3. Applying the indicators under CIR Rule 2.1.10, the DFSA considers the following type of closed-ended property companies to be commercial companies, rather than investment companies:
a. a property developer or a property construction company which is in the business of developing and constructing (i.e. creating) the property;
b. a real estate company which operates a business of selling or leasing real estate for its customers;
c. a property management or maintenance company – which generates profits through fees charged for those services; and
d. a property valuation service provider – which is a property related service provider.
4. In contrast, there are certain types of closed-ended companies which directly or indirectly invest in Real Property and therefore are clearly investment companies. For example a company which:
a. raises capital from investors to invest in real estate, on the basis that the real estate will be selected or bought and sold on the basis of specified criteria, and profits generated are distributed as specified; or
b. invests in Securities (such as shares, debentures or units) of other real estate companies or property developers to generate profits through returns on such investments.