What are the advantages of Real Estate Fixed Capital Investment Companies (SICAFI)?

Portugal remains on the radar of real estate investment, both nationally and internationally, with demand in this sector increasing exponentially. Because?

Our country has become a world reference destination in the field of tourism, which ended up attracting the attention of potential investors. It was precisely this oscillation that caused a strong dynamism in the market, with a direct impact on transactions, property prices, and investment returns.

It is precisely on this last point that we dedicate attention to this blog article. Let us speak then of the Real Estate Fixed Capital Investment Companies, better known as SICAFI.

Decree-Law no. 71/2010 of 18 June enshrined in the Portuguese legal system the constitution of collective investment organizations (ICOs) and real estate investment funds (FII) in corporate form, referred to as real estate investment companies (hereinafter referred to as real estate investment companies) by SIIMO). Thus, in addition, to open real estate funds and closed real estate funds, SIIMO is added, which, in turn, is divided into open capital companies (“SICAFI”). These are governed, unless otherwise stated, by the closed real estate funds regime, while the variable capital real estate companies (“SICAVI”), are governed by the open real estate funds regime.

The growth in interest in this investment category has been noticeable in recent years. “To this end, a more favorable tax regime has contributed, in which gains are taxed almost exclusively“ on the way out ”, making it a good alternative in comparison to the (direct) holding of properties by real estate companies”, considers João Banza to the ECO.

Thus, one of the most attractive points of SICAFI is related to the fact that a large part of the income generated, such as property, capital, and capital gains, does not contribute to the determination of its taxable profit and is not subject to withholding tax when receipt. Do not forget also that the expenses related to this income are not tax-deductible and, not least, the exemption from the payment of the state and municipal surcharge.

It should also be noted that the fact that SIIMO can be self-managed constitutes one of the main advantages of the legal regime, giving investors greater freedom for superior intervention in the functioning and administration of the same, without the need for intervention by a management company.

Finally, and with regard to supervision, for the constitution of SIIMO (SICAFI and SICAVI), prior authorization from the Securities Market Commission (CMVM), and communication in the event of possible changes to the contracts between these and the depositary and/or marketing entities.

In the Castro Group, ICON SICAFI was created, a fixed capital real estate investment company, dedicated to investing in a portfolio of premium real estate assets, held from a long-term and income perspective.

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