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Identity
Sicafi

Definition

 

A SICAFI (fixed capital real estate investment trust) is:

  • An undertaking for collective investment (OPC) in direct or indirect property assets,
  • Set up on the basis of the Royal Decree of 10 April 1995, replaced by the Royal Decree of 7 december 2010,
  • Set up in the form of a limited liability company or public limited partnership. Aedifica is a limited liability company,
  • Quoted on the stock exchange, where at least 30% of shares are traded on the market,
  • The activity of which is restricted to property investments.

SICAFI are regulated by the Banking, Finance and Insurance Commission (CBFA) and have to follow extremely strict rules governing conflicts of interest.

 

Specific regulations

 

Property investment

Each property can only represent a maximum of 20% of the total assets in order to limit the risk per property.

 

Accounting

European legislation specifies that SICAFI, along with all listed companies, must prepare their consolidated annual accounts in accordance with the IAS/IFRS international system of reference. Given that property investments constitute the SICAFI’s main assets, SICAFI must pay particular attention to appraising the fair value of their properties, i.e. in technical terms, to applying standard IAS 40.

 

Valuation

The property assets are valued on a quarterly basis by an independent expert at their fair value. They are entered in the balance sheet at this value. There is no depreciation of properties.

 

Result

As return on capital, the company is required to distribute a sum corresponding to at least the positive difference between the following amounts:

  • 80% minimum of an amount equal to the sum of the corrected result and net capital gains on realisation of investment properties not exempt from the distribution requirement (cf. Glossary),
  • and the net decrease, during the financial year, in the company’s borrowing (cf. Glossary).

 

Debt
Borrowing is limited to 65% of total assets (cf. Glossary).

 

Fiscal status

A SICAFI is not subject to corporate tax (except on non-allowable expenses (DNA) and abnormal or benevolent benefits), provided that at least 80% of net proceeds are distributed in the form of dividends.
The withholding tax on dividends is limited to 15%, and is 0% for a SICAFI with more than 60% of its property investments in the residential sector. Aedifica shall benefit from this exemption from withholding tax, in accordance with Article 106 § 8 Royal Decree/Income Tax Code, since it intends to invest a minimum of 60% in properties in Belgium which are given over to or intended exclusively for housing.
Companies applying for approved SICAFI status, or which merge with a SICAFI, are subject to a reduced rate of taxation, which today stands at 16.995% (i.e. 16.5% plus the crisis tax uplift of 3%), referred to as the exit tax, i.e. the rate of corporate tax which has to be paid in order to leave the common law system.

 

SICAFI are investment instruments which can be compared, in particular, to the Dutch FBIs (Fiscale beleggingsinstellingen), the French SIICs (Sociétés d’Investissements Immobiliers Cotées) and the REITs (Real Estate Investment Trusts) which exist in a number of countries, including the United States.