Financing a Real Estate Project in Italy
A Unique Structure
As part of an Italian project to be funded on Raizers, and in order to be able to use crowdfunding, a specific structure must be put in place. This is because, pending the granting of its European license (PSFP), Raizers cannot raise funds directly from an Italian company.
That is why a company wholly owned by Raizers SAS must be established. This company acts as the issuer and raises the funds. These funds will then be transferred to the Italian company carrying out the project through a loan agreement. This agreement, entered into between the Italian company and the company established by Raizers, mirrors all the terms and conditions of the bond agreement.
The Unique Characteristics of Italian Real Estate Transactions
A Streamlined Administrative Process
In Italy, there are two types of administrative permits: the building permit and the SCIA.
The building permit applies to real estate developments, and the process for obtaining it is similar to that for obtaining a building permit in France.
The SCIA (Certified Declaration of Commencement of Business, in Italian Segnalazione Certificata di Inizio Attività), which is a planning permit that does not require prior approval, covers all renovations as long as the building’s structural integrity remains unchanged.
A Significant Need for Equity Capital Among Real Estate Operators
In Italy, the VEFA system does not exist. Therefore, there are no calls for funds as construction progresses. This is why real estate developers need significant equity to finance construction.