By Danessa O. Rivera
[ tribune.net.ph ]
10/07/2010
The Securities and Exchange Commission (SEC) has approved the listing rules for Real Estate Investment Trust (REIT) proposed by the Philippine Stock Exchange (PSE) and will take effect tomorrow.
A REIT is a stock corporation established in accordance with the Corporation Code of the Philippines and the rules and regulations promulgated by the SEC principally for the purpose of owning income-generating real estate assets which include offices, apartment buildings, hotels, warehouses, shopping centers and highways.
The REIT listing rules will put into motion Republic Act 9856, otherwise known as the REIT Act of 2009 which took effect last Feb. 9 that provides tax incentives to the REIT and the investors of REITs to expedite its local development.
Among the incentives provided under the law are additional deductions based on the dividends distributed to its stockholders REITs are allowed to claim and the transfer of real estate to a REIT that shall be subject to a discount of 50 percent of the applicable documentary stamp tax, registration and annotation fees.
Furthermore, the REIT Act of 2009 exempts overseas Filipino investors from dividend tax for a period of seven years from the effectivity of the REIT revenue regulations.
Under the REIT listing rules, corporations must be a stock corporation established in accordance with the Philippine Corporation Code for the purpose of owning income-generating real estate assets.
It must also have a dividend policy of distributing annually at least 90 percent of its distributable income as dividends to its shareholders in accordance with the REIT Act of 2009 and its implementing rules and regulations.
A REIT must also be a public company upon and after listing wherein it must have at least one thousand (1,000) public shareholders each owning at least fifty (50) shares of any class of shares who in the aggregate own at least one-third of the outstanding capital stock.
In addition, the REIT must also have a minimum paid-up capital of P300 million, at least 75 percent of the deposited property must be invested in, or consist of, income-generating real estate and at least one-third of the board of directors as independent directors, to name a few provisions of the general criteria for REIT listings.
The REIT listing rules was approved by the PSE Board of Directors on June 25, 2010 and is expected to further develop the real estate industry by releasing capital into land and buildings, increasing productivity and generating jobs. * Danessa O Rivera
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