Decree-Law n. º 19/2019, of 28 of January, introduces the new Investment and Real Estate Management Companies (“SIGI”) regime, commonly known in the European markets as “Real Estate Investment Trusts” (REITs).
The SIGI are a new type of Real Estate Investment Company, whose incorporation and activity are now governed in a separate piece of legislation.
These companies constitute a new vehicle for promoting investment and boosting the real estate market, particularly the lease market, as it is foreseen that its activity is aimed to the acquisition of in rem rights over real estate assets, to lease them or exploit them in other ways, including the development of real estate construction and rehabilitation projects and the use of those assets as shops or spaces in shopping centres, or the use of spaces in offices.
The diploma provides specific rules for the SIGI, regarding the requirements for its (i) incorporation (minimum share capital of EUR 5,000,000.00), (ii) composition of its assets (minimum of 80% of the value of the SIGI assets must correspond to in rem rights over real estate assets and shareholdings in other SIGI or companies subject to similar requirements and the value of the rights over real estate assets subject to leasing or other forms of economic exploitation must correspond to at least 75% of the company’s global assets value), (iii) time limit for the distribution of profits (no later than nine months after the end of each financial year being distributed at least 75% of the yearly profits, depending on their nature), (iv) indebtedness (which must be inferior to 60% of the company’s global assets value), shares trading (the shares must be admitted or selected to trading on a regulated market or in a multilateral trading facility, respectively within one year from the incorporation or conversion of the company) and loss of its status (in case where the company ceases to comply with the relevant requirements).
Moreover, the Decree-Law lays down the possibility, legal requirements and procedure for the conversion of Public Limited Companies and Property Collective Investment Companies, into SIGI.
Furthermore, recognizing the importance of its activity for the dynamism of the Portuguese capital market, it is stated that the tax benefits foreseen in Tax Incentive Statue (“EBF”) for the other Real Estate Investment Companies, shall be applicable to these companies.
This Decree-Law also brings changes to the Decree-Law n. º 77/2017, which provides the incorporation and regulation of the Real Estate Investment Firms for the promotion of the economy (“SIMFE”). Therefore, this new act clarifies the legal scheme applicable to the SIMFE, which operate under the limits provided by the law regarding the assets under its management.
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