In recent years, Venture Capital Companies (VCCs) have proliferated, which not only serve to channel investments but also offer a combination of very interesting investment returns and beneficial tax treatment.
VCCs are closed-end collective investment entities that obtain capital from a series of investors and whose main objective, under certain conditions, is to take temporary stakes in the capital of companies that are neither real estate nor financial in nature, to generate gains or returns for investors.
Overall, the appeal of VCCs lies in their pursuit of new investment opportunities that offer more attractive returns than traditional options (listed equity and fixed income products) and in the tax advantages associated with this type of investment, as they enjoy a special favorable tax regime in which, under certain conditions:
- there is a 95% exemption on dividends and capital gains;
- there is a 99% exemption on income from the transfer of shares; and
- there is the possibility of benefiting from the special family business regime.
Beyond tax advantages, setting up a VCC or investing in them offers other favorable aspects such as (i) the opportunity to access exclusive investment ideas in non-traditional and innovative sectors to which individual investors do not usually have access; and (ii) allowing portfolio diversification, as investing in different companies in diverse sectors significantly reduces risk, thus improving the “return-risk” ratio.
If we need to highlight a disadvantage, it is their strict adherence to administrative obligations, among others, before the National Securities Market Commission, which makes accompaniment and advice for managing this type of entity recommendable.
At addwill, we can accompany you in this type of project through specialized, multidisciplinary, and close advice. Contact us at 934 875 200, via email at comunicacio@addwill.eu, or by clicking here.