REALWorld Law

Corporate vehicles

Minimum capital

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

Angola

Angola

The minimum share capital requirements are as follows:

  • LDA:  no minimum share capital required. Shareholders are free to agree on the share capital amount as they see fit.
  • SA: the equivalent in kwanzas to US$20,000.
Australia

Australia

None of the corporate vehicles normally used for real estate investment in Australia has a minimum capital requirement.

Belgium

Belgium

Preliminary remark: The contemplated new company code that is likely to enter into effect in the course of 2018 will provide a number of changes in respect of capital requirements for companies, making it more flexible to incorporate companies.

Closed limited liability company (besloten vennootschap met beperkte aansprakelijkheid, (BVBA)/société privée à responsabilité limitee (SPRL)

Currently, the minimum capital is still €18,550, of which at least €6,200 must be paid up. Above this minimum, each share must be paid in up to 20 percent.

Limited liability company (naamloze vennootschap, NV/société anonyme, SA)

Currently, still €61,500 fully paid up. Above the minimum each share must be paid in up to 25 percent.

B-REIT

€1,200,000 to be fully paid up at all times.

Bosnia-Herzegovina

Bosnia-Herzegovina

Limited liability companies

KM 1,000 in the Federation of Bosnia and Herzegovina and KM 1 in the Republika Srpska

Joint stock companies

In the Federation of Bosnia and Herzegovina the minimum capital requirement is KM 50,000, while in the Republika Srpska, it is KM 20,000 without a public offering and KM 50,000 with a public offering.

Unlimited partnerships and limited partnerships

Partnerships do not have minimum or maximum capital requirements.

Canada

Canada

There are no minimum capital requirements.

China

China

Where the total investment amount is at least US$10 million, the registered capital of a real estate foreign invested enterprise must be an amount representing at least 50% of its total investment amount.

Croatia

Croatia

Limited liability company (društvo s ograničenom odgovornošću – doo)

HRK20,000.

Public limited liability company (dioničko društvo – dd)

HRK200,000.

Public partnership (javno trgovačko društvo – jtd)

No minimum capital is required.

Limited partnership (komanditno društvo – kd)

No minimum capital is required.

Closed end real estate investment fund (zatvoreni investicijski fond s javnom ponudom za ulaganje u nekretnine)

Management company – minimum HRK1 million.

Fund – minimum HRK5 million.

At least 60% of the net value of the fund must be invested in real estate.

Czech Republic

Czech Republic

Limited liability company (společnost s ručením omezeným – s.r.o.)

CZK1

Joint stock company (akciová společnost – a.s.)

CZK2,000,000 or €80,000

Unlimited partnership (veřejná obchodní společnost – v.o.s.)

Not applicable

Limited partnership (komanditní společnost – k.s.)

The partnership contract stipulates the minimum amount of the limited partner's contribution

Denmark

Denmark

Partnership (Interessentskab)

There is no minimum capital required to set up a partnership.

Public limited company (Aktieselskab)

A public limited company must have a minimum share capital of DKK 400,000. There is no maximum share capital. A minimum of 25% of the share capital must be paid when the company is registered.

Private limited company (Anpartsselskab)

A private limited company must have a minimum share capital of DKK 40,000. There is no maximum share capital. A minimum of 25% of the share capital but not less than DKK 40,000 must be paid when the company is registered.

Limited partnership (Kommanditselskab)

There is no minimum capital required to set up a limited partnership.

Limited partnership company (Partnerselskab)

A limited partnership company must have a minimum share capital of DKK 400,000. There is no maximum share capital. A minimum of 25% of the share capital must be paid when the company is registered.

France

France

SCI (société civile immobilière) - real estate civil company

€1

SNC (société en nom collectif) - partnership

€1

SARL (société à responsabilité limitée) – limited liability company

€1

SA (société anonyme) – stock corporation

€37,000

SAS (société par action simplifiée) – simplified stock corporation

€1

SCPI (société civile de placement immobilier) – real estate civil investment company

€760,000 (each share must have a minimum face value of €150)

SIIC (société d’investissement immobilier cotée) – listed real estate investment company

€15,000,000

Germany

Germany

Note that any of the relevant entities could qualify as an alternative investment fund (AIF), in which case special regulatory and tax rules might apply.

Gesellschaft mit beschränkter Haftung (GmbH) – limited liability company

In general, €25,000. 

However, German legislation offers an alternative entity (an Unternehmergesellschaft) with a registered share capital as low as €1. This specific corporate form is not very suitable for real estate investments since third parties may be reluctant to do business with an entity with such a limited registered share capital. In addition, profits may not be distributed in full but must instead be partially retained. Therefore, potential investors are advised to use a GmbH with a registered share capital of at least €25,000.

Experience so far has shown, however, that the Unternehmergesellschaft has gained popularity as the form of entity for a general partner within a limited partnership.

Aktiengesellschaft (AG) – stock corporation

€50,000.

Real estate investment trust (REIT)

€15,000,000.

Immobilien Sondervermögen – real estate fund

A real estate fund can only be set up and managed by an alternative investment fund asset management company (AIF-Kapitalverwaltungsgesellschaft). In such cases special regulatory and tax rules applicable to alternative investment funds must be considered.

Kommanditgesellschaft (KG) – limited partnership

None. However, if a limited liability company (GmbH) is chosen as general partner, the requirement applicable to that entity applies.

Hong Kong

Hong Kong

Companies

The Companies Ordinance does not prescribe any requirement for a minimum amount of nominal share capital. A company limited by shares incorporated in Hong Kong can be formed by at least one founder shareholder taking at least one share in the company.

Branches of a foreign corporation

There are no minimum capital requirements.

Partnerships

There are no minimum capital requirements, although the partnership agreement may set out the initial capital that each of the partners must contribute to the partnership.

Trusts

There are no minimum capital requirements.

Hungary

Hungary

Limited liability company (korlátolt felelősségű társaság)(kft)

HUF3,000,000 (with a minimum of HUF100,000 per member)

Company limited by shares (részvénytársaság)(zrt or nyrt)

  • Private company limited by shares (zrt): HUF5 million
  • Public company limited by shares (nyrt): HUF20 million (nevertheless, in the case of a REIT (a real estate investment trust) the initial capital requirement (including subscribed capital, capital reserve and profit reserve) is at least HUF5 billion)

Limited partnership (betéti társaság)(bt)

There is no minimum capital requirement.

Unlimited partnership (közkereseti társaság)(kkt)

There is no minimum capital requirement.

Real estate investment fund

Investment fund manager (a company limited by shares or a branch office of a foreign company)

Normally €300,000 but can be higher in some cases. If the investment fund manager operates as a branch office, the minimum capital is the endowment capital (ie the capital provided to the branch, free of restrictions and encumbrances, in order to allow it to operate). The endowment capital requirement does not apply to the branch office of an investment fund manager established in another EU member state.

Investment fund

  • Public real estate investment funds: HUF1 billion
  • Private real estate investment funds: HUF500 million
Ireland

Ireland

Company

A public limited company must have a minimum share capital of €25,000, at least 25% of which must be fully paid-up before the company commences business or exercises any borrowing powers. A private company limited by shares and an unlimited company have no minimum capital requirements but they must issue at least one share upon incorporation. This share can have a low nominal amount per share (eg €0.01).

Collective investment vehicle

For a unit trust or CCF there is no minimum capital requirement, although the offering document may specify the minimum viable size below which the CIS will not launch. A VCC or ICAV, established in accordance with the Alternative Investment Fund Managers Directive as a self-managed Alternative Investment Fund, that does not employ a management company or fund administration company must have a minimum paid-up share capital of €125,000 within three months of authorization by the Central Bank of Ireland.

The initial capital requirement for the management company of an AIF or UCITS (Undertaking for the Collective Investment in Transferable Securities) is €125,000. When the net asset value of the CIS under management exceeds €250 million, a management company must provide an additional amount of capital equal to 0.02% of the amount by which the net asset value exceeds €250 million.

The minimum capital requirement for a management company of an AIF or UCITS is the higher of the initial capital requirement plus an additional amount (if required) and one quarter of its total expenditure taken from the most recent annual accounts

Limited partnership

Individual partners contribute partnership capital as set out in the limited partnership agreement. A statement of the amount of capital contributed by each limited partner must be provided to the CRO together with the application to register the limited partnership. General partners are not required to contribute capital to the limited partnership.

Real Estate Investment Trust

The minimum capital requirement for a public limited company (which is the typical corporate form of a REIT) is €25,000.

Italy

Italy

Società a responsabilità limitata (Srl)

The minimum corporate capital required to set up an Srl is fixed at €1. If the Srl does not have a corporate capital of at least €10,000, however:

  1. Contributions-in-kind are not permitted
  2. Cash contributions must be delivered to the directors of the company
  3. An amount corresponding to 1/5 of the net income resulting from the relevant financial statements must be allocated to a special legal reserve until the net worth of the company reaches at least €10,000, and
  4. Such reserve may be used only for the accrual of the corporate capital or to cover losses, if any.

Furthermore, the corporate capital shall be entirely paid up in case the Srl is incorporated by only one member (so called ‘Srl unipersonale’).

Società a responsabilità limitata semplificata (Srls)

The corporate capital required to set up an Srls can be between €1 and €9,999. No corporate entity can qualify as a shareholder of an Srls.

Società per azioni (SpA)

The minimum corporate capital required to set up an SpA is fixed at €50,000.

Japan

Japan

TMK

There is no minimum capital amount required.

GK (for TK-GK)

There is no minimum capital amount required.

GK (for Real Estate Specified Joint Enterprise using TK-GK)

To obtain the real estate specified joint enterprise operator license, the minimum capital amount is JPY100 million.

There is no minimum capital amount for the filing of a special enterprise.  (To be an Item 3 operator, the minimum capital amount is JPY50 million , and to be an Item 4 operator, it is JPY10 million.)

Investment Corporation (for J-REIT)

The minimum capital amount is JPY100 million.  For an investment corporation to be listed, the minimum net asset amount is JPY1,000 million.

Netherlands

Netherlands

Limited liability company (B.V.

No minimum capital requirements 

Public limited company (N.V.)

€45,000

Fiscal investment vehicle (Fiscale Beleggings Instelling)

Nil /€45,000 (depending on which type of entity is used)

Limited partnership (Commanditaire Vennootschap)

No capital requirements 

Nigeria

Nigeria

Private Limited Liability Company

A private limited liability company is required to have a minimum authorised share capital of NGN10,000 with at least 25% of its share capital allotted to its subscribers at incorporation.

Public Limited Liability Company

A public limited liability company is required to have a minimum authorised share capital of NGN500,000 with at least 25% of its share capital allotted to its subscribers.

Real Estate Investment Trust

The minimum paid up capital for a Fund Manager is NGN150 million, while the minimum paid up capital for the Trustees is NGN300 million. An initial public offer for units of the investment scheme must be a minimum of NGN1 billion, while subsequent offers cannot be less than NGN500 million.

Real Estate Investment Company

A private limited company is required to have a minimum authorised share capital of NGN10,000 while a public company is required to have a minimum authorised share capital of NGN500,000. An initial public offer for units of the investment scheme must be a minimum of NGN1 billion , while subsequent offers cannot be less than NGN500,000.

Norway

Norway

Aksjeselskap/AS (private limited company)

NOK30,000

Allmennaksjeselskap/ASA (public limited company)

NOK1 million

Kommandittselskap/KS (limited partnership)

The minimum contribution for a limited partner (kommandittist) is NOK20,000 and the minimum contribution for the general partner with unlimited liability (komplementar) is 1/10 of the company’s capital subject to a minimum of NOK2,223. Thus, the minimum capital required is NOK22,223.

Ansvarlig selskap/ANS (general partnership with unlimited liability) and ansvarlig selskap/DA (general partnership with pro rata liability)

No minimum contribution is required.

Poland

Poland

Limited liability company

PLN5,000. The nominal value of each share cannot be lower than PLN50.

Joint stock company

PLN100,000. The nominal value of each share cannot be lower than PLN 0.01.

Limited partnership

There is no minimum capital for a limited partnership.

Unlimited partnership

There is no minimum capital for an unlimited partnership.

Closed-end real estate investment fund

The management company’s initial minimum capital must be no less than the PLN equivalent of €125,000. If the scope of the management company's activities includes discretionary management of a securities portfolio, the initial minimum capital must be the PLN equivalent of €730,000.

Total payments to the fund, to the amount stipulated in the fund's articles of association, must be at least PLN 4,000,000. Where the fund issues non-public investment certificates, the total minimum amount of payments to the fund will be set out in the fund’s articles of association.

Portugal

Portugal

Sociedade por Quotas (SQ)

Minimum share capital of €1 or great than or equal to €2, where the company is owned by one or two or more shareholders respectively.

Sociedade Anónima (SA)

Minimum share capital of €50,000.

Romania

Romania

Unlimited partnership

There is no requirement for minimum capital.

Limited partnership

There is no requirement for minimum capital.

Joint stock company

RON 90,000 (which can be amended by the Government to the equivalent of €25,000, once every two years and so we recommend that when such a company is registered, the subscribed capital should be at least the RON equivalent of €25,000).

Partnership limited by shares

As for a joint stock company

Limited liability company

RON 200

Russia

Russia

Limited liability company (OOO)

RUB10,000. The charter capital must be paid prior to the deadline set when the company is established but not later than four months after the registration of the company.

Joint stock company (AO)

RUB10,000. At least 50 percent of the shares must be paid for within three months of the official registration of the company, and the remaining shares must be paid for within one year of the official registration.

Slovak Republic

Slovak Republic

Limited liability company

The minimum capital required to set up a limited liability company is €5,000 (the minimum contribution by each shareholder to the share capital amounts to €750). The total value of paid-up contributions must amount to at least 50% of the minimum amount of registered capital.

Joint-stock company

The minimum capital required to set up a joint-stock company is €25,000.

Unlimited partnership

No minimum capital is required by law.

Limited partnership

Not applicable. However, limited partners must contribute at least €250 to the partnership.

SJSC

The minimum capital required to set up a simple joint-stock company is €1.

Spain

Spain

Limited liability company – sociedad de responsabilidad limitada (SL)

€3,000

Public company – sociedad anónima (SA)

€60,000

Limited partnership – sociedad en comandita (S. en Com. or S. Com.)

Not applicable.

Partnership limited by shares – sociedad en comandita por acciones (S.Com. p. A.)

€60,000

General partnership – sociedad de responsabilidad colectiva

There is no minimum capital set by law for the sociedad de responsabilidad colectiva.

Real estate investment fund – fondo de inversión inmobiliario (FII)

For an FII: €9 million.  The number of unit holders must be at least 100.

Real estate investment company – sociedad de inversión inmobiliaria (SII)

€9 million. The law requires that this sum is completely disbursed when the company is formed. There must be at least 100 shareholders.

Real estate investment Trust – sociedad anónima cotizada de inversión inmobiliaria (SOCIMI)

€5 million. The law requires that this sum is completely disbursed when the company is admitted to trading. The minimum number of shareholders will depend on the listing of the Company´s shares in the MAB or in the Stock Exchange.

Sweden

Sweden

Limited liability company

SEK50,000 for a private limited liability company and SEK500,000 for a public limited liability company.

Partnership

There is no minimum capital requirement for partnerships.

Thailand

Thailand

Limited Company

The limited company can be formed with a minimal registered capital starting from THB 15.

REIT

A REIT in Thailand must have a minimum capital of THB 500 million.

United Arab Emirates - Abu Dhabi

United Arab Emirates - Abu Dhabi

(a) Within Abu Dhabi and outside the Abu Dhabi Global Market free zone

Limited liability company (LLC)

The UAE Companies Law does not prescribe any minimum share capital for an LLC. The LLC is required to have adequate share capital to achieve the purpose of its incorporation. Therefore, the adequate capital required for an LLC can be decided by its shareholders. There is no guidance issued to indicate the level of adequacy and neither is there any decision on the minimum share capital. The shares should be comprised of equal shares. In practice a notary public would usually accept a minimum share capital for an LLC in Abu Dhabi of AED 150,000 divided into equal shares, each with a minimum value of AED 1,000. Public subscription for shares is not permitted and the share capital must be paid up in full.

Although the UAE Companies Law provides that the shares in cash shall be deposited in a UAE registered bank, presently, there is no requirement to provide evidence of the deposit of the share capital in the bank.  Details of its share capital will be included in the LLC's memorandum of association which will need to be notarised by the UAE notary public as part of the incorporation process.

Public joint-stock company (PJSC)

The minimum share capital requirement is AED 10 million for a general company. This increases in the case of banks and insurance companies.

Given the substantial capital requirement, and the fairly restrictive rules of establishment and management, it is often not a suitable corporate vehicle for overseas investors wishing to establish a vehicle for investment purposes.

Private joint-stock company (private JSC)

The minimum share capital required is AED 5 million.

(b) Within the Abu Dhabi Global Market free zone

In the Abu Dhabi Global Market free zone, a public company’s minimum required allotted share capital is USD 50,000. Private companies do not have a minimum capital requirement.

United Arab Emirates - Dubai

United Arab Emirates - Dubai

a) Within Dubai and outside of the free zones

Limited liability company (LLC)

The UAE Companies Law does not prescribe any minimum share capital for an LLC. The LLC is required to have adequate share capital to achieve the purpose of its incorporation. Therefore, the adequate capital required for an LLC can be decided by its shareholders. There is no guidance issued to indicate the level of adequacy and neither is there any decision on the minimum share capital. The shares should be comprised of equal shares. In practice a notary public would usually accept a minimum share capital for an LLC in Dubai of AED 100,000 divided into equal shares, each with a minimum value of AED 1,000. Public subscription for shares is not permitted and the share capital must be paid up in full.

Although the UAE Companies Law provides that the shares in cash shall be deposited in a UAE registered bank, presently, there is no requirement to provide evidence of the deposit of the share capital in the bank. Details of its share capital will be included in the LLC's memorandum of association which will need to be notarised by the UAE notary public as part of the incorporation process.

Public joint-stock company (PJSC)

The minimum share capital requirement is AED 10 million for a general company. This increases in the case of banks and insurance companies.

Given the substantial capital requirement, and the fairly restrictive rules of establishment and management, it is often not a suitable corporate vehicle for overseas investors wishing to establish a vehicle for investment purposes.

Private joint-stock company (private JSC)

The minimum share capital required is AED 5 million.

b) Within the Jebel Ali Free Zone Authority

The minimum share capital is AED 1,000 and each share must have a minimum value of AED 1. There is no requirement to deposit the share capital in a UAE registered bank and therefore it is not necessary to provide evidence of the deposit of the share capital in the bank.

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 (unless the limited partnership is designated a ‘private fund limited partnership’, in which case no such restriction applies). 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-authorised 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 authorised amount of share capital for a public company is £50,000, of which at least 25% (of the nominal amount and of any premium) must be paid up.

REIT

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

UK - Scotland

UK - Scotland

Limited partnership

There must be 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 authorized 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 or the prescribed euro equivalent, currently set at EUR 57,100, of which at least 25% (of the nominal amount and of any premium) must be paid up.

REIT

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

Ukraine

Ukraine

Limited liability company and additional liability company

As from April 2011 there are no requirements as to the minimum charter capital of a limited liability company or additional liability company.

Joint stock company

The minimum charter capital of a joint-stock company should not be less than 1,250 times the minimum monthly wage stipulated by Ukrainian legislation at the moment of registration. The minimum share capital is about UAH 5 million.

Partnership and commandite partnership

There is no minimum charter capital requirement.

United States

United States

US limited partnership, US limited liability company and US general partnership

While there are generally no legal minimum capital requirements imposed by law, lenders and other third parties contracting with the partnership or LLC may impose certain minimum capital requirements.

Zimbabwe

Zimbabwe

Unit Trusts

Investment management companies (asset managers) and collective investment schemes are regulated by the Securities and Exchange Commission of Zimbabwe (SECZ). In terms of the licensing requirements, the collective investment schemes and the asset management company must have Capital adequacy requirement of net assets of ZWD 500,000.

Limited company

There are no minimum subscription requirements for a private limited company although in practice, companies usually start up with a low nominal amount of capital to avoid high stamp duties.

Public limited company

No minimum capital requirements are contained in the Companies Act. However, public limited companies may be required to have a certain amount of capital in the form of shares and the company must be listed on the Stock Exchange.

According to the Zimbabwe Stock Exchange listing rules, property companies and listed companies which carry out certain property-related transactions are subject to additional disclosure requirements, principally relating to valuations. Property dealing companies may be subject to different treatment depending on the circumstances of each case.