Company Objective – Institutional Framework

Company Objective – Institutional Framework 2017-12-17T12:48:25+00:00

Real Estate Investment Companies (REICs) are tax-transparent vehicles, similar to the REITs in the US and other countries, that invest in real estate and usually distribute a large portion of their net earnings as dividends. A REIC is obliged to list on a European stock exchange within a certain time period from its establishment. In this way, an investor benefits from a highly liquid way of investing in otherwise illiquid real estate assets.


REICs benefit from a number of tax-exemptions, making them a highly attractive investment medium. The main exemption is from company Income Tax. Instead, they pay an annual Investment Tax based on the value of their property assets and cash balances. They are exempt from Property Transfer Tax on acquisitions (currently 3%) and they are exempt from the Supplementary Tax on rental income. Importantly, they are exempt from withholding tax on dividends.

Investment Parameters

Allocation to real estate: At least 80% of a REICs assets must be invested in real estate or in regulated mutual real estate funds in the European Union.

Geographical Area (for real estate investments): REICs can invest without restriction within the European Economic Area. Investments outside this region are limited to 20% of the total investments.

Asset Type: Commercial income-producing property, i.e. retail, offices and industrial, as well as hotels, marinas and residential properties. No property can exceed 25% of the total portfolio value. A maximum of 25% of the portfolio can be invested in residential property.

Real Estate Development: REICs are permitted to undertake development up to an amount of 40% of their total assets and buy land for future development. They can also enter into a pre-agreement for the purchase of a property under development with certain conditions.

SPV companies: REICs are permitted to buy property owning SPVs, or holding companies which own such SPVs so long as they purchase at least 80% of the shares. They can also set-up subsidiaries to enter into JVs to undertake developments. If the SPV is a Greek S.A. then it is taxed in the same way as its parent REIC.


Prior to the sale or purchase of a property asset, a valuation by a qualified appraiser is required. REICs are also obliged to value their assets and publish the valuation every six months (end of Q2 and end of Q4).


REICs are permitted to have leverage of up to 75%.  Also, financial leasing is permitted up to a total of 25% of the company’s equity.

Dividend Distribution

Once listed, REICs are obliged to distribute at least 50% of their profits.

REICS in Greece are governed by the provisions of article 19 of Law 4141/2013 as this amends articles 21-31 of Law 2778/1999 “Real Estate Mutual Funds – Real Estate Investment Companies and other provisions”, as amended by Laws 2892/2001, 2992/2002, 3581/2007 and 4209/2013 as well as the provisions of Law 2190/1920.

The institutional framework is supplemented by the stock market legislation, which applies to all listed companies – as all REICs must be listed within a certain time period – and by provisions of the Capital Markets Commission.