Private Equity and Venture Capital: Investment Fund Structures in Europe

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Date
2012-12-31
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Mark
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IBIMA
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Abstract
Suitable legal fund structures for private equity and venture capital (PE/VC) investments and their tax treatment have been considered as a key factor for stimulating the business environment. The Czech Venture Capital Association stresses that legal barriers are an important reason behind the limited scope of resources available to domestic PE/VC funds. Legal barriers prevent the establishment of a standard PE/VC fund in the territory of the Czech Republic, which fact in turn has a negative impact on the level of development of the domestic PE/VC market. In order to encourage the development of the market, this paper addresses filling the existing research gap concerning the following issues of the Czech PE/VC market: How the current Czech legislation regulates the legal fund structures for PE/VC investments? What is the tax treatment of PE/VC funds and individual investors in the Czech Republic? What are the legal and tax regulations on the main European markets for PE/VC? What are the key requirements for improvements of the current situation on the Czech PE/VC market? The nature of this study is explorative and it relies on primary and secondary data. Results of the study stress that the non-existence of the Limited Partnership legal form in particular is a weak spot of the current Czech legislation. The only Czech legal structure for PE/VC investments – the Qualified Investor Fund – does not sufficiently accommodate the requirements of market participants. Inadequate manner of market regulations can also be pointed out in addition to inflexible corporate law, tax obstructions and non-transparency of the current structures. In conclusion this study formulates proposals how to change the existing corporate law and the regulation of the PE/VC financial market segment in the Czech Republic. The proposals are based on models provided by selected European countries and create suitable conditions for a successful development of the Czech PE/VC market.
S cílem podpořit rozvoj trhu rizikového a rozvojového kapitálu v ČR studie zkoumá následující otázky: Jaká je současná úprava právních a organizačních forem investování rizikového a rozvojového kapitálu v ČR? Jakému daňovému režimu podléhají institucionální a soukromí investoři? Jaká je úprava právních a organizačních forem pro investování rizikového a rozvojového kapitálu na hlavních evropských trzích? Jaké jsou klíčové požadavky v oblasti regulace tuzemského trhu? Studie se opírá o primární a sekundární data.
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Journal of Eastern Europe Research in Business & Economics. 2012, vol. 2012, issue 2, p. 25-38.
http://ibimapublishing.com/articles/JEERBE/2012/471840/
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Peer-reviewed
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en
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Creative Commons Attribution 3.0 Unported
http://creativecommons.org/licenses/by/3.0/
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