Legal Research Of Trust Planning Model In Real Estate Investment Trust

REITs (Real Estate Investment Trust), originated in the United States in the1860s, is a kind of company, Trust, or business associations, which gathers the specificmajority investors’ money to issue beneficial warrants. It is conducted by professionalinvestment institution which would manage and operate the real estate investment,then distribute the comprehensive income to investors according to certain proportion.In2008, the State Council put forward to develop REITs in China whichlaunched a wave of REITs in the academic discussion. The trust panning model ofREITs is a kind of China’s relatively formable closed trading patterns currently. Enterprise could entrust the trust company to issue the beneficial right of the trust inthe inter-bank bond market in direct financing and agree to redeem the trust plan in aperiod of time. The trust property, whose investment orientation and proportion of ithave agreed requirements and restrictions on both at home and abroad, is held by thereal estate enterprise, which has the stable cash income including the rental incomefrom property, assets and revenue on a regular basis. Real estate enterprise shouldhold all secondary trust, hire professional real estate appraisal experts and take theresponsibility of strict information disclosure to safeguard the investors’ interests.REITs trust planning model would broaden the fields for China’s real estatefinancing, promote the innovation of financial product as well as enrich the varietiesof financial market investment, which could be an effective way to solve the difficulties of financing in the real estate market. This article would analyze in fourparts regarding to legal problems about the trust planning model, including:The first part mainly expounded the basic connotation and species of REITs. Itcan be classified as company REITs and contractual REITs by organizations; or asequity REITs, mortgage REITs and hybrid REITs by different investment purpose; oras open trading REITs and closed trading REITs. Two molded REITs are establishedrespectively in our country, the trust planning model of REITs leaded by People’sBank of China and equity REITs leaded by China Securities Regulatory Commission.The second part made a comparative study of the regulations of world’s majorcapital markets of REITs. American REITs is closely related to the reform of the taxlaw according to all previous development and innovation, which provided asuccessful experience and comparative analysis for the European countries, Japan,Singapore and Hong Kong REITs in the development of the cause, organization form,asset structure and investment restrictions as well as risk control.The third part combed the problem of trust planning model REITs faced in ourcountry which compared with the international successful experiences and theexisting laws and regulations in our country, including the unclear investment object,tax system defect, legal environment improvement and a lack of liquidity, etc.The fourth part indicated three issues needed to improve, including holding amature property with stable cash flow to prosper housing rental market, learning fromadvanced tax deduction and exemption system and establishing effective risk controlsystem.