Invest in European Venture Capital

INVESTINVENTURE.COM

The following information is relative to the tax treatment of Venture Capital entities in various countries as is in 2010. The information is the result of interpretation of the wording of various documents (officials or not) found on Internet. Therefore, the information provided below should NOT be considered 100% accurate. You should be officially informed by the tax authorities of the countries listed below. Investinventure.com shall not be liable for any kind of loss that may occur from decisions made according to the information provided below, or based on any other content of this site.

If you cant properly read some words on this page please go to View/Encoding and try to find and select the Unicode (UTF-8) on Internet Explorer, or View/Character Encoding/More Encodings/Unicode/Unicode (UTF-8) on Firefox.

Country Venture capital Vehicles Investment
Target Tax Base Person
to be taxed Tax Rate Other Useful Link

Denmark no specific vehicles for Venture Capital investments Limited Liability Companies A/S or ApS, or Unlimited Liability Partnerships K/S, I/S or P/S Corporate income tax, capital gains tax, value added tax/payroll tax Individuals or companies
(Limited Liability
companies) Incoming Dividend:
exemption for received dividends
if certain conditions are met.
Outgoing Dividend:
withholding tax at a rate of 28% to non resident companies.
Tax excemption if special rules are met.

It is possible to set-up Venture
Capital funds either as
a transparent entity or a
limited liability company.

Interest expenses are as a main rule deductible for tax purposes in Denmark.

Cyprus
-International Fixed Capital Company (IFCC)
- International Variable Capital Company (IVCC)
- International Unit Trust Scheme (IUTS)
- International Investment Limited Partnership(IILP)

cross-border Venture Capital investments
Income Tax, Defence Tax, Capital Gains Tax, Value
Added Tax (VAT), Transactional taxes (registration fees & stamp duty) Individuals or companies
Dividends
and capital
gains from
sale of securities
are exempt for (IFCC / IVCC) under special conditions.

No withholding tax
on income distributed
by the VC vehicles. Instead, when income is distributed
to investor /shareholder
individual who is a tax
resident of Cyprus a withholding
tax rate of 15% is imposed.

The EU Savings Directive is applicable on interest payments.

There are no thin capitalization rules.

Portugal
- Sociedades de Capital de Risco(Venture Capital Companies incorporated as joint public companies)

- Investidores em Capital de Risco(Business Angels incorporated as a sole shareholder limited liability company)

-Fundos de Capital de Risco( Venture Capital Funds VCF standalone assets, without a corporate entity) managed by a management company

Companies with high growth potential. capital gains,
dividends. companies, individuals.
For Fundos de Capital de Risco(VCF):
withholding tax is generally not levied on distributions from the VCF to non-
resident unit-holders under special rules.
Otherwise 10% tax rate as in case of residents.

Capital gains:
no withholding rax rate for non residents unit holders.Special rules apply.
10% for individuals residents, and regular tax rate for companies
Fundos de Capital de Risco is not qualified as 'tax transparent' entity for Corporate Income Tax.

More countries 1. 2. 3. 4.

Source:European Commission Report of Expert Group for Venture Capital