1) What kind of fund is Propfund?

It is a blind-pool fund. The fund aims to use €10million in private equity and €20million in non-recourse German Bank financing to acquire high yielding apartment blocks in Berlin and neighbouring cities.

2) What are the criteria for purchasing real estate for Propfund?

-    The property has to be located within a well established city with a minimum of 50,000 inhabitants.
-    The fund will include residential and commercial properties with at least 5 units.
-    The maximum investment volume per building is €3 million.
-    Purchasing factor of the building must be 12.5 or lower.
-    The current occupancy rate (of the purchased building) should be at least 75%.

3) Who will be the representative of the investors within this company?

The investors participate in the Propfund company through a trustee limited partner. The intervention of a trustee limited partner is, according to many investors, a comfortable and hassle-free solution.

4) How are the profits of the investment distributed?

The gained profits of the society will be distributed to the investors of the Propfund company at the end of the Investment window (2020).

5) How much are the dividend distributions?

Once the fund is placed, all investors will receive an annual  dividend profit of 7.0%, which will increase during the course of the investment to an expected 10.01%.

6) Is Propfund Germany a safe Investment?

The acquisition, rental and resale of the fund will be managed by a professional and experienced German team. We are confident that the portfolio will continue to be rented out as the future demand for rentals is likely to far exceed supply. Many German experts are reporting of the forecasted increase in the German property market which has a huge potential for growth over the next 10 year investment period.

7) Why should I invest in Germany?

Germany is Europe’s leading economy, it has the highest productivity rate in the world, excellent infrastructure and legal framework. It offers security alongside great potential as the real estate market is undervalued and the influx of investors capitalising on this will increase the value of the market. The government want to attract international investors and offer incentives and competitive tax structures.

8) If I wish to exit in 5 years, can it be done and what % penalties will be applied?

Yes, you can sell your shares at anytime. If you sell your shares privately yourself then there is no penalty or charge for transfer of ownership. Propfund will provide an internal resale service to all shareholders. Your shares will be independently valued and you would receive 90% of the new value of the shares less the costs of the valuation.

9) Will I need to pay tax in Germany?

The objective of the fund is to generate a profit from the rental income on a yearly basis which will be paid to shareholders as a dividend payment each year. The profit will be declared on an annual basis as a taxable income for each shareholder. Based on this final taxable income the shareholder, regardless of whether he is an individual, a company or a pension scheme, has to pay tax in Germany beginning from 25% increasing to 43% should he get more than c100,000 in annual profits.

There is a double taxation agreement between Germany and many European countries which says, where the company or the property is based, the tax return has to be done. But all the taxes a foreigner has paid in Germany will be considered in the tax report in their home country. The tax payable in their home country will be reduced by the amount he paid in Germany. After closing the fund after 10 years, there is no German tax applicable to the capital gain on the shares in Germany, but the taxation law in the home country will have the final status and even if Germany demands no tax, capital gains tax will be applicable in the home country.

10) Is there any liability to the shareholder beyond the amount invested?

The fund cannot at anytime legally demand shareholders to invest more money than the original equity invested. Propfund does not forecast to call for further equity from the shareholders but if a situation arises where this is required, then a shareholders meeting would be called, but there is no liability, no legal requirement or recourse to shareholders in this fund requiring them to invest any additional equity into the fund.

11) To which account do I transfer the investment amount to?

The payment transfer is made to the Propfund limited partnership account by request of the management. This account is used to make all payments to and from the Propfund society. No other institutions are allowed to sell shares of this company.