Loans		283
4. Planning and Zoning		284
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		284
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		284
4.3 Regulatory Authorities		284
4.4 Obtaining Entitlements to Develop a New Project		284
4.5 Right of Appeal Against an Authority’s Decision		285
4.6 Agreements With Local or Governmental Authorities		285
4.7 Enforcement of Restrictions on Development and Designated Use		285
5. Investment Vehicles		285
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		285
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		285
5.3 REITs		286
5.4 Minimum Capital Requirement		286
5.5 Applicable Governance Requirements		286
5.6 Annual Entity Maintenance and Accounting Compliance		286
6. Commercial Leases		286
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		286
6.2 Types of Commercial Leases		286
6.3 Regulation of Rents or Lease Terms		287
6.4 Typical Terms of a Lease		287
6.5 Rent Variation		287
6.6 Determination of New Rent		287
6.7 Payment of VAT		288
6.8 Costs Payable by a Tenant at the Start of a Lease		288
6.9 Payment of Maintenance and Repair		288
6.10 Payment of Utilities and Telecommunications		288
6.11 Insurance Issues		288
6.12 Restrictions on the Use of Real Estate		288
6.13 Tenant’s Ability to Alter and Improve Real Estate		289
6.14 Specific Regulations		289
6.15 Effect of the Tenant’s Insolvency		289
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		289
6.17 Right to Occupy After Termination or Expiry of a Lease		290
6.18 Right to Assign a Leasehold Interest		290
6.19 Right to Terminate a Lease		290
6.20 Registration Requirements		291
6.21 Forced Eviction		291
6.22 Termination by a Third Party		291
6.23 Remedies/Damages for Breach		291
7. Construction		292
7.1 Common Structures Used to Price Construction Projects		292
7.2 Assigning Responsibility for the Design and Construction of a Project		292
7.3 Management of Construction Risk		292
7.4 Management of Schedule-Related Risk		292
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		293
7.6 Liens or Encumbrances in the Event of Non-payment		293
7.7 Requirements Before Use or Inhabitation		293
8. Tax		293
8.1 VAT and Sales Tax		293
8.2 Mitigation of Tax Liability		294
8.3 Municipal Taxes		294
8.4 Income Tax Withholding for Foreign Investors		294
8.5 Tax Benefits		294
1. General		317
1.1 Main Sources of Law		317
1.2 Main Market Trends and Deals		317
1.3 Proposals for Reform		318
2. Sale and Purchase		318
2.1 Categories of Property Rights		318
2.2 Laws Applicable to Transfer of Title		318
2.3 Effecting Lawful and Proper Transfer of Title		319
2.4 Real Estate Due Diligence		319
2.5 Typical Representations and Warranties		319
2.6 Important Areas of Law for Investors		320
2.7 Soil Pollution or Environmental Contamination		320
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		320
2.9 Condemnation, Expropriation or Compulsory Purchase		320
2.10 Taxes Applicable to a Transaction		320
2.11 Legal Restrictions on Foreign Investors		321
3. Real Estate Finance		322
3.1 Financing Acquisitions of Commercial Real Estate		322
3.2 Typical Security Created by Commercial Investors		322
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		322
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		322
3.5 Legal Requirements Before an Entity Can Give Valid Security		323
3.6 Formalities When a Borrower Is in Default		323
3.7 Subordinating Existing Debt to Newly Created Debt		324
3.8 Lenders’ Liability Under Environmental Laws		324
3.9 Effects of a Borrower Becoming Insolvent		324
3.10 Taxes on Loans		325
4. Planning and Zoning		325
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		325
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		325
4.3 Regulatory Authorities		325
4.4 Obtaining Entitlements to Develop a New Project		326
4.5 Right of Appeal Against an Authority’s Decision		326
4.6 Agreements With Local or Governmental Authorities		326
4.7 Enforcement of Restrictions on Development and Designated Use		326
5. Investment Vehicles		327
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		327
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		327
5.3 REITs		327
5.4 Minimum Capital Requirement		327
5.5 Applicable Governance Requirements		328
5.6 Annual Entity Maintenance and Accounting Compliance		328
6. Commercial Leases		329
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		329
6.2 Types of Commercial Leases		329
6.3 Regulation of Rents or Lease Terms		329
6.4 Typical Terms of a Lease		329
6.5 Rent Variation		330
6.6 Determination of New Rent		330
6.7 Payment of VAT		330
6.8 Costs Payable by a Tenant at the Start of a Lease		330
6.9 Payment of Maintenance and Repair		330
6.10 Payment of Utilities and Telecommunications		330
6.11 Insurance Issues		330
6.12 Restrictions on the Use of Real Estate		331
6.13 Tenant’s Ability to Alter and Improve Real Estate		331
6.14 Specific Regulations		331
6.15 Effect of the Tenant’s Insolvency		331
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		331
6.17 Right to Occupy After Termination or Expiry of a Lease		332
6.18 Right to Assign a Leasehold Interest		332
6.19 Right to Terminate a Lease		332
6.20 Registration Requirements		332
6.21 Forced Eviction		332
6.22 Termination by a Third Party		333
6.23 Remedies/Damages for Breach		333
7. Construction		333
7.1 Common Structures Used to Price Construction Projects		333
7.2 Assigning Responsibility for the Design and Construction of a Project		333
7.3 Management of Construction Risk		334
7.4 Management of Schedule-Related Risk		334
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		334
7.6 Liens or Encumbrances in the Event of Non-payment		334
7.7 Requirements Before Use or Inhabitation		334
8. Tax		334
8.1 VAT and Sales Tax		334
8.2 Mitigation of Tax Liability		335
8.3 Municipal Taxes		335
8.4 Income Tax Withholding for Foreign Investors		336
8.5 Tax Benefits		336
1. General		342
1.1 Main Sources of Law		342
1.2 Main Market Trends and Deals		342
1.3 Proposals for Reform		343
2. Sale and Purchase		344
2.1 Categories of Property Rights		344
2.2 Laws Applicable to Transfer of Title		344
2.3 Effecting Lawful and Proper Transfer of Title		344
2.4 Real Estate Due Diligence		345
2.5 Typical Representations and Warranties		345
2.6 Important Areas of Law for Investors		346
2.7 Soil Pollution or Environmental Contamination		346
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		346
2.9 Condemnation, Expropriation or Compulsory Purchase		346
2.10 Taxes Applicable to a Transaction		347
2.11 Legal Restrictions on Foreign Investors		347
3. Real Estate Finance		348
3.1 Financing Acquisitions of Commercial Real Estate		348
3.2 Typical Security Created by Commercial Investors		350
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		350
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		350
3.5 Legal Requirements Before an Entity Can Give Valid Security		350
3.6 Formalities When a Borrower Is in Default		351
3.7 Subordinating Existing Debt to Newly Created Debt		351
3.8 Lenders’ Liability Under Environmental Laws		351
3.9 Effects of a Borrower Becoming Insolvent		351
3.10 Taxes on Loans		352
4. Planning and Zoning		352
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		352
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		352
4.3 Regulatory Authorities		353
4.4 Obtaining Entitlements to Develop a New Project		353
4.5 Right of Appeal Against an Authority’s Decision		353
4.6 Agreements With Local or Governmental Authorities		353
4.7 Enforcement of Restrictions on Development and Designated Use		354
5. Investment Vehicles		354
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		354
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		354
5.3 REITs		354
5.4 Minimum Capital Requirement		355
5.5 Applicable Governance Requirements		355
5.6 Annual Entity Maintenance and Accounting Compliance		356
6. Commercial Leases		356
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		356
6.2 Types of Commercial Leases		356
6.3 Regulation of Rents or Lease Terms		356
6.4 Typical Terms of a Lease		356
6.5 Rent Variation		357
6.6 Determination of New Rent		357
6.7 Payment of VAT		357
6.8 Costs Payable by a Tenant at the Start of a Lease		357
6.9 Payment of Maintenance and Repair		357
6.10 Payment of Utilities and Telecommunications		357
6.11 Insurance Issues		357
6.12 Restrictions on the Use of Real Estate		358
6.13 Tenant’s Ability to Alter and Improve Real Estate		358
6.14 Specific Regulations		358
6.15 Effect of the Tenant’s Insolvency		359
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		359
6.17 Right to Occupy After Termination or Expiry of a Lease		359
6.18 Right to Assign a Leasehold Interest		359
6.19 Right to Terminate a Lease		359
6.20 Registration Requirements		359
6.21 Forced Eviction		360
6.22 Termination by a Third Party		360
6.23 Remedies/Damages for Breach		360
7. Construction		360
7.1 Common Structures Used to Price Construction Projects		360
7.2 Assigning Responsibility for the Design and Construction of a Project		360
7.3 Management of Construction Risk		361
7.4 Management of Schedule-Related Risk		361
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		361
7.6 Liens or Encumbrances in the Event of Non-payment		362
7.7 Requirements Before Use or Inhabitation		362
8. Tax		362
8.1 VAT and Sales Tax		362
8.2 Mitigation of Tax Liability		362
8.3 Municipal Taxes		362
8.4 Income Tax Withholding for Foreign Investors		362
8.5 Tax Benefits		363
1. General		369
1.1 Main Sources of Law		369
1.2 Main Market Trends and Deals		369
1.3 Proposals for Reform		369
2. Sale and Purchase		370
2.1 Categories of Property Rights		370
2.2 Laws Applicable to Transfer of Title		371
2.3 Effecting Lawful and Proper Transfer of Title		371
2.4 Real Estate Due Diligence		371
2.5 Typical Representations and Warranties		371
2.6 Important Areas of Law for Investors		372
2.7 Soil Pollution or Environmental Contamination		372
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		373
2.9 Condemnation, Expropriation or Compulsory Purchase		373
2.10 Taxes Applicable to a Transaction		373
2.11 Legal Restrictions on Foreign Investors		374
3. Real Estate Finance		374
3.1 Financing Acquisitions of Commercial Real Estate		374
3.2 Typical Security Created by Commercial Investors		374
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		374
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		375
3.5 Legal Requirements Before an Entity Can Give Valid Security		375
3.6 Formalities When a Borrower Is in Default		375
3.7 Subordinating Existing Debt to Newly Created Debt		376
3.8 Lenders’ Liability Under Environmental Laws		376
3.9 Effects of a Borrower Becoming Insolvent		376
3.10 Taxes on Loans		376
4. Planning and Zoning		376
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		376
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		377
4.3 Regulatory Authorities		377
4.4 Obtaining Entitlements to Develop a New Project		378
4.5 Right of Appeal Against an Authority’s Decision		378
4.6 Agreements With Local or Governmental Authorities		379
4.7 Enforcement of Restrictions on Development and Designated Use		379
5. Investment Vehicles		380
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		380
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		380
5.3 REITs		381
5.4 Minimum Capital Requirement		382
5.5 Applicable Governance Requirements		382
5.6 Annual Entity Maintenance and Accounting Compliance		382
6. Commercial Leases		382
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		382
6.2 Types of Commercial Leases		383
6.3 Regulation of Rents or Lease Terms		383
6.4 Typical Terms of a Lease		384
6.5 Rent Variation		384
6.6 Determination of New Rent		384
6.7 Payment of VAT		384
6.8 Costs Payable by a Tenant at the Start of a Lease		384
6.9 Payment of Maintenance and Repair		384
6.10 Payment of Utilities and Telecommunications		385
6.11 Insurance Issues		385
6.12 Restrictions on the Use of Real Estate		385
6.13 Tenant’s Ability to Alter and Improve Real Estate		385
6.14 Specific Regulations		385
6.15 Effect of the Tenant’s Insolvency		386
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		386
6.17 Right to Occupy After Termination or Expiry of a Lease		386
6.18 Right to Assign a Leasehold Interest		386
6.19 Right to Terminate a Lease		386
6.20 Registration Requirements		387
6.21 Forced Eviction		387
6.22 Termination by a Third Party		387
6.23 Remedies/Damages for Breach		387
7. Construction		387
7.1 Common Structures Used to Price Construction Projects		387
7.2 Assigning Responsibility for the Design and Construction of a Project		388
7.3 Management of Construction Risk		388
7.4 Management of Schedule-Related Risk		388
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		388
7.6 Liens or Encumbrances in the Event of Non-payment		389
7.7 Requirements Before Use or Inhabitation		389
8. Tax		389
8.1 VAT and Sales Tax		389
8.2 Mitigation of Tax Liability		389
8.3 Municipal Taxes		389
8.4 Income Tax Withholding for Foreign Investors		389
8.5 Tax Benefits		390
1. General		396
1.1 Main Sources of Law		396
1.2 Main Market Trends and Deals		396
1.3 Proposals for Reform		397
2. Sale and Purchase		397
2.1 Categories of Property Rights		397
2.2 Laws Applicable to Transfer of Title		397
2.3 Effecting Lawful and Proper Transfer of Title		397
2.4 Real Estate Due Diligence		398
2.5 Typical Representations and Warranties		399
2.6 Important Areas of Law for Investors		399
2.7 Soil Pollution or Environmental Contamination		400
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		400
2.9 Condemnation, Expropriation or Compulsory Purchase		400
2.10 Taxes Applicable to a Transaction		400
2.11 Legal Restrictions on Foreign Investors		401
3. Real Estate Finance		402
3.1 Financing Acquisitions of Commercial Real Estate		402
3.2 Typical Security Created by Commercial Investors		402
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		402
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		402
3.5 Legal Requirements Before an Entity Can Give Valid Security		403
3.6 Formalities When a Borrower Is in Default		403
3.7 Subordinating Existing Debt to Newly Created Debt		404
3.8 Lenders’ Liability Under Environmental Laws		405
3.9 Effects of a Borrower Becoming Insolvent		405
3.10 Taxes on Loans		405
4. Planning and Zoning		405
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		405
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		405
4.3 Regulatory Authorities		406
4.4 Obtaining Entitlements to Develop a New Project		406
4.5 Right of Appeal Against an Authority’s Decision		406
4.6 Agreements With Local or Governmental Authorities		406
4.7 Enforcement of Restrictions on Development and Designated Use		407
5. Investment Vehicles		407
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		407
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		408
5.3 REITs		408
5.4 Minimum Capital Requirement		408
5.5 Applicable Governance Requirements		408
5.6 Annual Entity Maintenance and Accounting Compliance		409
6. Commercial Leases		409
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		409
6.2 Types of Commercial Leases		409
6.3 Regulation of Rents or Lease Terms		410
6.4 Typical Terms of a Lease		410
6.5 Rent Variation		410
6.6 Determination of New Rent		410
6.7 Payment of VAT		411
6.8 Costs Payable by a Tenant at the Start of a Lease		411
6.9 Payment of Maintenance and Repair		411
6.10 Payment of Utilities and Telecommunications		411
6.11 Insurance Issues		411
6.12 Restrictions on the Use of Real Estate		411
6.13 Tenant’s Ability to Alter and Improve Real Estate		411
6.14 Specific Regulations		411
6.15 Effect of the Tenant’s Insolvency		412
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		412
6.17 Right to Occupy After Termination or Expiry of a Lease		412
6.18 Right to Assign a Leasehold Interest		412
6.19 Right to Terminate a Lease		412
6.20 Registration Requirements		412
6.21 Forced Eviction		413
6.22 Termination by a Third Party		413
6.23 Remedies/Damages for Breach		413
7. Construction		413
7.1 Common Structures Used to Price Construction Projects		413
7.2 Assigning Responsibility for the Design and Construction of a Project		413
7.3 Management of Construction Risk		413
7.4 Management of Schedule-Related Risk		413
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		414
7.6 Liens or Encumbrances in the Event of Non-payment		414
7.7 Requirements Before Use or Inhabitation		414
8. Tax		414
8.1 VAT and Sales Tax		414
8.2 Mitigation of Tax Liability		415
8.3 Municipal Taxes		415
8.4 Income Tax Withholding for Foreign Investors		415
8.5 Tax Benefits		415
1. General		420
1.1 Main Sources of Law		420
1.2 Main Market Trends and Deals		420
1.3 Proposals for Reform		420
2. Sale and Purchase		421
2.1 Categories of Property Rights		421
2.2 Laws Applicable to Transfer of Title		421
2.3 Effecting Lawful and Proper Transfer of Title		421
2.4 Real Estate Due Diligence		422
2.5 Typical Representations and Warranties		422
2.6 Important Areas of Law for Investors		423
2.7 Soil Pollution or Environmental Contamination		423
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		423
2.9 Condemnation, Expropriation or Compulsory Purchase		423
2.10 Taxes Applicable to a Transaction		424
2.11 Legal Restrictions on Foreign Investors		424
3. Real Estate Finance		425
3.1 Financing Acquisitions of Commercial Real Estate		425
3.2 Typical Security Created by Commercial Investors		425
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		425
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		425
3.5 Legal Requirements Before an Entity Can Give Valid Security		425
3.6 Formalities When a Borrower Is in Default		426
3.7 Subordinating Existing Debt to Newly Created Debt		426
3.8 Lenders’ Liability Under Environmental Laws		426
3.9 Effects of a Borrower Becoming Insolvent		426
3.10 Taxes on Loans		427
4. Planning and Zoning		427
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		427
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		427
4.3 Regulatory Authorities		427
4.4 Obtaining Entitlements to Develop a New Project		428
4.5 Right of Appeal Against an Authority’s Decision		428
4.6 Agreements With Local or Governmental Authorities		428
4.7 Enforcement of Restrictions on Development and Designated Use		428
5. Investment Vehicles		429
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		429
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		429
5.3 REITs		429
5.4 Minimum Capital Requirement		429
5.5 Applicable Governance Requirements		430
5.6 Annual Entity Maintenance and Accounting Compliance		430
6. Commercial Leases		430
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		430
6.2 Types of Commercial Leases		430
6.3 Regulation of Rents or Lease Terms		430
6.4 Typical Terms of a Lease		431
6.5 Rent Variation		431
6.6 Determination of New Rent		431
6.7 Payment of VAT		431
6.8 Costs Payable by a Tenant at the Start of a Lease		431
6.9 Payment of Maintenance and Repair		431
6.10 Payment of Utilities and Telecommunications		431
6.11 Insurance Issues		432
6.12 Restrictions on the Use of Real Estate		432
6.13 Tenant’s Ability to Alter and Improve Real Estate		432
6.14 Specific Regulations		432
6.15 Effect of the Tenant’s Insolvency		432
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		433
6.17 Right to Occupy After Termination or Expiry of a Lease		433
6.18 Right to Assign a Leasehold Interest		433
6.19 Right to Terminate a Lease		433
6.20 Registration Requirements		433
6.21 Forced Eviction		434
6.22 Termination by a Third Party		434
6.23 Remedies/Damages for Breach		434
7. Construction		434
7.1 Common Structures Used to Price Construction Projects		434
7.2 Assigning Responsibility for the Design and Construction of a Project		434
7.3 Management of Construction Risk		434
7.4 Management of Schedule-Related Risk		435
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		435
7.6 Liens or Encumbrances in the Event of Non-payment		435
7.7 Requirements Before Use or Inhabitation		435
8. Tax		435
8.1 VAT and Sales Tax		435
8.2 Mitigation of Tax Liability		436
8.3 Municipal Taxes		436
8.4 Income Tax Withholding for Foreign Investors		436
8.5 Tax Benefits		437
1. General		448
1.1 Main Sources of Law		448
1.2 Main Market Trends and Deals		448
1.3 Proposals for Reform		450
2. Sale and Purchase		450
2.1 Categories of Property Rights		450
2.2 Laws Applicable to Transfer of Title		450
2.3 Effecting Lawful and Proper Transfer of Title		450
2.4 Real Estate Due Diligence		451
2.5 Typical Representations and Warranties		451
2.6 Important Areas of Law for Investors		452
2.7 Soil Pollution or Environmental Contamination		452
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		453
2.9 Condemnation, Expropriation or Compulsory Purchase		453
2.10 Taxes Applicable to a Transaction		453
2.11 Legal Restrictions on Foreign Investors		454
3. Real Estate Finance		455
3.1 Financing Acquisitions of Commercial Real Estate		455
3.2 Typical Security Created by Commercial Investors		455
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		455
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		456
3.5 Legal Requirements Before an Entity Can Give Valid Security		456
3.6 Formalities When a Borrower Is in Default		456
3.7 Subordinating Existing Debt to Newly Created Debt		457
3.8 Lenders’ Liability Under Environmental Laws		457
3.9 Effects of a Borrower Becoming Insolvent		457
3.10 Taxes on Loans		457
4. Planning and Zoning		458
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		458
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		458
4.3 Regulatory Authorities		458
4.4 Obtaining Entitlements to Develop a New Project		458
4.5 Right of Appeal Against an Authority’s Decision		459
4.6 Agreements With Local or Governmental Authorities		459
4.7 Enforcement of Restrictions on Development and Designated Use		459
5. Investment Vehicles		459
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		459
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		460
5.3 REITs		461
5.4 Minimum Capital Requirement		461
5.5 Applicable Governance Requirements		462
5.6 Annual Entity Maintenance and Accounting Compliance		462
6. Commercial Leases		462
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		462
6.2 Types of Commercial Leases		462
6.3 Regulation of Rents or Lease Terms		462
6.4 Typical Terms of a Lease		463
6.5 Rent Variation		463
6.6 Determination of New Rent		463
6.7 Payment of VAT		463
6.8 Costs Payable by a Tenant at the Start of a Lease		463
6.9 Payment of Maintenance and Repair		464
6.10 Payment of Utilities and Telecommunications		464
6.11 Insurance Issues		464
6.12 Restrictions on the Use of Real Estate		464
6.13 Tenant’s Ability to Alter and Improve Real Estate		464
6.14 Specific Regulations		464
6.15 Effect of the Tenant’s Insolvency		464
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		464
6.17 Right to Occupy After Termination or Expiry of a Lease		464
6.18 Right to Assign a Leasehold Interest		464
6.19 Right to Terminate a Lease		465
6.20 Registration Requirements		465
6.21 Forced Eviction		465
6.22 Termination by a Third Party		465
6.23 Remedies/Damages for Breach		465
7. Construction		465
7.1 Common Structures Used to Price Construction Projects		465
7.2 Assigning Responsibility for the Design and Construction of a Project		465
7.3 Management of Construction Risk		465
7.4 Management of Schedule-Related Risk		466
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		466
7.6 Liens or Encumbrances in the Event of Non-payment		466
7.7 Requirements Before Use or Inhabitation		466
8. Tax		466
8.1 VAT and Sales Tax		466
8.2 Mitigation of Tax Liability		466
8.3 Municipal Taxes		466
8.4 Income Tax Withholding for Foreign Investors		466
8.5 Tax Benefits		468
1. General		474
1.1 Main Sources of Law		474
1.2 Main Market Trends and Deals		474
1.3 Proposals for Reform		474
2. Sale and Purchase		475
2.1 Categories of Property Rights		475
2.2 Laws Applicable to Transfer of Title		475
2.3 Effecting Lawful and Proper Transfer of Title		475
2.4 Real Estate Due Diligence		476
2.5 Typical Representations and Warranties		476
2.6 Important Areas of Law for Investors		476
2.7 Soil Pollution or Environmental Contamination		477
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		477
2.9 Condemnation, Expropriation or Compulsory Purchase		477
2.10 Taxes Applicable to a Transaction		477
2.11 Legal Restrictions on Foreign Investors		478
3. Real Estate Finance		478
3.1 Financing Acquisitions of Commercial Real Estate		478
3.2 Typical Security Created by Commercial Investors		478
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		478
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		478
3.5 Legal Requirements Before an Entity Can Give Valid Security		478
3.6 Formalities When a Borrower Is in Default		479
3.7 Subordinating Existing Debt to Newly Created Debt		479
3.8 Lenders’ Liability Under Environmental Laws		479
3.9 Effects of a Borrower Becoming Insolvent		479
3.10 Taxes on Loans		479
4. Planning and Zoning		479
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		479
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		480
4.3 Regulatory Authorities		480
4.4 Obtaining Entitlements to Develop a New Project		480
4.5 Right of Appeal Against an Authority’s Decision		480
4.6 Agreements With Local or Governmental Authorities		480
4.7 Enforcement of Restrictions on Development and Designated Use		480
5. Investment Vehicles		480
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		480
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		481
5.3 REITs		481
5.4 Minimum Capital Requirement		482
5.5 Applicable Governance Requirements		482
5.6 Annual Entity Maintenance and Accounting Compliance		483
6. Commercial Leases		483
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		483
6.2 Types of Commercial Leases		483
6.3 Regulation of Rents or Lease Terms		484
6.4 Typical Terms of a Lease		484
6.5 Rent Variation		485
6.6 Determination of New Rent		485
6.7 Payment of VAT		485
6.8 Costs Payable by a Tenant at the Start of a Lease		485
6.9 Payment of Maintenance and Repair		486
6.10 Payment of Utilities and Telecommunications		486
6.11 Insurance Issues		486
6.12 Restrictions on the Use of Real Estate		486
6.13 Tenant’s Ability to Alter and Improve Real Estate		486
6.14 Specific Regulations		486
6.15 Effect of the Tenant’s Insolvency		486
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		487
6.17 Right to Occupy After Termination or Expiry of a Lease		487
6.18 Right to Assign a Leasehold Interest		487
6.19 Right to Terminate a Lease		487
6.20 Registration Requirements		487
6.21 Forced Eviction		488
6.22 Termination by a Third Party		488
6.23 Remedies/Damages for Breach		488
7. Construction		488
7.1 Common Structures Used to Price Construction Projects		488
7.2 Assigning Responsibility for the Design and Construction of a Project		488
7.3 Management of Construction Risk		489
7.4 Management of Schedule-Related Risk		489
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		489
7.6 Liens or Encumbrances in the Event of Non-payment		490
7.7 Requirements Before Use or Inhabitation		490
8. Tax		490
8.1 VAT and Sales Tax		490
8.2 Mitigation of Tax Liability		490
8.3 Municipal Taxes		491
8.4 Income Tax Withholding for Foreign Investors		491
8.5 Tax Benefits		491
1. General		504
1.1 Main Sources of Law		504
1.2 Main Market Trends and Deals		505
1.3 Proposals for Reform		506
2. Sale and Purchase		507
2.1 Categories of Property Rights		507
2.2 Laws Applicable to Transfer of Title		507
2.3 Effecting Lawful and Proper Transfer of Title		507
2.4 Real Estate Due Diligence		508
2.5 Typical Representations and Warranties		508
2.6 Important Areas of Law for Investors		509
2.7 Soil Pollution or Environmental Contamination		509
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		509
2.9 Condemnation, Expropriation or Compulsory Purchase		509
2.10 Taxes Applicable to a Transaction		510
2.11 Legal Restrictions on Foreign Investors		511
3. Real Estate Finance		511
3.1 Financing Acquisitions of Commercial Real Estate		511
3.2 Typical Security Created by Commercial Investors		511
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		512
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		512
3.5 Legal Requirements Before an Entity Can Give Valid Security		512
3.6 Formalities When a Borrower Is in Default		512
3.7 Subordinating Existing Debt to Newly Created Debt		513
3.8 Lenders’ Liability Under Environmental Laws		513
3.9 Effects of a Borrower Becoming Insolvent		513
3.10 Taxes on Loans		513
4. Planning and Zoning		514
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		514
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		514
4.3 Regulatory Authorities		514
4.4 Obtaining Entitlements to Develop a New Project		515
4.5 Right of Appeal Against an Authority’s Decision		515
4.6 Agreements With Local or Governmental Authorities		516
4.7 Enforcement of Restrictions on Development and Designated Use		516
5. Investment Vehicles		516
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		516
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		517
5.3 REITs		518
5.4 Minimum Capital Requirement		518
5.5 Applicable Governance Requirements		519
5.6 Annual Entity Maintenance and Accounting Compliance		519
6. Commercial Leases		520
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		520
6.2 Types of Commercial Leases		520
6.3 Regulation of Rents or Lease Terms		520
6.4 Typical Terms of a Lease		521
6.5 Rent Variation		521
6.6 Determination of New Rent		522
6.7 Payment of VAT		522
6.8 Costs Payable by a Tenant at the Start of a Lease		522
6.9 Payment of Maintenance and Repair		522
6.10 Payment of Utilities and Telecommunications		522
6.11 Insurance Issues		522
6.12 Restrictions on the Use of Real Estate		522
6.13 Tenant’s Ability to Alter and Improve Real Estate		523
6.14 Specific Regulations		523
6.15 Effect of the Tenant’s Insolvency		523
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		523
6.17 Right to Occupy After Termination or Expiry of a Lease		523
6.18 Right to Assign a Leasehold Interest		523
6.19 Right to Terminate a Lease		524
6.20 Registration Requirements		524
6.21 Forced Eviction		524
6.22 Termination by a Third Party		525
6.23 Remedies/Damages for Breach		525
7. Construction		525
7.1 Common Structures Used to Price Construction Projects		525
7.2 Assigning Responsibility for the Design and Construction of a Project		526
7.3 Management of Construction Risk		526
7.4 Management of Schedule-Related Risk		526
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		526
7.6 Liens or Encumbrances in the Event of Non-payment		526
7.7 Requirements Before Use or Inhabitation		527
8. Tax		527
8.1 VAT and Sales Tax		527
8.2 Mitigation of Tax Liability		527
8.3 Municipal Taxes		527
8.4 Income Tax Withholding for Foreign Investors		527
8.5 Tax Benefits		528
1. General		543
1.1 Main Sources of Law		543
1.2 Main Market Trends and Deals		543
1.3 Proposals for Reform		544
2. Sale and Purchase		544
2.1 Categories of Property Rights		544
2.2 Laws Applicable to Transfer of Title		545
2.3 Effecting Lawful and Proper Transfer of Title		545
2.4 Real Estate Due Diligence		545
2.5 Typical Representations and Warranties		546
2.6 Important Areas of Law for Investors		546
2.7 Soil Pollution or Environmental Contamination		546
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		546
2.9 Condemnation, Expropriation or Compulsory Purchase		547
2.10 Taxes Applicable to a Transaction		547
2.11 Legal Restrictions on Foreign Investors		547
3. Real Estate Finance		548
3.1 Financing Acquisitions of Commercial Real Estate		548
3.2 Typical Security Created by Commercial Investors		548
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		548
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		548
3.5 Legal Requirements Before an Entity Can Give Valid Security		549
3.6 Formalities When a Borrower Is in Default		549
3.7 Subordinating Existing Debt to Newly Created Debt		549
3.8 Lenders’ Liability Under Environmental Laws		550
3.9 Effects of a Borrower Becoming Insolvent		550
3.10 Taxes on Loans		550
4. Planning and Zoning		550
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		550
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		550
4.3 Regulatory Authorities		551
4.4 Obtaining Entitlements to Develop a New Project		551
4.5 Right of Appeal Against an Authority’s Decision		552
4.6 Agreements With Local or Governmental Authorities		552
4.7 Enforcement of Restrictions on Development and Designated Use		552
5. Investment Vehicles		552
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		552
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		552
5.3 REITs		553
5.4 Minimum Capital Requirement		553
5.5 Applicable Governance Requirements		553
5.6 Annual Entity Maintenance and Accounting Compliance		553
6. Commercial Leases		553
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		553
6.2 Types of Commercial Leases		553
6.3 Regulation of Rents or Lease Terms		553
6.4 Typical Terms of a Lease		554
6.5 Rent Variation		554
6.6 Determination of New Rent		554
6.7 Payment of VAT		554
6.8 Costs Payable by a Tenant at the Start of a Lease		554
6.9 Payment of Maintenance and Repair		554
6.10 Payment of Utilities and Telecommunications		555
6.11 Insurance Issues		555
6.12 Restrictions on the Use of Real Estate		555
6.13 Tenant’s Ability to Alter and Improve Real Estate		555
6.14 Specific Regulations		555
6.15 Effect of the Tenant’s Insolvency		555
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		555
6.17 Right to Occupy After Termination or Expiry of a Lease		555
6.18 Right to Assign a Leasehold Interest		556
6.19 Right to Terminate a Lease		556
6.20 Registration Requirements		557
6.21 Forced Eviction		557
6.22 Termination by a Third Party		557
6.23 Remedies/Damages for Breach		557
7. Construction		557
7.1 Common Structures Used to Price Construction Projects		557
7.2 Assigning Responsibility for the Design and Construction of a Project		558
7.3 Management of Construction Risk		558
7.4 Management of Schedule-Related Risk		558
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		558
7.6 Liens or Encumbrances in the Event of Non-payment		559
7.7 Requirements Before Use or Inhabitation		559
8. Tax		559
8.1 VAT and Sales Tax		559
8.2 Mitigation of Tax Liability		559
8.3 Municipal Taxes		559
8.4 Income Tax Withholding for Foreign Investors		560
8.5 Tax Benefits		560
1. General		566
1.1 Main Sources of Law		566
1.2 Main Market Trends and Deals		566
1.3 Proposals for Reform		567
2. Sale and Purchase		567
2.1 Categories of Property Rights		567
2.2 Laws Applicable to Transfer of Title		567
2.3 Effecting Lawful and Proper Transfer of Title		568
2.4 Real Estate Due Diligence		568
2.5 Typical Representations and Warranties		568
2.6 Important Areas of Law for Investors		568
2.7 Soil Pollution or Environmental Contamination		568
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		569
2.9 Condemnation, Expropriation or Compulsory Purchase		569
2.10 Taxes Applicable to a Transaction		569
2.11 Legal Restrictions on Foreign Investors		570
3. Real Estate Finance		570
3.1 Financing Acquisitions of Commercial Real Estate		570
3.2 Typical Security Created by Commercial Investors		570
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		570
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		571
3.5 Legal Requirements Before an Entity Can Give Valid Security		571
3.6 Formalities When a Borrower Is in Default		571
3.7 Subordinating Existing Debt to Newly Created Debt		572
3.8 Lenders’ Liability Under Environmental Laws		572
3.9 Effects of a Borrower Becoming Insolvent		572
3.10 Taxes on Loans		572
4. Planning and Zoning		572
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		572
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		572
4.3 Regulatory Authorities		573
4.4 Obtaining Entitlements to Develop a New Project		573
4.5 Right of Appeal Against an Authority’s Decision		573
4.6 Agreements With Local or Governmental Authorities		573
4.7 Enforcement of Restrictions on Development and Designated Use		573
5. Investment Vehicles		573
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		573
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		575
5.3 REITs		576
5.4 Minimum Capital Requirement		576
5.5 Applicable Governance Requirements		576
5.6 Annual Entity Maintenance and Accounting Compliance		579
6. Commercial Leases		579
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		579
6.2 Types of Commercial Leases		580
6.3 Regulation of Rents or Lease Terms		580
6.4 Typical Terms of a Lease		580
6.5 Rent Variation		580
6.6 Determination of New Rent		580
6.7 Payment of VAT		580
6.8 Costs Payable by a Tenant at the Start of a Lease		581
6.9 Payment of Maintenance and Repair		581
6.10 Payment of Utilities and Telecommunications		581
6.11 Insurance Issues		581
6.12 Restrictions on the Use of Real Estate		581
6.13 Tenant’s Ability to Alter and Improve Real Estate		581
6.14 Specific Regulations		582
6.15 Effect of the Tenant’s Insolvency		582
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		582
6.17 Right to Occupy After Termination or Expiry of a Lease		582
6.18 Right to Assign a Leasehold Interest		582
6.19 Right to Terminate a Lease		583
6.20 Registration Requirements		583
6.21 Forced Eviction		583
6.22 Termination by a Third Party		583
6.23 Remedies/Damages for Breach		583
7. Construction		583
7.1 Common Structures Used to Price Construction Projects		583
7.2 Assigning Responsibility for the Design and Construction of a Project		584
7.3 Management of Construction Risk		584
7.4 Management of Schedule-Related Risk		584
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		584
7.6 Liens or Encumbrances in the Event of Non-payment		584
7.7 Requirements Before Use or Inhabitation		585
8. Tax		585
8.1 VAT and Sales Tax		585
8.2 Mitigation of Tax Liability		585
8.3 Municipal Taxes		585
8.4 Income Tax Withholding for Foreign Investors		585
8.5 Tax Benefits		586
1. General		591
1.1 Main Sources of Law		591
1.2 Main Market Trends and Deals		591
1.3 Proposals for Reform		592
2. Sale and Purchase		593
2.1 Categories of Property Rights		593
2.2 Laws Applicable to Transfer of Title		593
2.3 Effecting Lawful and Proper Transfer of Title		593
2.4 Real Estate Due Diligence		594
2.5 Typical Representations and Warranties		594
2.6 Important Areas of Law for Investors		595
2.7 Soil Pollution or Environmental Contamination		595
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		596
2.9 Condemnation, Expropriation or Compulsory Purchase		596
2.10 Taxes Applicable to a Transaction		597
2.11 Legal Restrictions on Foreign Investors		598
3. Real Estate Finance		598
3.1 Financing Acquisitions of Commercial Real Estate		598
3.2 Typical Security Created by Commercial Investors		598
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		599
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		599
3.5 Legal Requirements Before an Entity Can Give Valid Security		599
3.6 Formalities When a Borrower Is in Default		599
3.7 Subordinating Existing Debt to Newly Created Debt		599
3.8 Lenders’ Liability Under Environmental Laws		600
3.9 Effects of a Borrower Becoming Insolvent		600
3.10 Taxes on Loans		600
4. Planning and Zoning		600
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		600
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		601
4.3 Regulatory Authorities		601
4.4 Obtaining Entitlements to Develop a New Project		601
4.5 Right of Appeal Against an Authority’s Decision		601
4.6 Agreements With Local or Governmental Authorities		601
4.7 Enforcement of Restrictions on Development and Designated Use		601
5. Investment Vehicles		602
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		602
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		602
5.3 REITs		602
5.4 Minimum Capital Requirement		602
5.5 Applicable Governance Requirements		602
5.6 Annual Entity Maintenance and Accounting Compliance		603
6. Commercial Leases		603
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		603
6.2 Types of Commercial Leases		604
6.3 Regulation of Rents or Lease Terms		604
6.4 Typical Terms of a Lease		604
6.5 Rent Variation		604
6.6 Determination of New Rent		604
6.7 Payment of VAT		604
6.8 Costs Payable by a Tenant at the Start of a Lease		604
6.9 Payment of Maintenance and Repair		604
6.10 Payment of Utilities and Telecommunications		605
6.11 Insurance Issues		605
6.12 Restrictions on the Use of Real Estate		605
6.13 Tenant’s Ability to Alter and Improve Real Estate		605
6.14 Specific Regulations		606
6.15 Effect of the Tenant’s Insolvency		606
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		606
6.17 Right to Occupy After Termination or Expiry of a Lease		606
6.18 Right to Assign a Leasehold Interest		607
6.19 Right to Terminate a Lease		607
6.20 Registration Requirements		607
6.21 Forced Eviction		607
6.22 Termination by a Third Party		607
6.23 Remedies/Damages for Breach		607
7. Construction		608
7.1 Common Structures Used to Price Construction Projects		608
7.2 Assigning Responsibility for the Design and Construction of a Project		608
7.3 Management of Construction Risk		608
7.4 Management of Schedule-Related Risk		608
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		609
7.6 Liens or Encumbrances in the Event of Non-payment		609
7.7 Requirements Before Use or Inhabitation		609
8. Tax		609
8.1 VAT and Sales Tax		609
8.2 Mitigation of Tax Liability		609
8.3 Municipal Taxes		609
8.4 Income Tax Withholding for Foreign Investors		610
8.5 Tax Benefits		610
1. General		616
1.1 Main Sources of Law		616
1.2 Main Market Trends and Deals		616
1.3 Proposals for Reform		617
2. Sale and Purchase		618
2.1 Categories of Property Rights		618
2.2 Laws Applicable to Transfer of Title		618
2.3 Effecting Lawful and Proper Transfer of Title		618
2.4 Real Estate Due Diligence		619
2.5 Typical Representations and Warranties		620
2.6 Important Areas of Law for Investors		620
2.7 Soil Pollution or Environmental Contamination		621
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		621
2.9 Condemnation, Expropriation or Compulsory Purchase		621
2.10 Taxes Applicable to a Transaction		622
2.11 Legal Restrictions on Foreign Investors		623
3. Real Estate Finance		623
3.1 Financing Acquisitions of Commercial Real Estate		623
3.2 Typical Security Created by Commercial Investors		623
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		623
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		624
3.5 Legal Requirements Before an Entity Can Give Valid Security		624
3.6 Formalities When a Borrower Is in Default		624
3.7 Subordinating Existing Debt to Newly Created Debt		624
3.8 Lenders’ Liability Under Environmental Laws		624
3.9 Effects of a Borrower Becoming Insolvent		624
3.10 Taxes on Loans		625
4. Planning and Zoning		625
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		625
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		625
4.3 Regulatory Authorities		625
4.4 Obtaining Entitlements to Develop a New Project		626
4.5 Right of Appeal Against an Authority’s Decision		626
4.6 Agreements With Local or Governmental Authorities		626
4.7 Enforcement of Restrictions on Development and Designated Use		626
5. Investment Vehicles		627
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		627
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		627
5.3 REITs		628
5.4 Minimum Capital Requirement		628
5.5 Applicable Governance Requirements		629
5.6 Annual Entity Maintenance and Accounting Compliance		629
6. Commercial Leases		629
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		629
6.2 Types of Commercial Leases		630
6.3 Regulation of Rents or Lease Terms		630
6.4 Typical Terms of a Lease		630
6.5 Rent Variation		631
6.6 Determination of New Rent		631
6.7 Payment of VAT		631
6.8 Costs Payable by a Tenant at the Start of a Lease		631
6.9 Payment of Maintenance and Repair		631
6.10 Payment of Utilities and Telecommunications		632
6.11 Insurance Issues		632
6.12 Restrictions on the Use of Real Estate		632
6.13 Tenant’s Ability to Alter and Improve Real Estate		632
6.14 Specific Regulations		632
6.15 Effect of the Tenant’s Insolvency		633
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		633
6.17 Right to Occupy After Termination or Expiry of a Lease		633
6.18 Right to Assign a Leasehold Interest		633
6.19 Right to Terminate a Lease		633
6.20 Registration Requirements		634
6.21 Forced Eviction		634
6.22 Termination by a Third Party		634
6.23 Remedies/Damages for Breach		634
7. Construction		635
7.1 Common Structures Used to Price Construction Projects		635
7.2 Assigning Responsibility for the Design and Construction of a Project		635
7.3 Management of Construction Risk		636
7.4 Management of Schedule-Related Risk		637
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		637
7.6 Liens or Encumbrances in the Event of Non-payment		637
7.7 Requirements Before Use or Inhabitation		637
8. Tax		637
8.1 VAT and Sales Tax		637
8.2 Mitigation of Tax Liability		638
8.3 Municipal Taxes		638
8.4 Income Tax Withholding for Foreign Investors		638
8.5 Tax Benefits		638
1. General		651
1.1 Main Sources of Law		651
1.2 Main Market Trends and Deals		651
1.3 Proposals for Reform		652
2. Sale and Purchase		652
2.1 Categories of Property Rights		652
2.2 Laws Applicable to Transfer of Title		653
2.3 Effecting Lawful and Proper Transfer of Title		654
2.4 Real Estate Due Diligence		654
2.5 Typical Representations and Warranties		654
2.6 Important Areas of Law for Investors		655
2.7 Soil Pollution or Environmental Contamination		655
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		655
2.9 Condemnation, Expropriation or Compulsory Purchase		655
2.10 Taxes Applicable to a Transaction		655
2.11 Legal Restrictions on Foreign Investors		656
3. Real Estate Finance		657
3.1 Financing Acquisitions of Commercial Real Estate		657
3.2 Typical Security Created by Commercial Investors		657
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		657
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		657
3.5 Legal Requirements Before an Entity Can Give Valid Security		658
3.6 Formalities When a Borrower Is in Default		658
3.7 Subordinating Existing Debt to Newly Created Debt		659
3.8 Lenders’ Liability Under Environmental Laws		659
3.9 Effects of a Borrower Becoming Insolvent		659
3.10 Taxes on Loans		659
4. Planning and Zoning		659
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		659
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		659
4.3 Regulatory Authorities		660
4.4 Obtaining Entitlements to Develop a New Project		660
4.5 Right of Appeal Against an Authority’s Decision		660
4.6 Agreements With Local or Governmental Authorities		660
4.7 Enforcement of Restrictions on Development and Designated Use		661
5. Investment Vehicles		661
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		661
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		661
5.3 REITs		662
5.4 Minimum Capital Requirement		663
5.5 Applicable Governance Requirements		663
5.6 Annual Entity Maintenance and Accounting Compliance		664
6. Commercial Leases		664
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		664
6.2 Types of Commercial Leases		664
6.3 Regulation of Rents or Lease Terms		665
6.4 Typical Terms of a Lease		665
6.5 Rent Variation		666
6.6 Determination of New Rent		666
6.7 Payment of VAT		666
6.8 Costs Payable by a Tenant at the Start of a Lease		667
6.9 Payment of Maintenance and Repair		667
6.10 Payment of Utilities and Telecommunications		667
6.11 Insurance Issues		667
6.12 Restrictions on the Use of Real Estate		667
6.13 Tenant’s Ability to Alter and Improve Real Estate		668
6.14 Specific Regulations		668
6.15 Effect of the Tenant’s Insolvency		668
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		668
6.17 Right to Occupy After Termination or Expiry of a Lease		668
6.18 Right to Assign a Leasehold Interest		668
6.19 Right to Terminate a Lease		669
6.20 Registration Requirements		669
6.21 Forced Eviction		669
6.22 Termination by a Third Party		669
6.23 Remedies/Damages for Breach		669
7. Construction		670
7.1 Common Structures Used to Price Construction Projects		670
7.2 Assigning Responsibility for the Design and Construction of a Project		670
7.3 Management of Construction Risk		670
7.4 Management of Schedule-Related Risk		671
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		671
7.6 Liens or Encumbrances in the Event of Non-payment		671
7.7 Requirements Before Use or Inhabitation		671
8. Tax		671
8.1 VAT and Sales Tax		671
8.2 Mitigation of Tax Liability		672
8.3 Municipal Taxes		672
8.4 Income Tax Withholding for Foreign Investors		673
8.5 Tax Benefits		674
1. General		680
1.1 Main Sources of Law		680
1.2 Main Market Trends and Deals		680
1.3 Proposals for Reform		680
2. Sale and Purchase		680
2.1 Categories of Property Rights		680
2.2 Laws Applicable to Transfer of Title		681
2.3 Effecting Lawful and Proper Transfer of Title		681
2.4 Real Estate Due Diligence		681
2.5 Typical Representations and Warranties		682
2.6 Important Areas of Law for Investors		682
2.7 Soil Pollution or Environmental Contamination		682
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		682
2.9 Condemnation, Expropriation or Compulsory Purchase		682
2.10 Taxes Applicable to a Transaction		683
2.11 Legal Restrictions on Foreign Investors		683
3. Real Estate Finance		683
3.1 Financing Acquisitions of Commercial Real Estate		683
3.2 Typical Security Created by Commercial Investors		683
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		684
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		684
3.5 Legal Requirements Before an Entity Can Give Valid Security		684
3.6 Formalities When a Borrower Is in Default		685
3.7 Subordinating Existing Debt to Newly Created Debt		685
3.8 Lenders’ Liability Under Environmental Laws		686
3.9 Effects of a Borrower Becoming Insolvent		686
3.10 Taxes on Loans		687
4. Planning and Zoning		687
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		687
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		687
4.3 Regulatory Authorities		688
4.4 Obtaining Entitlements to Develop a New Project		688
4.5 Right of Appeal Against an Authority’s Decision		688
4.6 Agreements With Local or Governmental Authorities		688
4.7 Enforcement of Restrictions on Development and Designated Use		688
5. Investment Vehicles		688
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		688
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		689
5.3 REITs		689
5.4 Minimum Capital Requirement		689
5.5 Applicable Governance Requirements		690
5.6 Annual Entity Maintenance and Accounting Compliance		691
6. Commercial Leases		691
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		691
6.2 Types of Commercial Leases		692
6.3 Regulation of Rents or Lease Terms		692
6.4 Typical Terms of a Lease		692
6.5 Rent Variation		692
6.6 Determination of New Rent		693
6.7 Payment of VAT		693
6.8 Costs Payable by a Tenant at the Start of a Lease		693
6.9 Payment of Maintenance and Repair		693
6.10 Payment of Utilities and Telecommunications		693
6.11 Insurance Issues		693
6.12 Restrictions on the Use of Real Estate		694
6.13 Tenant’s Ability to Alter and Improve Real Estate		694
6.14 Specific Regulations		694
6.15 Effect of the Tenant’s Insolvency		694
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		694
6.17 Right to Occupy After Termination or Expiry of a Lease		694
6.18 Right to Assign a Leasehold Interest		694
6.19 Right to Terminate a Lease		695
6.20 Registration Requirements		695
6.21 Forced Eviction		695
6.22 Termination by a Third Party		695
6.23 Remedies/Damages for Breach		695
7. Construction		695
7.1 Common Structures Used to Price Construction Projects		695
7.2 Assigning Responsibility for the Design and Construction of a Project		695
7.3 Management of Construction Risk		696
7.4 Management of Schedule-Related Risk		696
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		696
7.6 Liens or Encumbrances in the Event of Non-payment		696
7.7 Requirements Before Use or Inhabitation		696
8. Tax		696
8.1 VAT and Sales Tax		696
8.2 Mitigation of Tax Liability		697
8.3 Municipal Taxes		697
8.4 Income Tax Withholding for Foreign Investors		697
8.5 Tax Benefits		698
1. General		724
1.1 Main Sources of Law		724
1.2 Main Market Trends and Deals		724
1.3 Proposals for Reform		724
2. Sale and Purchase		725
2.1 Categories of Property Rights		725
2.2 Laws Applicable to Transfer of Title		725
2.3 Effecting Lawful and Proper Transfer of Title		725
2.4 Real Estate Due Diligence		725
2.5 Typical Representations and Warranties		725
2.6 Important Areas of Law for Investors		726
2.7 Soil Pollution or Environmental Contamination		726
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		726
2.9 Condemnation, Expropriation or Compulsory Purchase		726
2.10 Taxes Applicable to a Transaction		726
2.11 Legal Restrictions on Foreign Investors		727
3. Real Estate Finance		727
3.1 Financing Acquisitions of Commercial Real Estate		727
3.2 Typical Security Created by Commercial Investors		727
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		727
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		728
3.5 Legal Requirements Before an Entity Can Give Valid Security		728
3.6 Formalities When a Borrower Is in Default		728
3.7 Subordinating Existing Debt to Newly Created Debt		729
3.8 Lenders’ Liability Under Environmental Laws		729
3.9 Effects of a Borrower Becoming Insolvent		729
3.10 Taxes on Loans		729
4. Planning and Zoning		729
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		729
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		730
4.3 Regulatory Authorities		730
4.4 Obtaining Entitlements to Develop a New Project		731
4.5 Right of Appeal Against an Authority’s Decision		732
4.6 Agreements With Local or Governmental Authorities		732
4.7 Enforcement of Restrictions on Development and Designated Use		732
5. Investment Vehicles		733
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		733
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		733
5.3 REITs		733
5.4 Minimum Capital Requirement		734
5.5 Applicable Governance Requirements		734
5.6 Annual Entity Maintenance and Accounting Compliance		734
6. Commercial Leases		734
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		734
6.2 Types of Commercial Leases		734
6.3 Regulation of Rents or Lease Terms		734
6.4 Typical Terms of a Lease		734
6.5 Rent Variation		735
6.6 Determination of New Rent		735
6.7 Payment of VAT		735
6.8 Costs Payable by a Tenant at the Start of a Lease		735
6.9 Payment of Maintenance and Repair		735
6.10 Payment of Utilities and Telecommunications		735
6.11 Insurance Issues		735
6.12 Restrictions on the Use of Real Estate		735
6.13 Tenant’s Ability to Alter and Improve Real Estate		735
6.14 Specific Regulations		736
6.15 Effect of the Tenant’s Insolvency		736
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		736
6.17 Right to Occupy After Termination or Expiry of a Lease		736
6.18 Right to Assign a Leasehold Interest		736
6.19 Right to Terminate a Lease		736
6.20 Registration Requirements		737
6.21 Forced Eviction		737
6.22 Termination by a Third Party		738
6.23 Remedies/Damages for Breach		738
7. Construction		738
7.1 Common Structures Used to Price Construction Projects		738
7.2 Assigning Responsibility for the Design and Construction of a Project		738
7.3 Management of Construction Risk		739
7.4 Management of Schedule-Related Risk		739
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		739
7.6 Liens or Encumbrances in the Event of Non-payment		739
7.7 Requirements Before Use or Inhabitation		739
8. Tax		739
8.1 VAT and Sales Tax		739
8.2 Mitigation of Tax Liability		739
8.3 Municipal Taxes		740
8.4 Income Tax Withholding for Foreign Investors		740
8.5 Tax Benefits		740
1. General		746
1.1 Main Sources of Law		746
1.2 Main Market Trends and Deals		746
1.3 Proposals for Reform		747
2. Sale and Purchase		747
2.1 Categories of Property Rights		747
2.2 Laws Applicable to Transfer of Title		748
2.3 Effecting Lawful and Proper Transfer of Title		748
2.4 Real Estate Due Diligence		748
2.5 Typical Representations and Warranties		748
2.6 Important Areas of Law for Investors		749
2.7 Soil Pollution or Environmental Contamination		749
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		749
2.9 Condemnation, Expropriation or Compulsory Purchase		750
2.10 Taxes Applicable to a Transaction		750
2.11 Legal Restrictions on Foreign Investors		750
3. Real Estate Finance		750
3.1 Financing Acquisitions of Commercial Real Estate		750
3.2 Typical Security Created by Commercial Investors		750
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		751
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		751
3.5 Legal Requirements Before an Entity Can Give Valid Security		751
3.6 Formalities When a Borrower Is in Default		752
3.7 Subordinating Existing Debt to Newly Created Debt		752
3.8 Lenders’ Liability Under Environmental Laws		752
3.9 Effects of a Borrower Becoming Insolvent		752
3.10 Taxes on Loans		753
4. Planning and Zoning		753
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		753
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		753
4.3 Regulatory Authorities		754
4.4 Obtaining Entitlements to Develop a New Project		754
4.5 Right of Appeal Against an Authority’s Decision		755
4.6 Agreements With Local or Governmental Authorities		755
4.7 Enforcement of Restrictions on Development and Designated Use		755
5. Investment Vehicles		755
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		755
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		756
5.3 REITs		757
5.4 Minimum Capital Requirement		757
5.5 Applicable Governance Requirements		758
5.6 Annual Entity Maintenance and Accounting Compliance		758
6. Commercial Leases		759
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		759
6.2 Types of Commercial Leases		759
6.3 Regulation of Rents or Lease Terms		759
6.4 Typical Terms of a Lease		759
6.5 Rent Variation		760
6.6 Determination of New Rent		760
6.7 Payment of VAT		760
6.8 Costs Payable by a Tenant at the Start of a Lease		760
6.9 Payment of Maintenance and Repair		760
6.10 Payment of Utilities and Telecommunications		760
6.11 Insurance Issues		760
6.12 Restrictions on the Use of Real Estate		761
6.13 Tenant’s Ability to Alter and Improve Real Estate		761
6.14 Specific Regulations		761
6.15 Effect of the Tenant’s Insolvency		761
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		762
6.17 Right to Occupy After Termination or Expiry of a Lease		762
6.18 Right to Assign a Leasehold Interest		762
6.19 Right to Terminate a Lease		762
6.20 Registration Requirements		763
6.21 Forced Eviction		763
6.22 Termination by a Third Party		763
6.23 Remedies/Damages for Breach		763
7. Construction		763
7.1 Common Structures Used to Price Construction Projects		763
7.2 Assigning Responsibility for the Design and Construction of a Project		764
7.3 Management of Construction Risk		764
7.4 Management of Schedule-Related Risk		764
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		765
7.6 Liens or Encumbrances in the Event of Non-payment		765
7.7 Requirements Before Use or Inhabitation		765
8. Tax		765
8.1 VAT and Sales Tax		765
8.2 Mitigation of Tax Liability		766
8.3 Municipal Taxes		766
8.4 Income Tax Withholding for Foreign Investors		766
8.5 Tax Benefits		766
1. General		772
1.1 Main Sources of Law		772
1.2 Main Market Trends and Deals		772
1.3 Proposals for Reform		773
2. Sale and Purchase		773
2.1 Categories of Property Rights		773
2.2 Laws Applicable to Transfer of Title		774
2.3 Effecting Lawful and Proper Transfer of Title		774
2.4 Real Estate Due Diligence		774
2.5 Typical Representations and Warranties		774
2.6 Important Areas of Law for Investors		775
2.7 Soil Pollution or Environmental Contamination		775
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		776
2.9 Condemnation, Expropriation or Compulsory Purchase		776
2.10 Taxes Applicable to a Transaction		776
2.11 Legal Restrictions on Foreign Investors		778
3. Real Estate Finance		778
3.1 Financing Acquisitions of Commercial Real Estate		778
3.2 Typical Security Created by Commercial Investors		778
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		778
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		778
3.5 Legal Requirements Before an Entity Can Give Valid Security		778
3.6 Formalities When a Borrower Is in Default		779
3.7 Subordinating Existing Debt to Newly Created Debt		779
3.8 Lenders’ Liability Under Environmental Laws		780
3.9 Effects of a Borrower Becoming Insolvent		780
3.10 Taxes on Loans		780
4. Planning and Zoning		780
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		780
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		780
4.3 Regulatory Authorities		781
4.4 Obtaining Entitlements to Develop a New Project		781
4.5 Right of Appeal Against an Authority’s Decision		781
4.6 Agreements With Local or Governmental Authorities		782
4.7 Enforcement of Restrictions on Development and Designated Use		782
5. Investment Vehicles		782
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		782
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		782
5.3 REITs		782
5.4 Minimum Capital Requirement		783
5.5 Applicable Governance Requirements		783
5.6 Annual Entity Maintenance and Accounting Compliance		783
6. Commercial Leases		783
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		783
6.2 Types of Commercial Leases		783
6.3 Regulation of Rents or Lease Terms		783
6.4 Typical Terms of a Lease		783
6.5 Rent Variation		784
6.6 Determination of New Rent		784
6.7 Payment of VAT		784
6.8 Costs Payable by a Tenant at the Start of a Lease		784
6.9 Payment of Maintenance and Repair		784
6.10 Payment of Utilities and Telecommunications		784
6.11 Insurance Issues		784
6.12 Restrictions on the Use of Real Estate		784
6.13 Tenant’s Ability to Alter and Improve Real Estate		784
6.14 Specific Regulations		785
6.15 Effect of the Tenant’s Insolvency		785
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		785
6.17 Right to Occupy After Termination or Expiry of a Lease		785
6.18 Right to Assign a Leasehold Interest		785
6.19 Right to Terminate a Lease		786
6.20 Registration Requirements		786
6.21 Forced Eviction		786
6.22 Termination by a Third Party		786
6.23 Remedies/Damages for Breach		786
7. Construction		787
7.1 Common Structures Used to Price Construction Projects		787
7.2 Assigning Responsibility for the Design and Construction of a Project		787
7.3 Management of Construction Risk		788
7.4 Management of Schedule-Related Risk		789
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		789
7.6 Liens or Encumbrances in the Event of Non-payment		790
7.7 Requirements Before Use or Inhabitation		790
8. Tax		790
8.1 VAT and Sales Tax		790
8.2 Mitigation of Tax Liability		790
8.3 Municipal Taxes		790
8.4 Income Tax Withholding for Foreign Investors		790
8.5 Tax Benefits		791
1. General		800
1.1 Main Sources of Law		800
1.2 Main Market Trends and Deals		800
1.3 Proposals for Reform		801
2. Sale and Purchase		802
2.1 Categories of Property Rights		802
2.2 Laws Applicable to Transfer of Title		802
2.3 Effecting Lawful and Proper Transfer of Title		803
2.4 Real Estate Due Diligence		803
2.5 Typical Representations and Warranties		803
2.6 Important Areas of Law for Investors		804
2.7 Soil Pollution or Environmental Contamination		805
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		805
2.9 Condemnation, Expropriation or Compulsory Purchase		805
2.10 Taxes Applicable to a Transaction		805
2.11 Legal Restrictions on Foreign Investors		806
3. Real Estate Finance		806
3.1 Financing Acquisitions of Commercial Real Estate		806
3.2 Typical Security Created by Commercial Investors		806
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		806
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		807
3.5 Legal Requirements Before an Entity Can Give Valid Security		807
3.6 Formalities When a Borrower Is in Default		807
3.7 Subordinating Existing Debt to Newly Created Debt		808
3.8 Lenders’ Liability Under Environmental Laws		808
3.9 Effects of a Borrower Becoming Insolvent		808
3.10 Taxes on Loans		809
4. Planning and Zoning		809
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		809
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		809
4.3 Regulatory Authorities		810
4.4 Obtaining Entitlements to Develop a New Project		810
4.5 Right of Appeal Against an Authority’s Decision		810
4.6 Agreements With Local or Governmental Authorities		810
4.7 Enforcement of Restrictions on Development and Designated Use		810
5. Investment Vehicles		811
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		811
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		811
5.3 REITs		811
5.4 Minimum Capital Requirement		811
5.5 Applicable Governance Requirements		811
5.6 Annual Entity Maintenance and Accounting Compliance		811
6. Commercial Leases		812
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		812
6.2 Types of Commercial Leases		812
6.3 Regulation of Rents or Lease Terms		812
6.4 Typical Terms of a Lease		812
6.5 Rent Variation		813
6.6 Determination of New Rent		813
6.7 Payment of VAT		813
6.8 Costs Payable by a Tenant at the Start of a Lease		813
6.9 Payment of Maintenance and Repair		813
6.10 Payment of Utilities and Telecommunications		813
6.11 Insurance Issues		814
6.12 Restrictions on the Use of Real Estate		814
6.13 Tenant’s Ability to Alter and Improve Real Estate		814
6.14 Specific Regulations		814
6.15 Effect of the Tenant’s Insolvency		814
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		815
6.17 Right to Occupy After Termination or Expiry of a Lease		815
6.18 Right to Assign a Leasehold Interest		815
6.19 Right to Terminate a Lease		815
6.20 Registration Requirements		816
6.21 Forced Eviction		816
6.22 Termination by a Third Party		816
6.23 Remedies/Damages for Breach		816
7. Construction		817
7.1 Common Structures Used to Price Construction Projects		817
7.2 Assigning Responsibility for the Design and Construction of a Project		817
7.3 Management of Construction Risk		817
7.4 Management of Schedule-Related Risk		818
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		818
7.6 Liens or Encumbrances in the Event of Non-payment		818
7.7 Requirements Before Use or Inhabitation		818
8. Tax		818
8.1 VAT and Sales Tax		818
8.2 Mitigation of Tax Liability		819
8.3 Municipal Taxes		819
8.4 Income Tax Withholding for Foreign Investors		819
8.5 Tax Benefits		820
1. General		826
1.1 Main Sources of Law		826
1.2 Main Market Trends and Deals		826
1.3 Proposals for Reform		827
2. Sale and Purchase		827
2.1 Categories of Property Rights		827
2.2 Laws Applicable to Transfer of Title		827
2.3 Effecting Lawful and Proper Transfer of Title		827
2.4 Real Estate Due Diligence		828
2.5 Typical Representations and Warranties		828
2.6 Important Areas of Law for Investors		828
2.7 Soil Pollution or Environmental Contamination		828
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		828
2.9 Condemnation, Expropriation or Compulsory Purchase		829
2.10 Taxes Applicable to a Transaction		829
2.11 Legal Restrictions on Foreign Investors		830
3. Real Estate Finance		830
3.1 Financing Acquisitions of Commercial Real Estate		830
3.2 Typical Security Created by Commercial Investors		830
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		830
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		831
3.5 Legal Requirements Before an Entity Can Give Valid Security		831
3.6 Formalities When a Borrower Is in Default		831
3.7 Subordinating Existing Debt to Newly Created Debt		832
3.8 Lenders’ Liability Under Environmental Laws		832
3.9 Effects of a Borrower Becoming Insolvent		832
3.10 Taxes on Loans		833
4. Planning and Zoning		833
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		833
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		833
4.3 Regulatory Authorities		833
4.4 Obtaining Entitlements to Develop a New Project		834
4.5 Right of Appeal Against an Authority’s Decision		834
4.6 Agreements With Local or Governmental Authorities		834
4.7 Enforcement of Restrictions on Development and Designated Use		834
5. Investment Vehicles		835
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		835
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		835
5.3 REITs		836
5.4 Minimum Capital Requirement		836
5.5 Applicable Governance Requirements		836
5.6 Annual Entity Maintenance and Accounting Compliance		838
6. Commercial Leases		838
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		838
6.2 Types of Commercial Leases		838
6.3 Regulation of Rents or Lease Terms		838
6.4 Typical Terms of a Lease		839
6.5 Rent Variation		839
6.6 Determination of New Rent		839
6.7 Payment of VAT		839
6.8 Costs Payable by a Tenant at the Start of a Lease		840
6.9 Payment of Maintenance and Repair		840
6.10 Payment of Utilities and Telecommunications		840
6.11 Insurance Issues		840
6.12 Restrictions on the Use of Real Estate		840
6.13 Tenant’s Ability to Alter and Improve Real Estate		840
6.14 Specific Regulations		840
6.15 Effect of the Tenant’s Insolvency		841
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		841
6.17 Right to Occupy After Termination or Expiry of a Lease		841
6.18 Right to Assign a Leasehold Interest		841
6.19 Right to Terminate a Lease		841
6.20 Registration Requirements		841
6.21 Forced Eviction		841
6.22 Termination by a Third Party		842
6.23 Remedies/Damages for Breach		842
7. Construction		842
7.1 Common Structures Used to Price Construction Projects		842
7.2 Assigning Responsibility for the Design and Construction of a Project		842
7.3 Management of Construction Risk		843
7.4 Management of Schedule-Related Risk		843
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		843
7.6 Liens or Encumbrances in the Event of Non-payment		844
7.7 Requirements Before Use or Inhabitation		845
8. Tax		845
8.1 VAT and Sales Tax		845
8.2 Mitigation of Tax Liability		845
8.3 Municipal Taxes		845
8.4 Income Tax Withholding for Foreign Investors		845
8.5 Tax Benefits		846
1. General		852
1.1 Main Sources of Law		852
1.2 Main Market Trends and Deals		852
1.3 Proposals for Reform		853
2. Sale and Purchase		853
2.1 Categories of Property Rights		853
2.2 Laws Applicable to Transfer of Title		853
2.3 Effecting Lawful and Proper Transfer of Title		853
2.4 Real Estate Due Diligence		854
2.5 Typical Representations and Warranties		854
2.6 Important Areas of Law for Investors		855
2.7 Soil Pollution or Environmental Contamination		855
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		855
2.9 Condemnation, Expropriation or Compulsory Purchase		855
2.10 Taxes Applicable to a Transaction		855
2.11 Legal Restrictions on Foreign Investors		856
3. Real Estate Finance		857
3.1 Financing Acquisitions of Commercial Real Estate		857
3.2 Typical Security Created by Commercial Investors		857
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		857
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		858
3.5 Legal Requirements Before an Entity Can Give Valid Security		858
3.6 Formalities When a Borrower Is in Default		858
3.7 Subordinating Existing Debt to Newly Created Debt		858
3.8 Lenders’ Liability Under Environmental Laws		859
3.9 Effects of a Borrower Becoming Insolvent		859
3.10 Taxes on Loans		859
4. Planning and Zoning		859
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		859
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		860
4.3 Regulatory Authorities		860
4.4 Obtaining Entitlements to Develop a New Project		860
4.5 Right of Appeal Against an Authority’s Decision		860
4.6 Agreements With Local or Governmental Authorities		861
4.7 Enforcement of Restrictions on Development and Designated Use		861
5. Investment Vehicles		861
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		861
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		862
5.3 REITs		862
5.4 Minimum Capital Requirement		863
5.5 Applicable Governance Requirements		863
5.6 Annual Entity Maintenance and Accounting Compliance		863
6. Commercial Leases		864
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		864
6.2 Types of Commercial Leases		864
6.3 Regulation of Rents or Lease Terms		864
6.4 Typical Terms of a Lease		865
6.5 Rent Variation		865
6.6 Determination of New Rent		865
6.7 Payment of VAT		866
6.8 Costs Payable by a Tenant at the Start of a Lease		866
6.9 Payment of Maintenance and Repair		866
6.10 Payment of Utilities and Telecommunications		867
6.11 Insurance Issues		867
6.12 Restrictions on the Use of Real Estate		867
6.13 Tenant’s Ability to Alter and Improve Real Estate		867
6.14 Specific Regulations		867
6.15 Effect of the Tenant’s Insolvency		867
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		867
6.17 Right to Occupy After Termination or Expiry of a Lease		868
6.18 Right to Assign a Leasehold Interest		868
6.19 Right to Terminate a Lease		868
6.20 Registration Requirements		868
6.21 Forced Eviction		869
6.22 Termination by a Third Party		869
6.23 Remedies/Damages for Breach		869
7. Construction		869
7.1 Common Structures Used to Price Construction Projects		869
7.2 Assigning Responsibility for the Design and Construction of a Project		869
7.3 Management of Construction Risk		870
7.4 Management of Schedule-Related Risk		870
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		870
7.6 Liens or Encumbrances in the Event of Non-payment		871
7.7 Requirements Before Use or Inhabitation		871
8. Tax		871
8.1 VAT and Sales Tax		871
8.2 Mitigation of Tax Liability		871
8.3 Municipal Taxes		871
8.4 Income Tax Withholding for Foreign Investors		871
8.5 Tax Benefits		872
1. General		877
1.1 Main Sources of Law		877
1.2 Main Market Trends and Deals		877
1.3 Proposals for Reform		879
2. Sale and Purchase		879
2.1 Categories of Property Rights		879
2.2 Laws Applicable to Transfer of Title		880
2.3 Effecting Lawful and Proper Transfer of Title		880
2.4 Real Estate Due Diligence		881
2.5 Typical Representations and Warranties		881
2.6 Important Areas of Law for Investors		881
2.7 Soil Pollution or Environmental Contamination		882
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		882
2.9 Condemnation, Expropriation or Compulsory Purchase		882
2.10 Taxes Applicable to a Transaction		883
2.11 Legal Restrictions on Foreign Investors		883
3. Real Estate Finance		883
3.1 Financing Acquisitions of Commercial Real Estate		883
3.2 Typical Security Created by Commercial Investors		883
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		884
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		884
3.5 Legal Requirements Before an Entity Can Give Valid Security		884
3.6 Formalities When a Borrower Is in Default		884
3.7 Subordinating Existing Debt to Newly Created Debt		885
3.8 Lenders’ Liability Under Environmental Laws		885
3.9 Effects of a Borrower Becoming Insolvent		885
3.10 Taxes on Loans		885
4. Planning and Zoning		885
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		885
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		885
4.3 Regulatory Authorities		885
4.4 Obtaining Entitlements to Develop a New Project		886
4.5 Right of Appeal Against an Authority’s Decision		886
4.6 Agreements With Local or Governmental Authorities		886
4.7 Enforcement of Restrictions on Development and Designated Use		886
5. Investment Vehicles		886
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		886
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		886
5.3 REITs		887
5.4 Minimum Capital Requirement		887
5.5 Applicable Governance Requirements		887
5.6 Annual Entity Maintenance and Accounting Compliance		887
6. Commercial Leases		887
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		887
6.2 Types of Commercial Leases		887
6.3 Regulation of Rents or Lease Terms		888
6.4 Typical Terms of a Lease		889
6.5 Rent Variation		889
6.6 Determination of New Rent		889
6.7 Payment of VAT		889
6.8 Costs Payable by a Tenant at the Start of a Lease		889
6.9 Payment of Maintenance and Repair		889
6.10 Payment of Utilities and Telecommunications		890
6.11 Insurance Issues		890
6.12 Restrictions on the Use of Real Estate		890
6.13 Tenant’s Ability to Alter and Improve Real Estate		890
6.14 Specific Regulations		890
6.15 Effect of the Tenant’s Insolvency		891
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		891
6.17 Right to Occupy After Termination or Expiry of a Lease		891
6.18 Right to Assign a Leasehold Interest		891
6.19 Right to Terminate a Lease		892
6.20 Registration Requirements		892
6.21 Forced Eviction		892
6.22 Termination by a Third Party		894
6.23 Remedies/Damages for Breach		894
7. Construction		895
7.1 Common Structures Used to Price Construction Projects		895
7.2 Assigning Responsibility for the Design and Construction of a Project		895
7.3 Management of Construction Risk		895
7.4 Management of Schedule-Related Risk		896
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		896
7.6 Liens or Encumbrances in the Event of Non-payment		896
7.7 Requirements Before Use or Inhabitation		896
8. Tax		896
8.1 VAT and Sales Tax		896
8.2 Mitigation of Tax Liability		896
8.3 Municipal Taxes		897
8.4 Income Tax Withholding for Foreign Investors		897
8.5 Tax Benefits		897
1. General		909
1.1 Main Sources of Law		909
1.2 Main Market Trends and Deals		909
1.3 Proposals for Reform		909
2. Sale and Purchase		909
2.1 Categories of Property Rights		909
2.2 Laws Applicable to Transfer of Title		909
2.3 Effecting Lawful and Proper Transfer of Title		909
2.4 Real Estate Due Diligence		909
2.5 Typical Representations and Warranties		910
2.6 Important Areas of Law for Investors		910
2.7 Soil Pollution or Environmental Contamination		910
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		910
2.9 Condemnation, Expropriation or Compulsory Purchase		910
2.10 Taxes Applicable to a Transaction		910
2.11 Legal Restrictions on Foreign Investors		911
3. Real Estate Finance		911
3.1 Financing Acquisitions of Commercial Real Estate		911
3.2 Typical Security Created by Commercial Investors		911
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		911
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		912
3.5 Legal Requirements Before an Entity Can Give Valid Security		912
3.6 Formalities When a Borrower Is in Default		912
3.7 Subordinating Existing Debt to Newly Created Debt		912
3.8 Lenders’ Liability Under Environmental Laws		913
3.9 Effects of a Borrower Becoming Insolvent		913
3.10 Taxes on Loans		913
4. Planning and Zoning		913
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		913
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		913
4.3 Regulatory Authorities		913
4.4 Obtaining Entitlements to Develop a New Project		914
4.5 Right of Appeal Against an Authority’s Decision		914
4.6 Agreements With Local or Governmental Authorities		914
4.7 Enforcement of Restrictions on Development and Designated Use		914
5. Investment Vehicles		914
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		914
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		914
5.3 REITs		915
5.4 Minimum Capital Requirement		915
5.5 Applicable Governance Requirements		915
5.6 Annual Entity Maintenance and Accounting Compliance		915
6. Commercial Leases		915
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		915
6.2 Types of Commercial Leases		915
6.3 Regulation of Rents or Lease Terms		916
6.4 Typical Terms of a Lease		916
6.5 Rent Variation		916
6.6 Determination of New Rent		916
6.7 Payment of VAT		916
6.8 Costs Payable by a Tenant at the Start of a Lease		916
6.9 Payment of Maintenance and Repair		916
6.10 Payment of Utilities and Telecommunications		916
6.11 Insurance Issues		917
6.12 Restrictions on the Use of Real Estate		917
6.13 Tenant’s Ability to Alter and Improve Real Estate		917
6.14 Specific Regulations		917
6.15 Effect of the Tenant’s Insolvency		917
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		917
6.17 Right to Occupy After Termination or Expiry of a Lease		917
6.18 Right to Assign a Leasehold Interest		918
6.19 Right to Terminate a Lease		918
6.20 Registration Requirements		918
6.21 Forced Eviction		918
6.22 Termination by a Third Party		918
6.23 Remedies/Damages for Breach		918
7. Construction		919
7.1 Common Structures Used to Price Construction Projects		919
7.2 Assigning Responsibility for the Design and Construction of a Project		919
7.3 Management of Construction Risk		919
7.4 Management of Schedule-Related Risk		919
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		920
7.6 Liens or Encumbrances in the Event of Non-payment		920
7.7 Requirements Before Use or Inhabitation		920
8. Tax		920
8.1 VAT and Sales Tax		920
8.2 Mitigation of Tax Liability		921
8.3 Municipal Taxes		921
8.4 Income Tax Withholding for Foreign Investors		921
8.5 Tax Benefits		923
1. General		936
1.1 Main Sources of Law		936
1.2 Main Market Trends and Deals		936
1.3 Proposals for Reform		937
2. Sale and Purchase		937
2.1 Categories of Property Rights		937
2.2 Laws Applicable to Transfer of Title		938
2.3 Effecting Lawful and Proper Transfer of Title		938
2.4 Real Estate Due Diligence		938
2.5 Typical Representations and Warranties		939
2.6 Important Areas of Law for Investors		939
2.7 Soil Pollution or Environmental Contamination		940
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		940
2.9 Condemnation, Expropriation or Compulsory Purchase		941
2.10 Taxes Applicable to a Transaction		941
2.11 Legal Restrictions on Foreign Investors		942
3. Real Estate Finance		942
3.1 Financing Acquisitions of Commercial Real Estate		942
3.2 Typical Security Created by Commercial Investors		942
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		943
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		943
3.5 Legal Requirements Before an Entity Can Give Valid Security		943
3.6 Formalities When a Borrower Is in Default		944
3.7 Subordinating Existing Debt to Newly Created Debt		944
3.8 Lenders’ Liability Under Environmental Laws		944
3.9 Effects of a Borrower Becoming Insolvent		944
3.10 Taxes on Loans		945
4. Planning and Zoning		945
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		945
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		945
4.3 Regulatory Authorities		945
4.4 Obtaining Entitlements to Develop a New Project		945
4.5 Right of Appeal Against an Authority’s Decision		945
4.6 Agreements With Local or Governmental Authorities		946
4.7 Enforcement of Restrictions on Development and Designated Use		946
5. Investment Vehicles		946
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		946
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		947
5.3 REITs		947
5.4 Minimum Capital Requirement		947
5.5 Applicable Governance Requirements		947
5.6 Annual Entity Maintenance and Accounting Compliance		948
6. Commercial Leases		948
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		948
6.2 Types of Commercial Leases		949
6.3 Regulation of Rents or Lease Terms		949
6.4 Typical Terms of a Lease		950
6.5 Rent Variation		950
6.6 Determination of New Rent		950
6.7 Payment of VAT		951
6.8 Costs Payable by a Tenant at the Start of a Lease		951
6.9 Payment of Maintenance and Repair		951
6.10 Payment of Utilities and Telecommunications		951
6.11 Insurance Issues		951
6.12 Restrictions on the Use of Real Estate		951
6.13 Tenant’s Ability to Alter and Improve Real Estate		951
6.14 Specific Regulations		952
6.15 Effect of the Tenant’s Insolvency		952
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		952
6.17 Right to Occupy After Termination or Expiry of a Lease		952
6.18 Right to Assign a Leasehold Interest		952
6.19 Right to Terminate a Lease		952
6.20 Registration Requirements		953
6.21 Forced Eviction		953
6.22 Termination by a Third Party		953
6.23 Remedies/Damages for Breach		954
7. Construction		954
7.1 Common Structures Used to Price Construction Projects		954
7.2 Assigning Responsibility for the Design and Construction of a Project		954
7.3 Management of Construction Risk		954
7.4 Management of Schedule-Related Risk		954
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		955
7.6 Liens or Encumbrances in the Event of Non-payment		955
7.7 Requirements Before Use or Inhabitation		955
8. Tax		955
8.1 VAT and Sales Tax		955
8.2 Mitigation of Tax Liability		956
8.3 Municipal Taxes		956
8.4 Income Tax Withholding for Foreign Investors		956
8.5 Tax Benefits		957
1. General		962
1.1 Main Sources of Law		962
1.2 Main Market Trends and Deals		962
1.3 Proposals for Reform		963
2. Sale and Purchase		963
2.1 Categories of Property Rights		963
2.2 Laws Applicable to Transfer of Title		963
2.3 Effecting Lawful and Proper Transfer of Title		964
2.4 Real Estate Due Diligence		964
2.5 Typical Representations and Warranties		965
2.6 Important Areas of Law for Investors		965
2.7 Soil Pollution or Environmental Contamination		965
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		966
2.9 Condemnation, Expropriation or Compulsory Purchase		966
2.10 Taxes Applicable to a Transaction		967
2.11 Legal Restrictions on Foreign Investors		967
3. Real Estate Finance		968
3.1 Financing Acquisitions of Commercial Real Estate		968
3.2 Typical Security Created by Commercial Investors		969
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		969
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		970
3.5 Legal Requirements Before an Entity Can Give Valid Security		970
3.6 Formalities When a Borrower Is in Default		970
3.7 Subordinating Existing Debt to Newly Created Debt		971
3.8 Lenders’ Liability Under Environmental Laws		971
3.9 Effects of a Borrower Becoming Insolvent		971
3.10 Taxes on Loans		972
4. Planning and Zoning		972
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		972
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		973
4.3 Regulatory Authorities		973
4.4 Obtaining Entitlements to Develop a New Project		973
4.5 Right of Appeal Against an Authority’s Decision		974
4.6 Agreements With Local or Governmental Authorities		974
4.7 Enforcement of Restrictions on Development and Designated Use		975
5. Investment Vehicles		975
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		975
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		975
5.3 REITs		976
5.4 Minimum Capital Requirement		976
5.5 Applicable Governance Requirements		976
5.6 Annual Entity Maintenance and Accounting Compliance		976
6. Commercial Leases		976
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		976
6.2 Types of Commercial Leases		977
6.3 Regulation of Rents or Lease Terms		977
6.4 Typical Terms of a Lease		977
6.5 Rent Variation		977
6.6 Determination of New Rent		977
6.7 Payment of VAT		977
6.8 Costs Payable by a Tenant at the Start of a Lease		978
6.9 Payment of Maintenance and Repair		978
6.10 Payment of Utilities and Telecommunications		978
6.11 Insurance Issues		978
6.12 Restrictions on the Use of Real Estate		978
6.13 Tenant’s Ability to Alter and Improve Real Estate		979
6.14 Specific Regulations		979
6.15 Effect of the Tenant’s Insolvency		979
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		979
6.17 Right to Occupy After Termination or Expiry of a Lease		979
6.18 Right to Assign a Leasehold Interest		980
6.19 Right to Terminate a Lease		980
6.20 Registration Requirements		980
6.21 Forced Eviction		980
6.22 Termination by a Third Party		980
6.23 Remedies/Damages for Breach		980
7. Construction		980
7.1 Common Structures Used to Price Construction Projects		980
7.2 Assigning Responsibility for the Design and Construction of a Project		981
7.3 Management of Construction Risk		981
7.4 Management of Schedule-Related Risk		981
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		981
7.6 Liens or Encumbrances in the Event of Non-payment		981
7.7 Requirements Before Use or Inhabitation		981
8. Tax		981
8.1 VAT and Sales Tax		981
8.2 Mitigation of Tax Liability		981
8.3 Municipal Taxes		982
8.4 Income Tax Withholding for Foreign Investors		982
8.5 Tax Benefits		982
1. General		992
1.1 Main Sources of Law		992
1.2 Main Market Trends and Deals		992
1.3 Proposals for Reform		994
2. Sale and Purchase		995
2.1 Categories of Property Rights		995
2.2 Laws Applicable to Transfer of Title		996
2.3 Effecting Lawful and Proper Transfer of Title		996
2.4 Real Estate Due Diligence		996
2.5 Typical Representations and Warranties		996
2.6 Important Areas of Law for Investors		997
2.7 Soil Pollution or Environmental Contamination		997
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		997
2.9 Condemnation, Expropriation or Compulsory Purchase		998
2.10 Taxes Applicable to a Transaction		998
2.11 Legal Restrictions on Foreign Investors		998
3. Real Estate Finance		999
3.1 Financing Acquisitions of Commercial Real Estate		999
3.2 Typical Security Created by Commercial Investors		999
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		999
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		1000
3.5 Legal Requirements Before an Entity Can Give Valid Security		1000
3.6 Formalities When a Borrower Is in Default		1000
3.7 Subordinating Existing Debt to Newly Created Debt		1000
3.8 Lenders’ Liability Under Environmental Laws		1000
3.9 Effects of a Borrower Becoming Insolvent		1001
3.10 Taxes on Loans		1001
4. Planning and Zoning		1001
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		1001
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		1002
4.3 Regulatory Authorities		1002
4.4 Obtaining Entitlements to Develop a New Project		1002
4.5 Right of Appeal Against an Authority’s Decision		1002
4.6 Agreements With Local or Governmental Authorities		1003
4.7 Enforcement of Restrictions on Development and Designated Use		1003
5. Investment Vehicles		1003
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		1003
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		1003
5.3 REITs		1003
5.4 Minimum Capital Requirement		1003
5.5 Applicable Governance Requirements		1004
5.6 Annual Entity Maintenance and Accounting Compliance		1004
6. Commercial Leases		1004
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		1004
6.2 Types of Commercial Leases		1004
6.3 Regulation of Rents or Lease Terms		1005
6.4 Typical Terms of a Lease		1005
6.5 Rent Variation		1005
6.6 Determination of New Rent		1006
6.7 Payment of VAT		1006
6.8 Costs Payable by a Tenant at the Start of a Lease		1006
6.9 Payment of Maintenance and Repair		1006
6.10 Payment of Utilities and Telecommunications		1006
6.11 Insurance Issues		1006
6.12 Restrictions on the Use of Real Estate		1006
6.13 Tenant’s Ability to Alter and Improve Real Estate		1007
6.14 Specific Regulations		1007
6.15 Effect of the Tenant’s Insolvency		1007
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		1007
6.17 Right to Occupy After Termination or Expiry of a Lease		1007
6.18 Right to Assign a Leasehold Interest		1007
6.19 Right to Terminate a Lease		1007
6.20 Registration Requirements		1008
6.21 Forced Eviction		1008
6.22 Termination by a Third Party		1008
6.23 Remedies/Damages for Breach		1009
7. Construction		1009
7.1 Common Structures Used to Price Construction Projects		1009
7.2 Assigning Responsibility for the Design and Construction of a Project		1009
7.3 Management of Construction Risk		1009
7.4 Management of Schedule-Related Risk		1010
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		1010
7.6 Liens or Encumbrances in the Event of Non-payment		1010
7.7 Requirements Before Use or Inhabitation		1010
8. Tax		1010
8.1 VAT and Sales Tax		1010
8.2 Mitigation of Tax Liability		1010
8.3 Municipal Taxes		1010
8.4 Income Tax Withholding for Foreign Investors		1011
8.5 Tax Benefits		1011
1. General		1016
1.1 Main Sources of Law		1016
1.2 Main Market Trends and Deals		1016
1.3 Proposals for Reform		1017
2. Sale and Purchase		1017
2.1 Categories of Property Rights		1017
2.2 Laws Applicable to Transfer of Title		1017
2.3 Effecting Lawful and Proper Transfer of Title		1017
2.4 Real Estate Due Diligence		1017
2.5 Typical Representations and Warranties		1017
2.6 Important Areas of Law for Investors		1018
2.7 Soil Pollution or Environmental Contamination		1018
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		1018
2.9 Condemnation, Expropriation or Compulsory Purchase		1019
2.10 Taxes Applicable to a Transaction		1019
2.11 Legal Restrictions on Foreign Investors		1020
3. Real Estate Finance		1020
3.1 Financing Acquisitions of Commercial Real Estate		1020
3.2 Typical Security Created by Commercial Investors		1020
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		1020
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		1020
3.5 Legal Requirements Before an Entity Can Give Valid Security		1021
3.6 Formalities When a Borrower Is in Default		1021
3.7 Subordinating Existing Debt to Newly Created Debt		1022
3.8 Lenders’ Liability Under Environmental Laws		1022
3.9 Effects of a Borrower Becoming Insolvent		1022
3.10 Taxes on Loans		1022
4. Planning and Zoning		1022
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		1022
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		1023
4.3 Regulatory Authorities		1023
4.4 Obtaining Entitlements to Develop a New Project		1023
4.5 Right of Appeal Against an Authority’s Decision		1023
4.6 Agreements With Local or Governmental Authorities		1023
4.7 Enforcement of Restrictions on Development and Designated Use		1023
5. Investment Vehicles		1024
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		1024
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		1024
5.3 REITs		1024
5.4 Minimum Capital Requirement		1024
5.5 Applicable Governance Requirements		1024
5.6 Annual Entity Maintenance and Accounting Compliance		1024
6. Commercial Leases		1024
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		1024
6.2 Types of Commercial Leases		1024
6.3 Regulation of Rents or Lease Terms		1024
6.4 Typical Terms of a Lease		1025
6.5 Rent Variation		1025
6.6 Determination of New Rent		1025
6.7 Payment of VAT		1025
6.8 Costs Payable by a Tenant at the Start of a Lease		1025
6.9 Payment of Maintenance and Repair		1025
6.10 Payment of Utilities and Telecommunications		1025
6.11 Insurance Issues		1025
6.12 Restrictions on the Use of Real Estate		1025
6.13 Tenant’s Ability to Alter and Improve Real Estate		1025
6.14 Specific Regulations		1025
6.15 Effect of the Tenant’s Insolvency		1026
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		1026
6.17 Right to Occupy After Termination or Expiry of a Lease		1026
6.18 Right to Assign a Leasehold Interest		1026
6.19 Right to Terminate a Lease		1026
6.20 Registration Requirements		1026
6.21 Forced Eviction		1027
6.22 Termination by a Third Party		1027
6.23 Remedies/Damages for Breach		1027
7. Construction		1027
7.1 Common Structures Used to Price Construction Projects		1027
7.2 Assigning Responsibility for the Design and Construction of a Project		1027
7.3 Management of Construction Risk		1027
7.4 Management of Schedule-Related Risk		1027
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		1028
7.6 Liens or Encumbrances in the Event of Non-payment		1028
7.7 Requirements Before Use or Inhabitation		1028
8. Tax		1028
8.1 VAT and Sales Tax		1028
8.2 Mitigation of Tax Liability		1028
8.3 Municipal Taxes		1028
8.4 Income Tax Withholding for Foreign Investors		1028
8.5 Tax Benefits		1028
1. General		1037
1.1 Main Sources of Law		1037
1.2 Main Market Trends and Deals		1037
1.3 Proposals for Reform		1037
2. Sale and Purchase		1037
2.1 Categories of Property Rights		1037
2.2 Laws Applicable to Transfer of Title		1038
2.3 Effecting Lawful and Proper Transfer of Title		1039
2.4 Real Estate Due Diligence		1039
2.5 Typical Representations and Warranties		1040
2.6 Important Areas of Law for Investors		1040
2.7 Soil Pollution or Environmental Contamination		1040
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		1040
2.9 Condemnation, Expropriation or Compulsory Purchase		1040
2.10 Taxes Applicable to a Transaction		1040
2.11 Legal Restrictions on Foreign Investors		1041
3. Real Estate Finance		1041
3.1 Financing Acquisitions of Commercial Real Estate		1041
3.2 Typical Security Created by Commercial Investors		1042
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		1043
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		1043
3.5 Legal Requirements Before an Entity Can Give Valid Security		1043
3.6 Formalities When a Borrower Is in Default		1043
3.7 Subordinating Existing Debt to Newly Created Debt		1044
3.8 Lenders’ Liability Under Environmental Laws		1044
3.9 Effects of a Borrower Becoming Insolvent		1044
3.10 Taxes on Loans		1045
4. Planning and Zoning		1045
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		1045
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		1046
4.3 Regulatory Authorities		1046
4.4 Obtaining Entitlements to Develop a New Project		1046
4.5 Right of Appeal Against an Authority’s Decision		1046
4.6 Agreements With Local or Governmental Authorities		1047
4.7 Enforcement of Restrictions on Development and Designated Use		1047
5. Investment Vehicles		1047
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		1047
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		1047
5.3 REITs		1048
5.4 Minimum Capital Requirement		1048
5.5 Applicable Governance Requirements		1049
5.6 Annual Entity Maintenance and Accounting Compliance		1049
6. Commercial Leases		1049
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		1049
6.2 Types of Commercial Leases		1049
6.3 Regulation of Rents or Lease Terms		1050
6.4 Typical Terms of a Lease		1050
6.5 Rent Variation		1050
6.6 Determination of New Rent		1050
6.7 Payment of VAT		1050
6.8 Costs Payable by a Tenant at the Start of a Lease		1050
6.9 Payment of Maintenance and Repair		1050
6.10 Payment of Utilities and Telecommunications		1051
6.11 Insurance Issues		1051
6.12 Restrictions on the Use of Real Estate		1051
6.13 Tenant’s Ability to Alter and Improve Real Estate		1051
6.14 Specific Regulations		1051
6.15 Effect of the Tenant’s Insolvency		1051
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		1052
6.17 Right to Occupy After Termination or Expiry of a Lease		1052
6.18 Right to Assign a Leasehold Interest		1052
6.19 Right to Terminate a Lease		1052
6.20 Registration Requirements		1052
6.21 Forced Eviction		1053
6.22 Termination by a Third Party		1053
6.23 Remedies/Damages for Breach		1053
7. Construction		1054
7.1 Common Structures Used to Price Construction Projects		1054
7.2 Assigning Responsibility for the Design and Construction of a Project		1054
7.3 Management of Construction Risk		1054
7.4 Management of Schedule-Related Risk		1055
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		1055
7.6 Liens or Encumbrances in the Event of Non-payment		1055
7.7 Requirements Before Use or Inhabitation		1055
8. Tax		1056
8.1 VAT and Sales Tax		1056
8.2 Mitigation of Tax Liability		1056
8.3 Municipal Taxes		1056
8.4 Income Tax Withholding for Foreign Investors		1056
8.5 Tax Benefits		1056
1. General		1061
1.1 Main Sources of Law		1061
1.2 Main Market Trends and Deals		1061
1.3 Proposals for Reform		1062
2. Sale and Purchase		1064
2.1 Categories of Property Rights		1064
2.2 Laws Applicable to Transfer of Title		1065
2.3 Effecting Lawful and Proper Transfer of Title		1065
2.4 Real Estate Due Diligence		1065
2.5 Typical Representations and Warranties		1066
2.6 Important Areas of Law for Investors		1066
2.7 Soil Pollution or Environmental Contamination		1067
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		1067
2.9 Condemnation, Expropriation or Compulsory Purchase		1068
2.10 Taxes Applicable to a Transaction		1068
2.11 Legal Restrictions on Foreign Investors		1070
3. Real Estate Finance		1071
3.1 Financing Acquisitions of Commercial Real Estate		1071
3.2 Typical Security Created by Commercial Investors		1071
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		1071
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		1071
3.5 Legal Requirements Before an Entity Can Give Valid Security		1071
3.6 Formalities When a Borrower Is in Default		1071
3.7 Subordinating Existing Debt to Newly Created Debt		1072
3.8 Lenders’ Liability Under Environmental Laws		1072
3.9 Effects of a Borrower Becoming Insolvent		1072
3.10 Taxes on Loans		1072
4. Planning and Zoning		1072
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		1072
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		1073
4.3 Regulatory Authorities		1073
4.4 Obtaining Entitlements to Develop a New Project		1073
4.5 Right of Appeal Against an Authority’s Decision		1073
4.6 Agreements With Local or Governmental Authorities		1073
4.7 Enforcement of Restrictions on Development and Designated Use		1074
5. Investment Vehicles		1074
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		1074
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		1074
5.3 REITs		1074
5.4 Minimum Capital Requirement		1075
5.5 Applicable Governance Requirements		1075
5.6 Annual Entity Maintenance and Accounting Compliance		1075
6. Commercial Leases		1075
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		1075
6.2 Types of Commercial Leases		1075
6.3 Regulation of Rents or Lease Terms		1075
6.4 Typical Terms of a Lease		1076
6.5 Rent Variation		1076
6.6 Determination of New Rent		1076
6.7 Payment of VAT		1076
6.8 Costs Payable by a Tenant at the Start of a Lease		1076
6.9 Payment of Maintenance and Repair		1076
6.10 Payment of Utilities and Telecommunications		1076
6.11 Insurance Issues		1076
6.12 Restrictions on the Use of Real Estate		1077
6.13 Tenant’s Ability to Alter and Improve Real Estate		1077
6.14 Specific Regulations		1077
6.15 Effect of the Tenant’s Insolvency		1077
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		1077
6.17 Right to Occupy After Termination or Expiry of a Lease		1077
6.18 Right to Assign a Leasehold Interest		1078
6.19 Right to Terminate a Lease		1078
6.20 Registration Requirements		1078
6.21 Forced Eviction		1078
6.22 Termination by a Third Party		1079
6.23 Remedies/Damages for Breach		1079
7. Construction		1079
7.1 Common Structures Used to Price Construction Projects		1079
7.2 Assigning Responsibility for the Design and Construction of a Project		1079
7.3 Management of Construction Risk		1079
7.4 Management of Schedule-Related Risk		1080
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		1080
7.6 Liens or Encumbrances in the Event of Non-payment		1080
7.7 Requirements Before Use or Inhabitation		1080
8. Tax		1080
8.1 VAT and Sales Tax		1080
8.2 Mitigation of Tax Liability		1081
8.3 Municipal Taxes		1081
8.4 Income Tax Withholding for Foreign Investors		1081
8.5 Tax Benefits		1081
1. General		1091
1.1 Main Sources of Law		1091
1.2 Main Market Trends and Deals		1091
1.3 Proposals for Reform		1091
2. Sale and Purchase		1092
2.1 Categories of Property Rights		1092
2.2 Laws Applicable to Transfer of Title		1092
2.3 Effecting Lawful and Proper Transfer of Title		1092
2.4 Real Estate Due Diligence		1093
2.5 Typical Representations and Warranties		1093
2.6 Important Areas of Law for Investors		1093
2.7 Soil Pollution or Environmental Contamination		1094
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		1094
2.9 Condemnation, Expropriation or Compulsory Purchase		1094
2.10 Taxes Applicable to a Transaction		1094
2.11 Legal Restrictions on Foreign Investors		1095
3. Real Estate Finance		1095
3.1 Financing Acquisitions of Commercial Real Estate		1095
3.2 Typical Security Created by Commercial Investors		1095
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		1095
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		1096
3.5 Legal Requirements Before an Entity Can Give Valid Security		1096
3.6 Formalities When a Borrower Is in Default		1096
3.7 Subordinating Existing Debt to Newly Created Debt		1096
3.8 Lenders’ Liability Under Environmental Laws		1096
3.9 Effects of a Borrower Becoming Insolvent		1097
3.10 Taxes on Loans		1097
4. Planning and Zoning		1097
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		1097
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		1097
4.3 Regulatory Authorities		1097
4.4 Obtaining Entitlements to Develop a New Project		1097
4.5 Right of Appeal Against an Authority’s Decision		1098
4.6 Agreements With Local or Governmental Authorities		1098
4.7 Enforcement of Restrictions on Development and Designated Use		1098
5. Investment Vehicles		1098
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		1098
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		1098
5.3 REITs		1099
5.4 Minimum Capital Requirement		1099
5.5 Applicable Governance Requirements		1099
5.6 Annual Entity Maintenance and Accounting Compliance		1099
6. Commercial Leases		1099
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		1099
6.2 Types of Commercial Leases		1099
6.3 Regulation of Rents or Lease Terms		1099
6.4 Typical Terms of a Lease		1100
6.5 Rent Variation		1100
6.6 Determination of New Rent		1100
6.7 Payment of VAT		1100
6.8 Costs Payable by a Tenant at the Start of a Lease		1100
6.9 Payment of Maintenance and Repair		1101
6.10 Payment of Utilities and Telecommunications		1101
6.11 Insurance Issues		1101
6.12 Restrictions on the Use of Real Estate		1101
6.13 Tenant’s Ability to Alter and Improve Real Estate		1101
6.14 Specific Regulations		1101
6.15 Effect of the Tenant’s Insolvency		1101
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		1101
6.17 Right to Occupy After Termination or Expiry of a Lease		1101
6.18 Right to Assign a Leasehold Interest		1102
6.19 Right to Terminate a Lease		1102
6.20 Registration Requirements		1102
6.21 Forced Eviction		1102
6.22 Termination by a Third Party		1103
6.23 Remedies/Damages for Breach		1103
7. Construction		1103
7.1 Common Structures Used to Price Construction Projects		1103
7.2 Assigning Responsibility for the Design and Construction of a Project		1103
7.3 Management of Construction Risk		1103
7.4 Management of Schedule-Related Risk		1103
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		1104
7.6 Liens or Encumbrances in the Event of Non-payment		1104
7.7 Requirements Before Use or Inhabitation		1104
8. Tax		1104
8.1 VAT and Sales Tax		1104
8.2 Mitigation of Tax Liability		1104
8.3 Municipal Taxes		1104
8.4 Income Tax Withholding for Foreign Investors		1105
8.5 Tax Benefits		1105
1. General		1117
1.1 Main Sources of Law		1117
1.2 Main Market Trends and Deals		1117
1.3 Proposals for Reform		1118
2. Sale and Purchase		1119
2.1 Categories of Property Rights		1119
2.2 Laws Applicable to Transfer of Title		1119
2.3 Effecting Lawful and Proper Transfer of Title		1119
2.4 Real Estate Due Diligence		1119
2.5 Typical Representations and Warranties		1120
2.6 Important Areas of Law for Investors		1120
2.7 Soil Pollution or Environmental Contamination		1120
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		1121
2.9 Condemnation, Expropriation or Compulsory Purchase		1121
2.10 Taxes Applicable to a Transaction		1121
2.11 Legal Restrictions on Foreign Investors		1121
3. Real Estate Finance		1122
3.1 Financing Acquisitions of Commercial Real Estate		1122
3.2 Typical Security Created by Commercial Investors		1122
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		1122
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		1122
3.5 Legal Requirements Before an Entity Can Give Valid Security		1122
3.6 Formalities When a Borrower Is in Default		1122
3.7 Subordinating Existing Debt to Newly Created Debt		1123
3.8 Lenders’ Liability Under Environmental Laws		1123
3.9 Effects of a Borrower Becoming Insolvent		1123
3.10 Taxes on Loans		1124
4. Planning and Zoning		1124
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		1124
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		1124
4.3 Regulatory Authorities		1124
4.4 Obtaining Entitlements to Develop a New Project		1125
4.5 Right of Appeal Against an Authority’s Decision		1125
4.6 Agreements With Local or Governmental Authorities		1125
4.7 Enforcement of Restrictions on Development and Designated Use		1125
5. Investment Vehicles		1126
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		1126
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		1126
5.3 REITs		1127
5.4 Minimum Capital Requirement		1127
5.5 Applicable Governance Requirements		1127
5.6 Annual Entity Maintenance and Accounting Compliance		1128
6. Commercial Leases		1128
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		1128
6.2 Types of Commercial Leases		1129
6.3 Regulation of Rents or Lease Terms		1129
6.4 Typical Terms of a Lease		1129
6.5 Rent Variation		1129
6.6 Determination of New Rent		1129
6.7 Payment of VAT		1129
6.8 Costs Payable by a Tenant at the Start of a Lease		1129
6.9 Payment of Maintenance and Repair		1130
6.10 Payment of Utilities and Telecommunications		1130
6.11 Insurance Issues		1130
6.12 Restrictions on the Use of Real Estate		1130
6.13 Tenant’s Ability to Alter and Improve Real Estate		1130
6.14 Specific Regulations		1130
6.15 Effect of the Tenant’s Insolvency		1131
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		1131
6.17 Right to Occupy After Termination or Expiry of a Lease		1131
6.18 Right to Assign a Leasehold Interest		1132
6.19 Right to Terminate a Lease		1132
6.20 Registration Requirements		1132
6.21 Forced Eviction		1133
6.22 Termination by a Third Party		1133
6.23 Remedies/Damages for Breach		1133
7. Construction		1134
7.1 Common Structures Used to Price Construction Projects		1134
7.2 Assigning Responsibility for the Design and Construction of a Project		1134
7.3 Management of Construction Risk		1134
7.4 Management of Schedule-Related Risk		1134
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		1135
7.6 Liens or Encumbrances in the Event of Non-payment		1135
7.7 Requirements Before Use or Inhabitation		1135
8. Tax		1135
8.1 VAT and Sales Tax		1135
8.2 Mitigation of Tax Liability		1136
8.3 Municipal Taxes		1136
8.4 Income Tax Withholding for Foreign Investors		1136
8.5 Tax Benefits		1137
1. General		1152
1.1 Main Sources of Law		1152
1.2 Main Market Trends and Deals		1152
1.3 Proposals for Reform		1152
2. Sale and Purchase		1153
2.1 Categories of Property Rights		1153
2.2 Laws Applicable to Transfer of Title		1153
2.3 Effecting Lawful and Proper Transfer of Title		1153
2.4 Real Estate Due Diligence		1154
2.5 Typical Representations and Warranties		1154
2.6 Important Areas of Law for Investors		1154
2.7 Soil Pollution or Environmental Contamination		1154
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		1155
2.9 Condemnation, Expropriation or Compulsory Purchase		1155
2.10 Taxes Applicable to a Transaction		1155
2.11 Legal Restrictions on Foreign Investors		1155
3. Real Estate Finance		1156
3.1 Financing Acquisitions of Commercial Real Estate		1156
3.2 Typical Security Created by Commercial Investors		1156
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		1156
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		1156
3.5 Legal Requirements Before an Entity Can Give Valid Security		1157
3.6 Formalities When a Borrower Is in Default		1157
3.7 Subordinating Existing Debt to Newly Created Debt		1157
3.8 Lenders’ Liability Under Environmental Laws		1157
3.9 Effects of a Borrower Becoming Insolvent		1157
3.10 Taxes on Loans		1158
4. Planning and Zoning		1158
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		1158
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		1158
4.3 Regulatory Authorities		1159
4.4 Obtaining Entitlements to Develop a New Project		1159
4.5 Right of Appeal Against an Authority’s Decision		1160
4.6 Agreements With Local or Governmental Authorities		1160
4.7 Enforcement of Restrictions on Development and Designated Use		1160
5. Investment Vehicles		1160
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		1160
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		1161
5.3 REITs		1164
5.4 Minimum Capital Requirement		1164
5.5 Applicable Governance Requirements		1164
5.6 Annual Entity Maintenance and Accounting Compliance		1164
6. Commercial Leases		1164
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		1164
6.2 Types of Commercial Leases		1165
6.3 Regulation of Rents or Lease Terms		1165
6.4 Typical Terms of a Lease		1165
6.5 Rent Variation		1165
6.6 Determination of New Rent		1165
6.7 Payment of VAT		1165
6.8 Costs Payable by a Tenant at the Start of a Lease		1166
6.9 Payment of Maintenance and Repair		1166
6.10 Payment of Utilities and Telecommunications		1166
6.11 Insurance Issues		1166
6.12 Restrictions on the Use of Real Estate		1166
6.13 Tenant’s Ability to Alter and Improve Real Estate		1166
6.14 Specific Regulations		1166
6.15 Effect of the Tenant’s Insolvency		1166
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		1167
6.17 Right to Occupy After Termination or Expiry of a Lease		1167
6.18 Right to Assign a Leasehold Interest		1167
6.19 Right to Terminate a Lease		1167
6.20 Registration Requirements		1167
6.21 Forced Eviction		1167
6.22 Termination by a Third Party		1168
6.23 Remedies/Damages for Breach		1168
7. Construction		1169
7.1 Common Structures Used to Price Construction Projects		1169
7.2 Assigning Responsibility for the Design and Construction of a Project		1169
7.3 Management of Construction Risk		1169
7.4 Management of Schedule-Related Risk		1169
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		1169
7.6 Liens or Encumbrances in the Event of Non-payment		1170
7.7 Requirements Before Use or Inhabitation		1170
8. Tax		1170
8.1 VAT and Sales Tax		1170
8.2 Mitigation of Tax Liability		1171
8.3 Municipal Taxes		1171
8.4 Income Tax Withholding for Foreign Investors		1172
8.5 Tax Benefits		1172
1. General		1182
1.1 Main Sources of Law		1182
1.2 Main Market Trends and Deals		1182
1.3 Proposals for Reform		1182
2. Sale and Purchase		1182
2.1 Categories of Property Rights		1182
2.2 Laws Applicable to Transfer of Title		1182
2.3 Effecting Lawful and Proper Transfer of Title		1182
2.4 Real Estate Due Diligence		1183
2.5 Typical Representations and Warranties		1184
2.6 Important Areas of Law for Investors		1184
2.7 Soil Pollution or Environmental Contamination		1184
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		1185
2.9 Condemnation, Expropriation or Compulsory Purchase		1185
2.10 Taxes Applicable to a Transaction		1185
2.11 Legal Restrictions on Foreign Investors		1186
3. Real Estate Finance		1186
3.1 Financing Acquisitions of Commercial Real Estate		1186
3.2 Typical Security Created by Commercial Investors		1186
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		1187
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		1187
3.5 Legal Requirements Before an Entity Can Give Valid Security		1187
3.6 Formalities When a Borrower Is in Default		1187
3.7 Subordinating Existing Debt to Newly Created Debt		1188
3.8 Lenders’ Liability Under Environmental Laws		1189
3.9 Effects of a Borrower Becoming Insolvent		1189
3.10 Taxes on Loans		1189
4. Planning and Zoning		1189
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		1189
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		1189
4.3 Regulatory Authorities		1190
4.4 Obtaining Entitlements to Develop a New Project		1190
4.5 Right of Appeal Against an Authority’s Decision		1191
4.6 Agreements With Local or Governmental Authorities		1191
4.7 Enforcement of Restrictions on Development and Designated Use		1191
5. Investment Vehicles		1192
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		1192
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		1192
5.3 REITs		1194
5.4 Minimum Capital Requirement		1194
5.5 Applicable Governance Requirements		1194
5.6 Annual Entity Maintenance and Accounting Compliance		1194
6. Commercial Leases		1194
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		1194
6.2 Types of Commercial Leases		1194
6.3 Regulation of Rents or Lease Terms		1195
6.4 Typical Terms of a Lease		1195
6.5 Rent Variation		1195
6.6 Determination of New Rent		1196
6.7 Payment of VAT		1196
6.8 Costs Payable by a Tenant at the Start of a Lease		1196
6.9 Payment of Maintenance and Repair		1196
6.10 Payment of Utilities and Telecommunications		1196
6.11 Insurance Issues		1196
6.12 Restrictions on the Use of Real Estate		1196
6.13 Tenant’s Ability to Alter and Improve Real Estate		1197
6.14 Specific Regulations		1197
6.15 Effect of the Tenant’s Insolvency		1197
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		1197
6.17 Right to Occupy After Termination or Expiry of a Lease		1197
6.18 Right to Assign a Leasehold Interest		1198
6.19 Right to Terminate a Lease		1198
6.20 Registration Requirements		1198
6.21 Forced Eviction		1198
6.22 Termination by a Third Party		1199
6.23 Remedies/Damages for Breach		1199
7. Construction		1199
7.1 Common Structures Used to Price Construction Projects		1199
7.2 Assigning Responsibility for the Design and Construction of a Project		1199
7.3 Management of Construction Risk		1200
7.4 Management of Schedule-Related Risk		1200
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		1200
7.6 Liens or Encumbrances in the Event of Non-payment		1200
7.7 Requirements Before Use or Inhabitation		1201
8. Tax		1201
8.1 VAT and Sales Tax		1201
8.2 Mitigation of Tax Liability		1201
8.3 Municipal Taxes		1201
8.4 Income Tax Withholding for Foreign Investors		1201
8.5 Tax Benefits		1201
1. General		1220
1.1 Main Sources of Law		1220
1.2 Main Market Trends and Deals		1220
1.3 Proposals for Reform		1220
2. Sale and Purchase		1220
2.1 Categories of Property Rights		1220
2.2 Laws Applicable to Transfer of Title		1221
2.3 Effecting Lawful and Proper Transfer of Title		1223
2.4 Real Estate Due Diligence		1224
2.5 Typical Representations and Warranties		1224
2.6 Important Areas of Law for Investors		1225
2.7 Soil Pollution or Environmental Contamination		1225
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		1226
2.9 Condemnation, Expropriation or Compulsory Purchase		1226
2.10 Taxes Applicable to a Transaction		1226
2.11 Legal Restrictions on Foreign Investors		1227
3. Real Estate Finance		1227
3.1 Financing Acquisitions of Commercial Real Estate		1227
3.2 Typical Security Created by Commercial Investors		1227
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		1228
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		1228
3.5 Legal Requirements Before an Entity Can Give Valid Security		1228
3.6 Formalities When a Borrower Is in Default		1228
3.7 Subordinating Existing Debt to Newly Created Debt		1229
3.8 Lenders’ Liability Under Environmental Laws		1229
3.9 Effects of a Borrower Becoming Insolvent		1229
3.10 Taxes on Loans		1229
4. Planning and Zoning		1230
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		1230
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		1230
4.3 Regulatory Authorities		1230
4.4 Obtaining Entitlements to Develop a New Project		1230
4.5 Right of Appeal Against an Authority’s Decision		1231
4.6 Agreements With Local or Governmental Authorities		1231
4.7 Enforcement of Restrictions on Development and Designated Use		1232
5. Investment Vehicles		1232
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		1232
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		1232
5.3 REITs		1233
5.4 Minimum Capital Requirement		1233
5.5 Applicable Governance Requirements		1233
5.6 Annual Entity Maintenance and Accounting Compliance		1233
6. Commercial Leases		1233
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		1233
6.2 Types of Commercial Leases		1233
6.3 Regulation of Rents or Lease Terms		1234
6.4 Typical Terms of a Lease		1234
6.5 Rent Variation		1234
6.6 Determination of New Rent		1234
6.7 Payment of VAT		1235
6.8 Costs Payable by a Tenant at the Start of a Lease		1235
6.9 Payment of Maintenance and Repair		1235
6.10 Payment of Utilities and Telecommunications		1235
6.11 Insurance Issues		1235
6.12 Restrictions on the Use of Real Estate		1236
6.13 Tenant’s Ability to Alter and Improve Real Estate		1236
6.14 Specific Regulations		1236
6.15 Effect of the Tenant’s Insolvency		1236
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		1237
6.17 Right to Occupy After Termination or Expiry of a Lease		1237
6.18 Right to Assign a Leasehold Interest		1237
6.19 Right to Terminate a Lease		1238
6.20 Registration Requirements		1238
6.21 Forced Eviction		1238
6.22 Termination by a Third Party		1239
6.23 Remedies/Damages for Breach		1239
7. Construction		1239
7.1 Common Structures Used to Price Construction Projects		1239
7.2 Assigning Responsibility for the Design and Construction of a Project		1240
7.3 Management of Construction Risk		1240
7.4 Management of Schedule-Related Risk		1241
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		1242
7.6 Liens or Encumbrances in the Event of Non-payment		1242
7.7 Requirements Before Use or Inhabitation		1242
8. Tax		1243
8.1 VAT and Sales Tax		1243
8.2 Mitigation of Tax Liability		1243
8.3 Municipal Taxes		1243
8.4 Income Tax Withholding for Foreign Investors		1243
8.5 Tax Benefits		1243
1. General		1249
1.1 Main Sources of Law		1249
1.2 Main Market Trends and Deals		1249
1.3 Proposals for Reform		1249
2. Sale and Purchase		1250
2.1 Categories of Property Rights		1250
2.2 Laws Applicable to Transfer of Title		1250
2.3 Effecting Lawful and Proper Transfer of Title		1250
2.4 Real Estate Due Diligence		1251
2.5 Typical Representations and Warranties		1251
2.6 Important Areas of Law for Investors		1252
2.7 Soil Pollution or Environmental Contamination		1252
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		1253
2.9 Condemnation, Expropriation or Compulsory Purchase		1253
2.10 Taxes Applicable to a Transaction		1253
2.11 Legal Restrictions on Foreign Investors		1254
3. Real Estate Finance		1254
3.1 Financing Acquisitions of Commercial Real Estate		1254
3.2 Typical Security Created by Commercial Investors		1255
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		1255
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		1255
3.5 Legal Requirements Before an Entity Can Give Valid Security		1256
3.6 Formalities When a Borrower Is in Default		1256
3.7 Subordinating Existing Debt to Newly Created Debt		1256
3.8 Lenders’ Liability Under Environmental Laws		1256
3.9 Effects of a Borrower Becoming Insolvent		1256
3.10 Taxes on Loans		1257
4. Planning and Zoning		1257
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		1257
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		1257
4.3 Regulatory Authorities		1257
4.4 Obtaining Entitlements to Develop a New Project		1257
4.5 Right of Appeal Against an Authority’s Decision		1258
4.6 Agreements With Local or Governmental Authorities		1258
4.7 Enforcement of Restrictions on Development and Designated Use		1258
5. Investment Vehicles		1258
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		1258
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		1259
5.3 REITs		1260
5.4 Minimum Capital Requirement		1260
5.5 Applicable Governance Requirements		1260
5.6 Annual Entity Maintenance and Accounting Compliance		1262
6. Commercial Leases		1262
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		1262
6.2 Types of Commercial Leases		1262
6.3 Regulation of Rents or Lease Terms		1262
6.4 Typical Terms of a Lease		1263
6.5 Rent Variation		1263
6.6 Determination of New Rent		1263
6.7 Payment of VAT		1263
6.8 Costs Payable by a Tenant at the Start of a Lease		1263
6.9 Payment of Maintenance and Repair		1263
6.10 Payment of Utilities and Telecommunications		1264
6.11 Insurance Issues		1264
6.12 Restrictions on the Use of Real Estate		1264
6.13 Tenant’s Ability to Alter and Improve Real Estate		1264
6.14 Specific Regulations		1264
6.15 Effect of the Tenant’s Insolvency		1266
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		1267
6.17 Right to Occupy After Termination or Expiry of a Lease		1267
6.18 Right to Assign a Leasehold Interest		1267
6.19 Right to Terminate a Lease		1267
6.20 Registration Requirements		1268
6.21 Forced Eviction		1268
6.22 Termination by a Third Party		1268
6.23 Remedies/Damages for Breach		1268
7. Construction		1268
7.1 Common Structures Used to Price Construction Projects		1268
7.2 Assigning Responsibility for the Design and Construction of a Project		1269
7.3 Management of Construction Risk		1269
7.4 Management of Schedule-Related Risk		1270
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		1270
7.6 Liens or Encumbrances in the Event of Non-payment		1270
7.7 Requirements Before Use or Inhabitation		1271
8. Tax		1271
8.1 VAT and Sales Tax		1271
8.2 Mitigation of Tax Liability		1271
8.3 Municipal Taxes		1271
8.4 Income Tax Withholding for Foreign Investors		1271
8.5 Tax Benefits		1272
1. General		1277
1.1 Main Sources of Law		1277
1.2 Main Market Trends and Deals		1277
1.3 Proposals for Reform		1277
2. Sale and Purchase		1277
2.1 Categories of Property Rights		1277
2.2 Laws Applicable to Transfer of Title		1278
2.3 Effecting Lawful and Proper Transfer of Title		1278
2.4 Real Estate Due Diligence		1278
2.5 Typical Representations and Warranties		1280
2.6 Important Areas of Law for Investors		1280
2.7 Soil Pollution or Environmental Contamination		1281
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		1281
2.9 Condemnation, Expropriation or Compulsory Purchase		1281
2.10 Taxes Applicable to a Transaction		1281
2.11 Legal Restrictions on Foreign Investors		1282
3. Real Estate Finance		1282
3.1 Financing Acquisitions of Commercial Real Estate		1282
3.2 Typical Security Created by Commercial Investors		1282
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		1283
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		1283
3.5 Legal Requirements Before an Entity Can Give Valid Security		1283
3.6 Formalities When a Borrower Is in Default		1284
3.7 Subordinating Existing Debt to Newly Created Debt		1284
3.8 Lenders’ Liability Under Environmental Laws		1285
3.9 Effects of a Borrower Becoming Insolvent		1285
3.10 Taxes on Loans		1285
4. Planning and Zoning		1285
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		1285
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		1286
4.3 Regulatory Authorities		1286
4.4 Obtaining Entitlements to Develop a New Project		1286
4.5 Right of Appeal Against an Authority’s Decision		1287
4.6 Agreements With Local or Governmental Authorities		1287
4.7 Enforcement of Restrictions on Development and Designated Use		1287
5. Investment Vehicles		1287
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		1287
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		1287
5.3 REITs		1288
5.4 Minimum Capital Requirement		1288
5.5 Applicable Governance Requirements		1289
5.6 Annual Entity Maintenance and Accounting Compliance		1289
6. Commercial Leases		1289
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		1289
6.2 Types of Commercial Leases		1289
6.3 Regulation of Rents or Lease Terms		1290
6.4 Typical Terms of a Lease		1290
6.5 Rent Variation		1290
6.6 Determination of New Rent		1290
6.7 Payment of VAT		1290
6.8 Costs Payable by a Tenant at the Start of a Lease		1291
6.9 Payment of Maintenance and Repair		1291
6.10 Payment of Utilities and Telecommunications		1291
6.11 Insurance Issues		1291
6.12 Restrictions on the Use of Real Estate		1291
6.13 Tenant’s Ability to Alter and Improve Real Estate		1291
6.14 Specific Regulations		1291
6.15 Effect of the Tenant’s Insolvency		1292
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		1292
6.17 Right to Occupy After Termination or Expiry of a Lease		1292
6.18 Right to Assign a Leasehold Interest		1292
6.19 Right to Terminate a Lease		1293
6.20 Registration Requirements		1293
6.21 Forced Eviction		1293
6.22 Termination by a Third Party		1293
6.23 Remedies/Damages for Breach		1293
7. Construction		1293
7.1 Common Structures Used to Price Construction Projects		1293
7.2 Assigning Responsibility for the Design and Construction of a Project		1293
7.3 Management of Construction Risk		1294
7.4 Management of Schedule-Related Risk		1294
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		1294
7.6 Liens or Encumbrances in the Event of Non-payment		1294
7.7 Requirements Before Use or Inhabitation		1294
8. Tax		1295
8.1 VAT and Sales Tax		1295
8.2 Mitigation of Tax Liability		1295
8.3 Municipal Taxes		1295
8.4 Income Tax Withholding for Foreign Investors		1295
8.5 Tax Benefits		1296
1. General		1302
1.1 Main Sources of Law		1302
1.2 Main Market Trends and Deals		1302
1.3 Proposals for Reform		1302
2. Sale and Purchase		1303
2.1 Categories of Property Rights		1303
2.2 Laws Applicable to Transfer of Title		1303
2.3 Effecting Lawful and Proper Transfer of Title		1303
2.4 Real Estate Due Diligence		1303
2.5 Typical Representations and Warranties		1304
2.6 Important Areas of Law for Investors		1304
2.7 Soil Pollution or Environmental Contamination		1304
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law		1304
2.9 Condemnation, Expropriation or Compulsory Purchase		1305
2.10 Taxes Applicable to a Transaction		1305
2.11 Legal Restrictions on Foreign Investors		1305
3. Real Estate Finance		1305
3.1 Financing Acquisitions of Commercial Real Estate		1305
3.2 Typical Security Created by Commercial Investors		1305
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders		1306
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security		1306
3.5 Legal Requirements Before an Entity Can Give Valid Security		1306
3.6 Formalities When a Borrower Is in Default		1306
3.7 Subordinating Existing Debt to Newly Created Debt		1307
3.8 Lenders’ Liability Under Environmental Laws		1307
3.9 Effects of a Borrower Becoming Insolvent		1307
3.10 Taxes on Loans		1307
4. Planning and Zoning		1308
4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning		1308
4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction		1308
4.3 Regulatory Authorities		1308
4.4 Obtaining Entitlements to Develop a New Project		1308
4.5 Right of Appeal Against an Authority’s Decision		1308
4.6 Agreements With Local or Governmental Authorities		1308
4.7 Enforcement of Restrictions on Development and Designated Use		1309
5. Investment Vehicles		1309
5.1 Types of Entities Available to Investors to Hold Real Estate Assets		1309
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity		1309
5.3 REITs		1310
5.4 Minimum Capital Requirement		1310
5.5 Applicable Governance Requirements		1310
5.6 Annual Entity Maintenance and Accounting Compliance		1310
6. Commercial Leases		1311
6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time		1311
6.2 Types of Commercial Leases		1311
6.3 Regulation of Rents or Lease Terms		1311
6.4 Typical Terms of a Lease		1311
6.5 Rent Variation		1312
6.6 Determination of New Rent		1312
6.7 Payment of VAT		1312
6.8 Costs Payable by a Tenant at the Start of a Lease		1312
6.9 Payment of Maintenance and Repair		1312
6.10 Payment of Utilities and Telecommunications		1312
6.11 Insurance Issues		1312
6.12 Restrictions on the Use of Real Estate		1313
6.13 Tenant’s Ability to Alter and Improve Real Estate		1313
6.14 Specific Regulations		1313
6.15 Effect of the Tenant’s Insolvency		1314
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations		1314
6.17 Right to Occupy After Termination or Expiry of a Lease		1315
6.18 Right to Assign a Leasehold Interest		1315
6.19 Right to Terminate a Lease		1315
6.20 Registration Requirements		1316
6.21 Forced Eviction		1316
6.22 Termination by a Third Party		1316
6.23 Remedies/Damages for Breach		1316
7. Construction		1316
7.1 Common Structures Used to Price Construction Projects		1316
7.2 Assigning Responsibility for the Design and Construction of a Project		1317
7.3 Management of Construction Risk		1317
7.4 Management of Schedule-Related Risk		1317
7.5 Additional Forms of Security to Guarantee a Contractor’s Performance		1317
7.6 Liens or Encumbrances in the Event of Non-payment		1317
7.7 Requirements Before Use or Inhabitation		1317
8. Tax		1318
8.1 VAT and Sales Tax		1318
8.2 Mitigation of Tax Liability		1318
8.3 Municipal Taxes		1318
8.4 Income Tax Withholding for Foreign Investors		1318
8.5 Tax Benefits		1318

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