Fund-Technology.com

German Funds using offshore companies to invest in UK real estate

Posted: 11 July 2008

Recent changes to the German Investment Act have made it easier for German investment funds to incorporate offshore companies for use when acquiring UK or other real estate.

Ogier have recently completed several transactions for German fund clients acquiring UK real estate, have developed know how and precedents for use by German funds and with offices in offshore jurisdictions including Jersey, Guernsey, Cayman and BVI should be ideally placed to meet the particular needs of a client.

In the past, for a German fund to be able to set up an offshore company, regulatory approval was required from the German Federal Financial Supervisory Authority (Bundesenstalt für Finanzdianstleistungsanfsicht BaFin).

This approval process took up to 3 months or longer. One of the recent changes to the Act is to abolish the requirement for prior regulatory approval to be obtained.

This has permitted offshore companies to be used where previously transaction timetables could not afford to wait three months for a regulatory approval.
The Act also now allows greater flexibility for real estate funds. Previously funds were not allowed to invest in real estate companies that held participations in other real estate companies. This restriction has now been removed, although an indirect participation must be a 100% holding.

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