Securitisation of Real Estate - Luxembourg Residence Permit Solution for HNWI - Obtaining a Tax Agreement in Luxembourg

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Corporate, Funds and Family office

Funds - Securitisation - Real Estate - Investors - Debt Instruments - Project Financing

Family Office - HNWI - Residence Permit - Applicant Revenues - Becoming Resident

Corporate - Advance Tax Decision - Request - Luxembourg Tax - Ruling


Securitisation for Real Estate Projects

Three examples of real-estate securitisation opportunities:

Project financing:The securitisation vehicle issues securities (debt instruments or certificates) and uses the proceed of such issuance to invest into a specific development project with the objective of selling this project in a relatively near future (usually within 3 years). The securitisation vehicle will receive the proceeds of the sale of the project over the coming three years or upon completion and will pay an income to the security holders, either based on fixed interests or a variable interest or a combination of both.

Real Estate financing: Existing real estate can be bought or refinanced using securitisation vehicles. This is usually done in order to replace bank financing, where existing credit lines are needed for new projects. The income generated from rental income generates the income stream for investors. Again the relatively stable coupon associated with this type of financing can be attractive to investors.

Private Real Estate: Private investors can transfer their investments by using a securitisation vehicle. The profit realised upon disposal of the estate can be utilised to develop or buy another real-estate object. By using the securitisation vehicle like a fund, they are able to share the risk and potential returns associated with the target project. This allows investors to reduce their risks on a single project and spread the risk between them. 

Private real-estate ownership or financing for a family usually takes the form of a real-estate securitisation fund where family members own part of the real-estate portfolio through ownership of fund units. These units can capitalise the income or pay-out dividends. Institutions usually issue debt instruments from their securitisation vehicle to attract investors and usually pay a fixed or variable coupon.The securitisation vehicle can either buy the asset or only securitise the risk associated with the development or rental income of the real-estate objects.

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Read Also :

  Securitisation Funds in Luxembourg

  Funds services

  Real Estate Vehicles



Luxembourg - Residence Permit Solution for HNWI

HNWIs who would like to establish their residence in Luxembourg are subject to the Luxembourg law on freedom of movement of persons and immigration; family members (spouse and children) of the applicant can also be awarded a residence permit.

Conditions, defined by the Law, to be fulfilled:

If the presence in Luxembourg of the applicant does not imply a threat for the public order, public health or security

If the applicant can prove that he/she and relatives is/are covered by a health insurance scheme

If the applicant has an appropriate place to live in Luxembourg

Moreover, the applicant has to prove that he/she has sufficient resources to leave. Regarding the “Règlement Grand Ducal” of 11 August 2001, it means that the revenues of the applicant must be equal or higher than the Luxembourg wage for non qualified people.  This amount applies to each adult person in a household.

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Read Also :

  Family Office Services

  Wealth structuring

  Becoming resident in Luxembourg



Request of a Ruling in Luxembourg

To obtain an Advance Tax Decision from the tax authorities, the taxpayer must write a request (the Request) by mail to the "Administration of Contribution Directes" of which he depends.

The Request for an A.T.D. must describe in detail the taxpayer, its activities and the third parties involved in the transaction.

The Request should mention in detail the operation which is contemplated by the taxpayer.

A detailed analysis of the corporate and tax law should justify the Request of ruling and the motivation of the tax treatment applicable to such operations.

Finally the Request should also certify true and accurate the facts which are mentioned in the Request.

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Read Also :

  Corporate services

  Fund services

  Funds in Luxembourg



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