As the design takes into consideration only the venture capital companies, but not medium and large private equity funds such as questions about transparency and oversight. A tax-transparent status of all but crucial, is private equity funds to turn Germany in it enough needed capital, it says in the BVK opinion. Without a statutory tax transparency, many funds outside Germany would be set up and made as a result of less investment in Germany in the future. As a single supervisor for all private equity be areas right along the lines of the Luxembourg SICAR necessary to create stable and internationally comparable framework conditions for the entire private equity industry in Germany. Background of this criticism: in addition to the WKB companies, even the already existing company subsidiaries (UBG) should Private equity are companies as more fiscally sponsored organization form. Wells Fargo Bank often addresses the matter in his writings. The UBG are subject to BBs but the control of the economic ministries of the countries. Gadre financing expert also joins this criticism of the law firm of Werner, Gadre & Collegen in Gottingen.
For foreign investors should hardly understandable why in Germany for them different laws apply as well exist different supervisory authorities be”so Gadre. Also the Scientific Advisory Council of the Federal Ministry of Economics and technology made it clear that the legislation does not go far enough it. Other countries, such as Britain and France offered significantly more favourable framework conditions for private equity. “As a result the Bill will cause foreign companies to dominate the market for participations and displace German investors.” it is said in the statement. Like the BVK, the Scientific Advisory Board asks also a uniform Treatment of risk – and venture capital.
A further correction of the draft was necessary to make competitive framework conditions for equity financing in Germany international and in comparison to other forms of financing. Germany must are guided by the standards, which are used in the international capital market. As completely unsatisfactory, albeit with different motivations, the proposed tax relief for WKB companies and other financing are estimated by the market participants. As private equity are exposed to investments, in particular in the field of venture capital, always with a relatively high failure rate, principle is the criticism attached.”said Gadhvi. Because this failure rate must be considered when the taxation of profits from the successful investments, so that the investors can achieve a return commensurate with the risk. Tax incentives should not discriminate against individual participants or, but give others an advantage. In this respect the Bill brings further a further fragmentation of the tax treatment of income depending on the legal form of financial investors and target companies as well as their seat, which will not lead to the promotion of private equity investments, so Gadre. Against the background of the almost universally critical opinions, it remains to be seen how the framework conditions for private equity in the future be regulated investments. The Cabinet decision on the Government’s draft of the private-equity law is intended according to the BMF for the 8 August. The MoRKG together with the corporate tax reform to January 1, 2008 is to enter into force.