Land Trust

Definition

REITs (Real Estate Investment Trusts) are an indirect real estate investment vehicle that use the fund raised from a multiple number of investors to either purchase a real estate or invest in a real estate development project and offers the profits to the investors.

Advantages

Tax benefits
  • 30% discount on Real Estate Acquisition Tax
  • Reduced corporate income tax in case at least 90% distributable dividends are distributed
  • Exemption from comprehensive real estate holding tax and a low land tax rate (0.2%: *up to 0.7% applicable to a direct ownership)
Liquidity
  • When necessary, REITs registered on the exchanges are cashable
Stability憍Profitability
  • Excellent opportunities to invest in large-scale/quality real estate

Types of REITs

  Self-Managed REITs Externally Managed REITsvv Corporate Restructuring (CR) REITs
Investment objects All types of real estate and related rights1) All types of real estate and related rights Real estate intended for restructuring2)
Corporate form Actual entity(Resident execs./staffs) Nominal entity(Non-resident) Nominal entity(Non-resident)
Asset structure Real estate to take up at least 70% Real estate to take up at least 70% Real estate for restructuring to take up at least 70%
Dividend At least 90% to be offered in obligatory dividend At least 90% to be offered in obligatory dividend(excess distribution allowed) At least 90% to be offered in obligatory dividend(excess distribution allowed)
Survivability Permanent Permanent Temporary
Survivability Permanent Permanent Temporary
Development projects Up to 30% of total assets Up to 30% of total assets Up to 30% of total assets

Operational structure