Popular investment vehicles in Germany

Updated on January 2026

• Sondervermögen (fund in contractual form)
• Investment Kommanditgesellschaft (InvKG) (limited partnership)

• Contractual (so-called chapter 3 fund under German Investment Tax Act)
• Contractual (so-called chapter 2 fund under German Investment Tax Act)

• Limited partnership 

Contractual (so-called chapter 3 fund under German Investment Tax Act):

• (Semi) transparent

Contractual (so-called chapter 2 fund under German Investment Tax Act):

• Opaque
• Not tax transparent but solely subject to tax with domestic real estate income

• Transparent

Contractual (so-called chapter 3 fund under German Investment Tax Act):

• Sale of fund units does arguably not trigger RETT even if German property is held by the fund

Contractual (so-called chapter 2 fund under German Investment Tax Act):

• Sale of fund units does arguably not trigger RETT even if German property is held by the fund

• 3.5 – 6.5 % RETT depending on the location of real estate in Germany
• RETT-Blocker structures possible, but require greater share of blocking entity

• No

• No

Contractual (so-called chapter 3 fund under German Investment Tax Act):

• Open-ended

Contractual (so-called chapter 2 fund under German Investment Tax Act):

• Closed-ended

• Closed-ended /open-ended

Contractual (so-called chapter 3 fund under German Investment Tax Act):

• AIFM supervised by BaFiN

Contractual (so-called chapter 2 fund under German Investment Tax Act):

• AIFM supervised by BaFiN

• AIFM supervised by BaFiN

Contractual (so-called chapter 3 fund under German Investment Tax Act):

• (Semi) professional investors

Contractual (so-called chapter 2 fund under German Investment Tax Act):

• (Semi) professional investors

• (Semi) professional investors

Contractual (so-called chapter 3 fund under German Investment Tax Act):

• Tax transparency (depending on structure)
• Single line balance sheet item (depending on structure) 

Contractual (so-called chapter 2 fund under German Investment Tax Act):

• Single line balance sheet item (depending on structure)
• Generally no limitation on leverage
• Generally no list of eligible assets

• Tax transparency
• Trade tax may be avoided subject to appropriate structuring 
• No limitation on leverage
• No risk diversification requirements (closed-ended)
• Highly flexible

Contractual (so-called chapter 3 fund under German Investment Tax Act):

• Conclusive list of eligible assets
• Risk diversification requirements
• Limitation on leverage

Contractual (so-called chapter 2 fund under German Investment Tax Act):

• Opaque tax treatment

• No access to tax treaties and EU PSD at fund level
• Sale of LP interest may trigger RETT

Contractual (so-called chapter 3 fund under German Investment Tax Act):

• Investments by German tax-exempt institutional investors (e.g. pension schemes)
• Commonly implemented using a German service AIFM

Contractual (so-called chapter 2 fund under German Investment Tax Act):

• Investments by German tax-exempt institutional investors (e.g. pension schemes)
• Higher leverage possible
• Single asset club deals
• Commonly implemented using a German service AIFM

• Higher leverage possible
• Single asset club deals (closed- ended)
• Commonly implemented using a German service AIFM

Disclaimer: “Information in this guide for any particular country or topic may have been subject to change since the date to which it was prepared”