OPCIs: French Real Estate Investment Funds Explained

What an OPCI Is

An organisme de placement collectif immobilier (OPCI) is a collective real estate investment fund — a FIA under the AIFM Directive — whose purpose is to invest in rental property (directly or indirectly, including off-plan), carry out all operations necessary for the use or disposal of its real estate assets, undertake works of any nature, and, accessorially, manage financial instruments and deposits (C. mon. fin. Art. L 214-34). Real estate assets may not be acquired exclusively for resale — properties must be intended for rental. An exception permits OPCIs to sell residential properties acquired in nue-propriété under a split-ownership arrangement with a usufructuary at any time.

OPCIs coexist with SCPIs as a more flexible route to pooled real estate investment. The key structural difference is that an OPCI is only required to invest 60% of its assets in real estate, giving it a more liquid and manageable profile in volatile property markets.

Two Legal Forms: Sppicav and FPI

Every OPCI takes one of two legal forms, which have identical operating mechanics but fundamentally different legal natures and tax treatments (C. mon. fin. Art. L 214-33).

A Sppicav (société de placement à prépondérance immobilière à capital variable) is a variable-capital SA or SAS. Investors who buy Sppicav shares become shareholders with the right to participate in general meetings and express views on management.

A FPI (fonds de placement immobilier) is a co-ownership without legal personality. Investors are unit-holders with no governance rights, no right of control, and no right to intervene in management decisions. Neither Sppicavs nor FPIs are listed on any exchange. All OPCI formations and subsequent structural changes require AMF approval.

Governance: Management Company, Depositary, and Supervisory Council

Every OPCI is formed and managed by an AMF-approved société de gestion de portefeuille. The OPCI must also appoint an independent depositary — a credit institution or investment firm — whose mission is to monitor the OPCI's asset inventory and verify the legality of all management decisions. For FPIs specifically, the fund rules must establish a conseil de surveillance composed of unit-holder representatives, with between two and nine members and an elected president (C. mon. fin. Art. L 214-73). The council has a monitoring function only and may not itself intervene in day-to-day management.

Portfolio Composition: The 60/40 Rule and the 5% Liquidity Floor

The 60% real estate minimum

At least 60% of the OPCI's assets must be invested in qualifying real estate (C. mon. fin. Art. L 214-36 and L 214-37). For FPIs, qualifying assets include: directly-held let or available-to-let properties; furniture and equipment affixed to those properties; real property rights; leasehold interests under finance leases; units in non-listed civil property companies (SCIs and SCPIs); and units in other French FPIs or equivalent foreign co-ownership vehicles. For Sppicavs, the same categories qualify and additionally: shares in non-listed property companies; shares in listed real estate companies (SIICs and equivalents); and units or shares in other company-form OPCIs — all subject to the condition that directly-held property and non-listed real estate companies represent at least 51% of the OPCI's assets. At least 20% of the OPCI's real estate assets must be in built properties that are either let or available to let (C. mon. fin. Art. R 214-86).

The 40% financial and liquidity sleeve

The remaining up to 40% of assets may be invested in listed equities, AMF-approved OPC units, financial futures, and deposits. Within this sleeve, at least 5% of total assets must at all times be held in immediately available liquidity: term deposits of no more than 12 months redeemable at any time, Treasury bills, money market funds, government-guaranteed bonds, and sight deposits. This mandatory floor exists to ensure the OPCI can honour redemption requests.

NAV, Subscriptions, Redemptions, and the Six-Month Settlement Window

Net asset value

The OPCI's net asset value equals total portfolio value (market value net of liabilities) divided by the total number of units or shares in issue. Real estate assets are valued at their market value by at least two independent property valuers, at minimum four times a year at three-month intervals (Régl. gén. AMF Art. 422-165). The NAV must be calculated and published at least every six months and at most twice per month. Where the interval between two published NAVs exceeds three months, the OPCI must publish an estimated interim value at least every three months — this estimate cannot serve as the basis for subscription or redemption orders.

Subscription and redemption pricing

Units are purchased at the NAV established after the order centralisation deadline, plus a subscription commission with two components: a share retained by the OPCI itself (covering acquisition taxes on real estate investments) and optionally a non-retained share. Redemptions are processed at the post-deadline NAV less any applicable redemption commission. Management costs include distinct fees for real estate management and for financial asset management.

The six-month settlement window

Because settling a redemption may require the OPCI to sell real assets, the regulation allows a maximum of six months between the order centralisation date and actual delivery or cash settlement to the investor (Régl. gén. AMF Art. 422-130). The prospectus must specify the exact order deadline and maximum settlement delay, and must include worked examples.

Suspension of subscriptions and redemptions

Subscriptions may be temporarily suspended when conditions in the prospectus are met (maximum units or asset level reached). Redemptions may be temporarily suspended where a unit-holder holding more than 20% of the OPCI's capital requests redemption of more than 2% of the total number of units in a single request (C. mon. fin. Art. L 214-45; Régl. gén. AMF Art. 422-134).

Mandatory Distribution Rules

OPCIs are required by law to distribute a substantial portion of their income and realised gains (C. mon. fin. Art. L 214-69 and L 214-81). Sppicavs must distribute at minimum: 85% of rental income received directly or indirectly; 50% of capital gains on real estate disposals during the current or previous financial year; and the totality of dividends from tax-exempt subsidiaries on their real estate activities. FPIs must distribute at least 85% of their total distributable income — whether from rental properties, financial investments, or realised capital gains. Both may retain surplus income in reserve to smooth performance. Distributions must be paid within five months of the close of the financial year. For FPI capital gains on real estate disposals, distribution must occur within six months of the disposal.

Tax Treatment: Sppicav

Distributions by a Sppicav to individual shareholders are taxed under the dividend regime. The PFU applies at 30% (12.8% income tax + 17.2% social charges) by default. The global progressive scale may be elected instead, in which case the 40% abatement on dividends is in principle available — except where distributions are drawn from profits that were exempt from corporate income tax at the Sppicav level. Capital gains on the sale or redemption of Sppicav shares fall under the ordinary securities capital gains regime (PFU 30%, no duration abatement).

Tax Treatment: FPI

The FPI's fiscal transparency operates through CGI Art. 239 nonies: unit-holders are taxed as if they had personally received the FPI's income in proportion to their holding, but only when that income is actually distributed. Each income category is taxed under its own regime.

Rental income from bare-let properties: revenus fonciers

Income from FPI properties let unfurnished is taxed in unit-holders' hands under the progressive income tax scale in the revenus fonciers category, plus 17.2% social charges (with 6.8% CSG deductible from taxable income in the year of payment). The FPI's management and operational costs are deductible at fund level in determining net rental income — but performance fees are not. Unit-holder-level costs (personal management fees, subscription costs, transaction fees) are not deductible.

Micro-foncier is available to unit-holders whose total annual gross rental income does not exceed €15,000, provided they also directly hold at least one unfurnished rental property and have not elected a special depreciation regime. Under micro-foncier, a flat 30% abatement applies and no individual charges — including loan interest — are deductible. The real income regime applies automatically to unit-holders without other rental income, or to those whose total gross rental income exceeds €15,000. Loan interest on borrowing used to acquire FPI units is deductible against rental income but cannot create a deficit offsettable against general income — any excess carries forward against rental income over the following ten years. Special tax regimes (monuments historiques, overseas investment, forestry, rural tourism) cannot be applied to properties held within the FPI.

Income from furnished-let properties: BIC

Income from FPI properties let furnished is taxed in the BIC category. The taxable amount is the distributed income reduced by the positive difference between the theoretical accounting amortisation of the properties and the flat-rate 1.5% deduction applied by the fund. The micro-BIC regime is not available.

Investment income from financial assets: RCM

Income from the FPI's financial assets (dividends, interest, and similar) constitutes revenus de capitaux mobiliers for unit-holders, taxable at distribution under the standard investment income rules: PFU 30% by default, or progressive scale on global election.

Capital gains on property disposals: real estate gains regime

Capital gains realised by the FPI on the disposal of its real estate assets are taxed in unit-holders' hands at the time of distribution, proportional to each unit-holder's quota-share, under the individual real estate capital gains regime (CGI Art. 150 UC). Normal rules apply — including progressive duration abatements — with two adjustments: the acquisition price may not benefit from the standard 7.5% uplift for acquisition costs or the flat 15% forfeit for improvement works. In practice, the FPI's depositary pays the tax directly on behalf of unit-holders, who receive their distribution net of all applicable taxation. Capital gains on the FPI's disposals of listed securities are taxed in unit-holders' hands in the year of distribution under the ordinary securities capital gains regime (CGI Art. 150-0 F).

Capital gains on FPI unit disposals

When a unit-holder sells or redeems their FPI units, the resulting gain is taxed under the real estate capital gains regime — not the securities capital gains regime. The duration abatements for real estate apply, potentially leading to full income tax exemption after 22 years and full social charges exemption after 30 years.

Registration Duty

Initial subscriptions to FPI units are exempt from registration duty (CGI Art. 832 A). Transfers of OPCI units or shares are also generally exempt, but with two exceptions where 5% registration duty applies (CGI Art. 730 quinquies):

• Where the buyer already holds, or will hold following the acquisition, more than 10% of the OPCI's units or shares — directly, through their family group (spouse, ascendants, descendants, siblings), or indirectly through companies in which they or their family group hold more than 50% of the financial and voting rights
• Where the buyer is a legal entity or fund that already holds, or will hold following the acquisition, more than 20% of the OPCI's units or shares

The same 5% duty applies to FPI redemptions and asset distributions to unit-holders, and to Sppicav buybacks of their own shares, where the unit-holder falls into one of the two situations above (CGI Art. 749 and Art. 825).

This article is provided for general information and educational purposes only. It does not constitute tax or investment advice. The rules described here apply to OPCIs open to non-professional investors; professional OPCIs (OPPCIs) follow different rules not covered here. Investors with BIC exposure from FPI furnished-let income should seek specific tax advice.