Corporate vehicles

Minimum capital

What is the minimum capital required to set up each type of corporate vehicle used to invest in real estate?

UK - England and Wales UK - England and Wales

UK - England and Wales

Limited partnership

Must include at least one limited partner and limited partners must at the time of entering the partnership contribute a sum as capital valued at a stated amount. No pure capital can be returned to investors except on the winding up of the partnership without attracting clawback risk on such amounts. Although there is no legal minimum, there will be a threshold for commercial viability to ensure the professional costs of the establishment and administration of a property fund are met.

Limited liability partnership

No minimum requirement other than for commercial viability. No distinction is required between the capital and the loan commitments from investors.

Investment syndicate trust

No minimum requirement other than for commercial viability. 

Property unit trust

In the case of a fund authorised by the Financial Conduct Authority (FCA) directed at retail investors it is likely that the fund’s prospectus will contain a minimum overall funding target so that there is a realistic prospect that the investment objective can be achieved and the manager remunerated on a commercially viable basis, because retail funds have to meet mandatory diversification requirements and will have certain fixed operation costs. The minimum target (the minimum aggregate subscription for viability) depends on the fund’s investment objectives and the remuneration expectations of the manager.

Non-FCA-authorized funds, often have a narrower investment focus and target a narrower investor basis (for example institutional investors only). There is more flexibility concerning the minimum amount that needs to be raised to reach the viability threshold.

Limited company

There are no minimum subscription requirements for a private limited company.

Public limited company

The minimum authorized amount of share capital for a public company is £50,000, of which at least 25% must be paid up (of the nominal amount and of any premium) .

REIT

There is no minimum capital requirement but the company must be listed.