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Tuesday, 12 July 2011 09:39

In 1969, The Netherlands became the first European country to pass its own REIT law. The Dutch Corporate Income Tax Act of 1969 introduced the Fiscale Beleggingsinstelling (FBI) for closed end Fiscal Investment Institution. They must pay out 100% of their taxable profits to avoid taxation. They are not allowed to engage in land and property development. Foreign ownership is limited to less than 25% by a single non-Dutch national. A domestic FBI must be a limited company (BV), a public company (NV), or a joint account (FJA). A foreign FBI must be a comparable entity incorporated or formed under the laws of an EU member country. They can be either listed or unlisted. Some FBIs or Netherlands Real Estate Investment Trusts are unregulated, but all those publicly listed are regulated.  No owner of more than 45% of an FBI's shares can be an entity other than another Fiscale Beleggingsinstelling. No individual person can own more than 25% of a Fiscal Investment Institution. With-holding taxes of 15% are taken from dividend distributions to stockholders, including foreign shareholders.  A company can begin as a Dutch REIT effective only as the first day of a year.