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Tuesday, 28 June 2011 03:29

French REITs must pay out 85% of income, and

Are exempt from taxes (including on the upto 15% of the income that is not distributed), and

Must pay out 50% of their capital gains within 2 years (but don’t have to pay tax on the 50% balance), and

Cannot be privately owned or have any one individual or corporate shareholder (or in co-operation with one another) owning more than 60% of the stock, and

Must have at least Euro15m in capital, and

Invest in France, and

Can (directly or via subsidiaries), engage in investment / development if the aim is to acquire building to lease (not tax exempt), and

Can leverage up their borrowings as they are not subject to any formal gearing requirements, but

Cannot provide “services” and

Must have a “free float” of 15%+.

Real estate companies which convert to REITs must pay 16.5% tax on unrealized capital gains.

Foreign investors no longer need to establish and list a holding investment vehicle in France, but REITs must withhold 25% of distributions to foreign shareholders (often mitigated by double tax treaties to @15%).

 

Last Updated on Wednesday, 29 June 2011 06:43