Any Investors can invest from a normal bank account in Estonia or their country. Your returns and sale proceeds, however, will be credited to your Estonian SPV account. The Estonian SPV will then pay your Net Rental Yield, with only corporate tax (income tax exemption) paid, into the investor’s bank account in their country on a monthly or quarterly basis.
At Turksa, the security of our platform and the privacy of all your data is an utmost priority. Our platform is built keeping the best-in-class security and privacy features in mind. All your data is hosted on secure cloud networks and all sensitive client data is encrypted and stored with 256-bit SHA encryption.
We believe in 100% transparency. All property documents, rental agreements, tenancy details, title report, due diligence report, etc will be sent to the Investors by Turksa.
No, Turksa does not guarantee any returns. While rental yields on most opportunities listed on the platform are known in advance, the risk that the yield and expected gains will not be realised, remains. Our presentations, webinars, and discussions only indicate projected returns. We advise potential investors to be wary of any scheme which provides guaranteed returns.
REITs are publicly traded instruments. Investors buy and sell units of the REIT to receive dividends and make capital gains. Whereas with Turksa, Investors are made shareholders of a Private Limited Company (SPV) which owns the property. Turksa manages the property on behalf of the SPV. Yields In a REIT, the yield varies based on your entry price. With Turksa, the yields are fixed. Volatility As a listed product, a REIT is subject to stock market volatility which can by out of sync with actual property value. With Turksa, Asset valuations are far more stable and only change according to ground reality. Payouts With REITs, the dividend payout cycle depends on the fund. It can be monthly or bi-annually. Also, a REIT is only required to distribute a minimum of 90% of the net distributable cash flows. With Turksa, Payouts are made monthly and there is a complete distribution of distributable cash flows. Non-revenue generating assets Up to 10% of the REIT’s investment can be in under-construction (Non-revenue generating) assets. With Turksa, All assets are revenue-generating. Exiting Assets A REIT cannot sell assets that it has owned for less than 3 years. With Turksa, assets can be sold at any time (post the initial lock-in period) with shareholder approval.
No matter what happens to Turksa, your investments are yours and absolutely safe. Here’s how- Your investment is in the form of equity shares or compulsorily convertible debentures in an Estonian SPV Company, incorporated for the sole purpose of acquiring and owning the asset. By virtue of holding equity shares in the SPV, you in turn own the asset. The SPV is bound to comply with statutory requirements such as holding general meetings, filing returns, etc., that are undertaken by third-party consultants. Due to this structure, the ultimate decision-making power lies with the investors alone. Thus even if Turksa is not functional, your ownership and control of the asset remain secure.
The documents you will require are; A copy of your ID Card and Passport Address Proof such as utility bill Bank statement
Non-Individual entities will be required to submit additional documents. Once verified, you can now invest in any open opportunity listed on the platform. You will receive all necessary property and SPV-related documents for your perusal and scrutiny. If you decide to move forward your investment, you will need to sign a binding Expression of Interest (EOI) and transfer the initial 5-15% advance to the deposit account of Turksa. Once 100% commitment is received from interested investors, the opportunity is considered to be fully funded. You will then be required to transfer the remaining amount into Shares Escrow Account. Your investment amount will then be routed through the escrow mechanism to the share subscription accounts and ultimately, to the current account of the SPV. You will be allocated equity shares and/or compulsorily convertible debentures (CCDs) in the Private Limited Company. The SPV will then proceed to purchase the asset.
In the unlikely event that a property on the Turksa platform does not complete its financing target, all funds paid by investors will be refunded to the investors’ verified bank accounts within a certain period, without any fee deduction and without interest. In such cases, investors should remember that they can consider other open property opportunities on our platform.
No, there is no need to visit the property in person. Title deed and notary transactions can be signed via e-Notary and Power of Attorney. All required documentation can be digitally signed with your Estonian e-Residency ID card, if you have one. Otherwise, you must be present in person at the Estonian Notary on two separate dates for the Land Registry and SPV transactions.
Once the Expression of Interest (EIO) deposit is paid, a termination fee will apply for any refund request. The fee will be determined according to the terms and conditions specified in the Expression of Interest (EIO).
Yes, a minimum lock-in period ranging from 12 months to 24 months will be determined for each investment opportunity. You are free to sell your holdings thereafter. Although it is anticipated that, in addition to the minimum lock-in period, there will be a significant period of time from the date of initial investment to reach a state of maturity when realization of the investment, if any, can be achieved. If you have an investment horizon of fewer than 5 years, it is recommended to not invest with Turksa or in real estate in general.
We charge the following; 1- An initial acquisition fee which varies depending on the opportunity. 2- Annual management fee is charged on the monthly payout that varies depending on the opportunity. 3- During exit, a performance fee of 20% on the gains above a hurdle rate of 10% IRR will be charged. 4- For opportunities closed, resale transactions will elicit a 2% facilitation fee on the actual resale. The facilitation fee is calculated as follows, Facilitation fee = (Actual resale value agreed upon with the buyer – Performance fees)*2%
Investors will not be charged a management fee during periods when there are no tenants in properties suitable for long-term rentals. However, a management fee will continue to be charged for the continuity of operational processes in properties suitable for short-term rentals.
Your investment is completed as soon as the opportunity is fully funded and private placement of your investment is done in the SPV. Turksa generally has a time frame of 60-90 days to ensure that the property receives complete funding.
The return on your investment from rental income is paid monthly or quarterly in the form of dividends. After the Estonian SPV deducts 22/78% corporate tax, your dividends are transferred to your bank account on the 15th business day of the following month. There are also no income tax or withholding taxes. The income tax rate for dividend yields in Estonia is 0%.
You can exit your investment once the initial 1 or 2 year lock-in period is complete. This can be done in three different ways;
Asset Sale: If a lucrative opportunity for selling the asset is available, Turksa as the asset manager shall take the necessary steps to evaluate the opportunity. After evaluation, Turksa will present it to the investors in the form of an online poll to decide if the asset is to be liquidated or held. If at least 75% of the shareholders vote to sell, we will begin the process of liquidation. All related reports and documents to assist the investors in making their decision shall be provided by Turksa. Once the asset is sold, the gains (post any taxes and fees) shall be distributed amongst shareholders and remitted to the respective registered bank accounts. If shareholders vote to hold, the investment will continue as is, until the next poll where the process will be repeated.
Private Sale: You can sell your fraction/holding to any investor you agree with. You will be required to execute the necessary transfer documents for the same. Turksa will provide you with the valuation of your holding should you require assistance in setting a price.
Resale Market: Using Turksa online dashboard, you can list your fraction/holding on Turksa resale market at Turksa recommended sales price. You will be required to execute the necessary transfer documents for the same. Once a new investor has acquired your fraction, you will be credited your gains (post any taxes and fees) on your registered bank account.
Estonian, EU and non-EU investors will pay only corporate tax at the %22/78 rate for both rental payouts and capital appreciation through the Estonian SPV.
Rents: Rents received from the property are distributed on dividends. After the Estonian SPV deducts only corporate tax %22/78, your dividends are transferred to your bank account. There are also no income tax or withholding taxes. The income tax rate for dividend yields is 0% in Estonia.
Capital Appreciation: Capital gains are also subject to Corporate tax %22/78 only. Capital gains are also exempt from income tax in Estonia.
Capital gain: Property sales price – Property purchase price
If the Rental and/or Capital gains are not distributed through Dividends, no Annual Corporate Tax payment is due until the year the dividends are distributed.
Furthermore, if the undistributed Rental and Capital Gains income is directed to a new property investment, it will be exempt from 22/78% corporate tax.
For each asset listed on the Turksa Platform, a Special Purpose Vehicle (SPV) is created in which funds are raised to purchase, own and manage the property. Your investment shall be towards subscription of the shares of the SPV that holds the property and represents your fractional investment. Turksa will provide asset management services to the SPV and undertake accounting, secretarial, reporting, leasing, maintenance, and other operational aspects under the asset management services contract with the SPV.
A Special Purpose Vehicle is an entity incorporated/created under the law, being a private limited company (OÜ) for a specific lawful purpose. Any investment opportunity listed on the Turksa platform will be owned by an SPV being a private limited company set up for this specific purpose.
Turksa undertakes the legal due diligence of the property before it is purchased by the SPV. All investment and property-related legal processes are handled by Turksa. However, you are welcome to seek tax and legal advice from your advisors to understand if the opportunity listed is suited for you. Should you engage any legal/tax advisor, we will be happy to answer any questions that they may have.
To begin with, you will be required to sign an Expression of Interest to confirm your commitment and remit 5-15% of your investment amount. Following this, a Capital Call (Drawdown) Notice will be sent to you once the opportunity has 100% commitment from all interested investors which you may remit the remaining funds towards your investment. This is followed by the execution of Shares Subscription Agreement (SSA) with the SPV. The SPV also executes the Asset Management Agreement with Turksa for which you will be executing a consent letter. At the time of resale/liquidation of your share in the SPV, you will be required to sign transfer documents.
Turksa has an experienced team that performs thorough technical and legal due diligence before listing any property on our platform. We engage reputable and top-tier law firms to conduct due diligence on the property title.
