The Royal Decree of 9 November 2016 on Belgian specialised real estate investment funds has been published in the Belgian Official Gazette of 18 November 2016.

In principle the Royal Decree will enter into force on 28 November 2016 (10 days after its publication). It will then be possible to constitute a specialised real estate investment fund by filing an application for registration with the Belgian Ministry of Finance.

The specialised real estate investment fund, also known as the FIIS/GVBF (“Fonds d’investissement immobilier spécialisé”/“gespecialiseerd vastgoedbeleggingsfonds”), is a dedicated real estate investment vehicle for institutional and/or professional investors. The Royal Decree of 9 November 2016 introduces an attractive regulatory framework for the FIIS/GVBF. For example: no listing is required, there is no risk diversification requirement, there is no cash trap (IFRS accounting standards apply) and institutional/professional investors can hold all the shares of the FIIS/GVBF.

The FIIS/GVBF also benefits from an advantageous tax regime which was largely established by the Program Law II of 3 August 2016. This tax regime is identical to the one that applies to SIRs and SICAFIs and one of the key elements is the limited notional corporate tax base. The Royal Decree of 9 November 2016 now completes the tax framework by introducing the necessary withholding tax exemptions with respect to the FIIS/GVBF in the Royal Decree holding implementation of the Belgian Income Tax Code.

A more detailed description of the legal and tax regime of the FIIS/GVBF can be found in our previous newsletter on the subject.