BELGIUM Law and Practice Contributed by: Pieter Puelinckx, Yves Moreau, Donald Krols and Astrid Laga, Linklaters
5.3 REITs An
limited by a list of allowed investments defined by law. The tax and accounting framework for B-REITs has similarities with the one applicable to SREIFs: B-REITs must prepare their annual accounts in accordance with IFRS standards, and their taxable income essentially comprises “abnormal and benevolent” advantages received and various disallowed expenses. B-REITs are also subject to a distribution obligation, requiring them to annually distribute 80% of a portion of their income, as defined by a particular formula. Due to their specific regime, B-REITs are also subject to specific governance and information obligations (including periodical valuation of public B-REITs’ assets and publication of spe - cific annual and biannual financial reports), as well as various consequences if the debt ratio, as defined by law, of a public B-REITs reaches thresholds provided in the law. From a tax perspective, B-REITs are also liable to an “exit tax” as well as an annual subscrip - tion tax on their Belgian net assets (at a rate of 0.0925% for public B-REITs) (see 5.2 Main Fea- tures and Tax Implications of the Constitution of Each Type of Entity ). The remainder of this publication will focus on SREIFs’ regime, with the understanding that numerous legal principles governing SREIFs are also applicable to B-REITs. 5.4 Minimum Capital Requirement Public limited liability companies must maintain a minimum share capital of at least EUR61,500. This obligation does not extend to private limited liability companies and limited partnerships.
alternative structure to SREIFs is the “société immobilière réglementée” / “gereglementeerde vastgoedven - nootschappen” (commonly referred to as the “Belgian REIT” , or B-REIT). investment These entities, designed for long-term invest - ment and risk diversification fall into three dis - tinct categories. • The “public” B-REIT, financed by the public (notwithstanding other financing methods), with their shares mandatorily listed on a regu - lated market. • The “institutional” B-REIT, which can only be financed by eligible investors or individu - als (on the condition that their subscription or purchase price is at least EUR100,000) – more than 25% of the share capital of an institutional B-REIT must be held, directly or indirectly by a public B-REIT. • The “social” B-REIT, whose operations must be dedicated to real estate necessary for the social sector and housing for individuals, amongst other conditions. B-REITs are incorporated for an unlimited dura - tion, must adhere to a minimum capital require - ment of EUR1.2 million and are subject to an approval from the Belgian financial services and markets authority. Their main activity must be the purchase of real estate assets (directly or indirectly) or construction and renovations of real estate assets in view of the occupation by users or the direct or indirect holding of shares in entities with a similar activity. B-REITs are also allowed to participate in various categories public-private partnerships and to participate in energy, fuel, water and waste sectors projects. B-REITs are also notably forbidden to act as real estate developers and B-REITs’ investments are
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