Following the EU Alternative Investment Fund Managers Directive (‘AIFMD’) and its Belgian implementation (below ‘AIFMD Regulations’), AIF Managers carrying out activities within the scope of AIFMD will have to file an application for authorisation before 22 July 2014 and will have to comply with the conditions imposed.
As things stand today, Belgian Real Estate Funds (‘Vastgoedbevaks’ or ‘SICAFIs’) are caught by the AIFMD Regulations. However, on 27 March 2014, the Belgian government has introduced a draft proposal creating the concept of a Belgian ‘Regulated Real Estate Company’ (‘gereglementeerde vastgoedvennootschap’/‘société immobilière réglementée’). These Regulated Real Estate Companies will be subject to supervision of the FSMA and various restrictions in terms of leverage, risk diversification and distribution requirements, in a similar way as Real Estate Funds are today. Regulated Real Estate Companies can also benefit from the same special tax ‘transparency’ status (with a minimal taxable basis) as Real Estate Funds.
The Regulated Real Estate Company will not be subject to the AIFMD Regulations.
The Regulated Real Estate Company regime is open to existing Real Estate Funds as well as to other qualifying real estate companies (which meet the various conditions imposed by the proposal, e.g. in terms of type of activities). The existing Real Estate Funds should request their authorisation within four months following the coming into force of the law (to be laid down by Royal Decree).
As the bill is drafted today, it offers a parallel regime to the existing Real Estate Funds regime, while not being caught by the AIFMD Regulations (with their benefits and disadvantages). We do feel however that this is a missed opportunity to create a private regulated Real Estate Fund regime, which could in our view be a real catalyst for the Belgian real estate fund market.
If you would like to raise any questions or remarks, please do not hesitate to contact the undersigned or your regular PwC contacts.