Real Estate Tokenization
At RealWorldTokens.org, we understand that not every investor may be comfortable with tokenization, and that's perfectly okay. Rest assured, the traditional real estate contract remains valid, providing you with the flexibility to choose whether to participate in tokenization or not.
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Tokenization truly shines when you're ready to sell your full fractionalized share of the property or even just a portion (min holding 10%) of it. It offers unparalleled convenience and liquidity, empowering you to unlock the value of your investment with ease.
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Whether you prefer the traditional route or are intrigued by the benefits of tokenization, RealWorldTokens.org is here to cater to your individual needs and preferences. Explore the possibilities and make informed decisions with us.
Navigating the regulatory landscape of Real Estate Tokenization
Security tokens, representing shares or securities in the Special Purpose Vehicle (SPV) owning the property, are completely legal and governed by existing financial instrument laws, ensuring substantial investor protection.
These tokens offer a simpler way to transfer securities without changes in the land register, making property-backed tokens easier and more flexible to handle than traditional real estate. Our experts will assist in structuring a holding company in a jurisdiction with favorable legislation for securities to make tokenized real estate investments even more appealing.
Full Smart Contract Workflow:
01.
Due Diligence:
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- Conduct thorough due diligence on the property to assess its market value, legal status, ownership structure, and any potential encumbrances or liabilities.
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- Verify the property's title, zoning regulations, environmental factors, and any existing leases or agreements.
02.
Legal and Regulatory Compliance:
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- Consult legal experts to navigate the regulatory landscape governing real estate tokenization in your country.
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- Ensure compliance with securities laws, anti-money laundering (AML) regulations, and other relevant legal requirements.
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- Draft and execute legal agreements, including tokenization contracts, investment agreements, and regulatory filings.
03.
Asset Structuring:
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- Determine the ownership structure for the tokenized asset, including the allocation of fractional ownership rights to token holders.
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- Establish a special purpose vehicle (SPV) or other legal entity to hold the title to the property and issue the tokens.
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04.
Smart Contract Development:
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- Develop smart contracts on the Ethereum blockchain (ERC20) to represent and manage the ownership rights of token holders.
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- Define the parameters of the smart contracts, including token issuance, distribution, transferability, dividends, and governance mechanisms.
05.
Tokenization Platform Setup:
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- Choose a tokenization platform or service provider to facilitate the issuance and management of tokens.
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- Customize the tokenization platform to meet the specific requirements of the real estate asset and comply with regulatory standards.
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- Integrate security features, identity verification processes, and investor accreditation requirements into the platform.
06.
Token Offering:
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- Launch a token offering (Security Token Offering or STO) and issue to investors.
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- Ensure transparency and disclosure of relevant information about the property, investment terms, and risks associated with the tokenized asset.
07.
Investor Onboarding and Compliance:
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- Onboard investors onto the tokenization platform, verifying their identities and compliance with investor accreditation requirements.
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- Provide investors with legal documents, disclosures, and educational resources to help them make informed investment decisions.
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- Collect and manage investor funds securely, ensuring compliance with regulatory standards for investor protection.
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08.
Token Distribution and Secondary Market:
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- Distribute tokens to investors upon successful completion of the token offering.
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- If required, facilitate trading of tokens on secondary markets or compliant exchanges, providing liquidity and opportunities for investors to buy and sell their tokenized shares of the real estate asset.
09.
Asset Management and Reporting:
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- Manage the real estate asset on behalf of owners / token holders, including property maintenance, rental collection, and financial reporting.
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- Provide regular updates and financial statements to investors, ensuring transparency and accountability in asset management.
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10.
Compliance and Governance:
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- Maintain ongoing compliance with regulatory requirements, including reporting obligations, investor disclosures, and securities laws.
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- Establish governance mechanisms for token holders to participate in decision-making processes, such as voting on property management decisions or asset sales.
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Why tokenize?
Immutability: The tokens and smart contract are stored on a blockchain, making them tamper-proof and immutable.
Efficiency: Token transfers and other processes can be automated and executed quickly, without the need for physical document transfer.
Security: The original contract and other sensitive documents are stored securely off-chain, reducing the risk of unauthorized access or tampering.