A change in the law against tax fraud, approved last year, imposed limitations on the use of sicavs as a way to reduce the payment of taxes by large estates. Now, the CNMV has published a provisional balance of the impact that this change in regulations has had for the more than 2,000 companies of this type that were active in Spain. 77% of the total, some 1,756, have chosen to be liquidated or transformed into a public limited company or limited company, according to data provided by the supervisor this Monday. Only two out of ten entities, those with the highest assets, survive the new limits imposed.
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last year's law supposed a reinforced control over the figure of the 'mariachi'. This term referred to those straw men and women who were used as fictitious investors to reach the minimum of 100 shareholders that the law required to have in these vehicles. Many high-net-worth families filled their companies with these participants who, in reality, had no relevance in the capital they managed, which made it possible to avoid the limitations and use a sicav to reduce tax payments. With the reinforcement of the limits to this figure of the mariachi, by forcing each shareholder to have a minimum investment of 2,500 euros, it has been shown that the vast majority of the sicav that operated in Spain did not comply with this new requirement.
There are only 467 entities that plan to continue as a sicav. They are the largest, as shown by the fact that despite being 20% of the total, they controlled almost 44% of the assets managed by these companies in Spain. Specifically, of the 467 entities that plan to continue as a sicav, says the CNMV, 384 continue to pay 1% tax with 11,925 million euros and 83 remain as a SICAV but pay 25%, with 740 million euros of assets. There would also be 19 that would be transformed into free investment companies (SIL).
The term for these conversions and liquidations does not conclude until June of the following year. However, the CNMV asked the sicav that are registered in Spain to inform of their intention to continue as a sicav or to stop being one. This period expired at the end of January, although the supervisor has continued to receive communications from these companies through these vehicles. Of the 1,756 sicavs that will no longer be sicavs, 1,582 will be liquidated. They represent 12,864 million euros. "It is foreseeable that a significant part of the assets of the sicav that have adopted liquidation agreements will revert to contributions to collective investment institutions -investment funds- in accordance with what is contemplated in the transitional regime," says the CNMV.
The law allowed those who decided to liquidate their sicav, for not complying with the requirements of the new law, a transitory regime with tax incentives so that this capital was reinvested in other vehicles, such as investment funds. In addition, there are 63 sicav left, totaling 598 million euros of assets, which have not yet informed the CNMV of their decision after the application of the new anti-fraud law.