Backing businesses

EuVECA

The review of the European Venture Capital Fund (EuVECA) Regulation is an opportunity to make the regime even more attractive and accessible to a larger number of small and medium-sized funds, for instance by turning it into a voluntary EU venture and growth capital label. It will be important to ensure that the framework remains proportionate and successfully complements the AIFMD marketing passport.

Smaller fund managers

Smaller fund managers are rightly exempted from the full requirements of the AIFMD, given the disproportionate burden it would place on them. While this is welcome, it also means that many small EU managers have fewer options to raise funds across borders. Further enhancing cross-border marketability by addressing remaining barriers within the EU is key, and could allow smaller fund managers to unleash their full potential in support of European businesses.

A tax policy that promotes equity

A well-calibrated tax policy plays an important role in providing a favourable environment for businesses to flourish. One way to encourage further investment is by supporting companies to fund their activities through equity. This could be achieved through an allowance for equity issuance, making equity funding more appealing for Europe’s enterprises. Furthermore, such a measure would also help to address concerns over levels of debt on company balance sheets.

Smart public investments

Through InvestEU and VentureEU, the EU should continue to provide smart support to venture capital and growth funds. Attention should be paid to the regulatory treatment of start-ups and scale-ups backed by venture capital in order to ensure that they continue to benefit from the same advantages as other SMEs.