Real Estate Investment Funds in Switzerland

Swiss legislation on real estate investment funds

Real estate investment funds (REITs) in Switzerland fall under the governance of several laws and ordinances. Among these, the Collective Investment Schemes Act (CISA) is the most important. Like all other types of Swiss investment funds, REITs fall under the supervision of the Financial Market Supervisory Authority (FINMA).

Compared to other types of investment structures, Swiss REITs can be actively managed which means their main goal is to obtain returns on their investments. In order to set up a real estate investment fund in Switzerland, the Swiss Stock Exchange required a minimum share capital of 100 million CHF and at least 25% of their shares must be made available to the public for purchase.

For more information about the legislation on REITs, you can refer to our lawyers in Switzerland.

Vehicles to be registered as REITs in Switzerland

Swiss REITs are deemed open-ended retail funds that can invest in the following:

• -          real estate property;
• -          real estate companies;
• -          units in other investment funds;
• -          foreign real estate property.

There are several types of structures that can be employed in order to open a Swiss real estate investment fund. Among these are:

• -          limited partnerships;
• -          investment companies with variable capital (SICAV).

If you want to open a REIT in Switzerland and need assistance, do not hesitate to contact our law firm.

Taxation of Swiss REITs

The first step when registering a REIT in Switzerland is to select the type of vehicle to use. This selection is usually made taking into account the tax particularities related to the structure. Swiss real estate investment funds are subject to the following taxes:

• -          the corporate tax;
• -          the capital tax;
• -          withholding tax.

SICAV companies and limited partnerships for collective investment schemes earning incomes from real estate are subject to a reduced corporate tax. The capital tax applies at cantonal and municipal levels; therefore, different rates apply. With respect to the withholding tax applied to REITs, SICAV companies and limited partnerships are not taxed on incomes derived from real estate property.

Our Swiss lawyers can explain in detail how the taxation of REITs occurs.