Set up Alternative Investment Funds (AIFs)Updated on Tuesday 25th October 2016
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Most of the alternative investment funds (AIFs) in Spain are incorporated to manage various types of assets, such as private equity, hedge funds or real estate deals. The AIFs are addressed to high net worth individuals, as most of the vehicle’s funds come from the assets of such persons. The AIFs must invest their funds in accordance with the investment policy established by the businessmen, which is defined in a very clear manner. Foreign investors who want to start a business in Spain can receive in-depth information on this subject from our team of Spanish lawyers, who can provide legal assistance on the registration of an AIF following the applicable law.
Legal structures of a Spanish AIF
When registering an investment fund in Spain, the investors will have few available options for the legal structure of the vehicle. Thus, the Spanish legislation stipulates the following entities:
• investment fund;
• investment company.
The AIFs in Spain can be set up as open-ended or closed-ended structures, which refer to the rights given to the investors to issue shares. Investors should know that the open-ended funds provide more advantages in this sense, as the entrepreneurs are not limited to a certain share amount, but our attorneys in Spain may provide more information on this sense. An open-ended fund is registered in order to obtain the highest return on investment.
Investors who participate in an AIF as shareholders must know that this quality provides limited liability, which is calculated in accordance with their contribution to the fund.
Regulatory framework for AIFs in Spain
As mentioned above, the main distinction between AIFs is given by the issuance of shares. Thus, the open-ended funds in Spain are regulated by the Law 35/2003 and the Royal Decree 83/2015, while the closed-ended funds are regulated by the Law 22/2014.
The taxation system in the case of AIFs in Spain also differs based on the two main types of funds which can be incorporated here. Thus, open-ended funds may be taxed at a rate of 1% for the fund’s income, while in the case of a closed-ended fund, the tax regime imposes a corporate tax rate of 25%.
We invite foreign businessmen to contact our law firm in Spain for more details referring to the registration of an alternative investment fund.