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Real Estate Investment Funds
Real estate investment funds are relatively new in Costa Rica, but have had a huge impact in the growth and direction of the real estate sector. Real estate investment funds have become not only a sound investment for individuals and companies, but a guiding instrument for the sector in general
To date, more than 2,000 high net worth individuals and organizations have allocated investments through REI funds that add up to approximately half a billion dollars.
REIT Regulations Real estate investment trusts do not exist in Costa Rica as such, but as mentioned before, a similar figure, is found in the REI fund. Authorized to operate in January 2000, REI funds are collective investment instruments that invest in real estate and real estate related opportunities producing high fixed returns to their investors through long term leases.
REI funds have important advantages such as the ability to diversify risk, optimize returns, maintain an adequate level of liquidity within the investment portfolio and facilitate the participation of individual and small investors. REI funds are managed by an administrative corporation duly registered, licensed and supervised by the Securities Regulator.
The funds ultimate goal is to successfully invest in real estate products for sale or rent. REI funds in Costa Rica are closed funds, meaning that they can only emit a predetermined amount or value of equity stock that is guaranteed in an equal manner with the funds managed and owned assets. REI funds are also attractive for the fiscal incentives applied to the capital gains tax, reducing it to an imposition of 5%.
