A change of regulations by the Department of Justice presents a major opportunity for investors and Irish business.
For a number of years, Ireland has offered an attractive package to potential investors in the country. While the Industrial Development Authority (IDA) soaks up much of the public attention for this work, the Department of Justice has also sough to offer attractive residency terms for those willing to invest. A forthcoming change to the law on Real Estate Investment Trusts (REITs) looks set to raise the bar even further.
REITs (Real Estate Investment Trusts) are useful vehicles for buying exposure to commercial property, and listed on the stock exchange. Since they were introduced to law earlier this year, two such vehicles have already listed – Green REIT and Hibernia REIT, which raised €365m in its flotation this week.
Why is this of relevance? Well, the Department of Justice is expected to announce shortly that REITs are an acceptable investment vehicle for non-EU nationals who are seeking residence in the country.
While an official announcement has yet to me made, the scheme is expected to offer a stamp 4 residence permit for an investor, his or her partner, and all children under the age of 18 for a non-EU national who invests at least €500,000 in REIT shares. After hanging on to the shares for five years, they will be in a position to apply for Irish citizenship.
Under the highly-anticipated regulations, successful applicants only need to travel to Ireland once a year rather than maintaining permanent residence. This is a key difference from most other EU countries, which only allow extension of residency permits for people who continually reside in the jurisdiction.
All this puts an amply-sized ‘open for business’ sign on the Irish commercial property market. Investors who commit for five years, at a time when prices are still relatively low but recovering, will be able to continue living in their home countries and claim an Irish passport for themselves and their family in due course. Moreover, the managed nature of an REIT allows investors to benefit without having the hands-on involvement of a direct property purchase.
A Significant Impact
As you can imagine, the proposed change is going to be of serious interest for international investors, and far-thinking players in the domestic market. If this proposed policy goes ahead, and has its intended effects, the impact on Ireland’s commercial property sector – and commercial rents – will be significant. For this reason, it’s important that any businessperson (not just those potentially investing in Irish property) pay close attention to the new rules concerning REITs when they emerge.
At DCA Accountants and Business Advisors, we assist many businesspeople and investors in dealing with the impact and seizing the opportunities created by changing Government legislation. If you would like our advice on this or any other regulator change, simply contact us to set up an initial, no-obligation meeting.