Publication detail

Tax Treatment of Legal Fund Structures for Venture Capital Investments in the Czech Republic: a Comparative Study

ZINECKER, M. SVIRÁK, P. GREBÍKOVÁ, M.

Original Title

Tax Treatment of Legal Fund Structures for Venture Capital Investments in the Czech Republic: a Comparative Study

Type

conference paper

Language

English

Original Abstract

The sector of young growth-oriented ventures struggles with a lack of external sources of financing. In advanced market economies, venture capital represents a significant source of equity finance at this stage of the life cycle of enterprises. The Czech Republic suffers from the underdevelopment of this financial market sector, with nonexistent provision for suitable legal and organizations forms of venture capital funds in domestic legislation and the method of taxation of investment yields at both fund and investor levels being viewed as some of the causes of this undesirable state of affairs. In order to encourage the development of the market, this paper addresses filling the existing research gap concerning the following issues of the Czech venture capital market: How the current Czech legislation regulates the legal fund structures for VC investments? What is the tax treatment of VC funds and individual investors in the Czech Republic? What are the legal and tax regulations on the main European markets for venture capital? What are the key requirements for improvements of the current situation on the Czech venture capital market? The nature of this study is explorative and it relies on primary and secondary data. Results of the study stress that as compared to economies boasting developed financial markets, the non-existence of the Limited Partnership legal form in particular is a weak spot of the current Czech legislation. Inadequate manner of market regulations can also be pointed out in addition to inflexible corporate law, tax obstructions and non-transparency of the current structures.

Keywords

Venture Capital, Tax and Legal Environment, Fund Structures, Tax Treatment

Authors

ZINECKER, M.; SVIRÁK, P.; GREBÍKOVÁ, M.

RIV year

2012

Released

12. 11. 2012

Publisher

IBIMA Publishing

Location

Barcelona

ISBN

978-0-9821489-8-3

Book

Innovation Vision 2020

Edition

2012

Edition number

1

Pages from

880

Pages to

890

Pages count

11

BibTex

@inproceedings{BUT95310,
  author="Marek {Zinecker} and Pavel {Svirák} and Monika {Hodinková}",
  title="Tax Treatment of Legal Fund Structures for Venture Capital Investments in the Czech Republic: a Comparative Study",
  booktitle="Innovation Vision 2020",
  year="2012",
  series="2012",
  number="1",
  pages="880--890",
  publisher="IBIMA Publishing",
  address="Barcelona",
  isbn="978-0-9821489-8-3"
}