SLOVENIA Law and Practice Contributed by: Blaž Ogorevc, Miha Štravs and Blaž Murko, Odvetniki Šelih & partnerji, o.p., d.o.o.
3. Real Estate Finance 3.1 Financing Acquisitions of Commercial Real Estate
of ownership. After 15 years of ownership, the transaction is exempt from tax on capital gains. The above-mentioned taxes are also triggered by partial ownership transfer. 2.11 Legal Restrictions on Foreign Investors Foreign investors are classified into the follow - ing groups as regards the possibility of acquiring real estate in Slovenia. • Foreign investors that can acquire real estate without legal restrictions: legal entities and citizens of the EU, OECD and EFTA. Some additional cases are foreseen for natural per - sons, eg, Slovene status, inheritance. • Foreign investors that can acquire real estate on the basis of a legal transaction, inherit - ance or decision of a public authority, under the condition of reciprocity: legal entities and citizens of candidate countries for EU mem - bership. • Foreign investors that cannot acquire real estate or can only acquire it based on inherit - ance under the condition of reciprocity: legal entities and citizens from all other countries that do not fall into any of the groups listed above. The restrictions described above are somewhat alleviated, as it is possible for foreign inves - tors to obtain real estate through legal entities established in countries with no legal restrictions applicable to them.
Acquisitions of commercial real estate are in most cases financed by both debt and equity, where - by the ratio between the two (LTV) depends on the characteristics of each individual acquisition. In order to acquire debt financing from lenders, investors are required to ensure sufficient equity also in property development transactions. Large real estate portfolios or companies hold - ing real estate are often financed by syndicated loans of different lenders. Such deals may be financed by a club of Slovenian banks, though often it may not be only Slovenian lending insti - tutions, but also foreign. In such cases, LMA standard financing documents are used and, most commonly, English law applies. Mezzanine financing is not a common occur - rence on the Slovenian market. 3.2 Typical Security Created by Commercial Investors Not surprisingly, the most typical security cre - ated by commercial real estate investors bor - rowing funds to acquire or develop real estate is a mortgage. Term loans are commonly secured with a so-called directly enforceable mortgage, which enables the mortgagee to initiate the enforcement process more swiftly upon matu - rity of the secured obligations. In theory, out-of- court sale of property with assistance of a notary is possible if a loan is secured with such a direct - ly enforceable mortgage, but this is extremely rare in practice. A special type of mortgage, which is also very common, is a maximum mortgage, where all existing and future claims arising from specific
903 CHAMBERS.COM
Powered by FlippingBook