The industry analyses the changes to the tax system applicable to SICAVs and calculates their impact on the sector

28 March 2022

The year 2022 has marked a turning point for a product of major significance in the asset management industry: the SICAV. On 1 January, the new requirements that allow these companies to continue to pay 1% corporate income tax came into force: a minimum of 100 shareholders, each with an investment of at least €2,500. If these requirements are not met, the company will be taxed at 25%.

The decision has prompted an avalanche of more than 1,800 companies that have convened their boards of directors to propose the dissolution of the companies. In this regard, the legislation establishes a transitional period. But it has also prompted the decision of many others to transform themselves into other types of companies, such as Limited Liability Companies (Sociedad de Responsabilidad Limitada - SRL) or Public Limited Companies (Sociedad Anónima - SA). And finally, a few have announced that they will remain open-ended investment companies, either because they expect to comply with the new requirements or because they accept to be taxed at 25%.

In any case, this large-scale disappearance penalises the collective investment industry in general. It harms not only the fund managers but also the depositary entities (as well as other stakeholders), as they will lose this part of the business, which currently amounts to some €28,000 million, with 60 fund managers and 12 depositary entities operating in Spain.


But its impact is seen not only from an equity perspective, but also from many other angles. This is the view of the participants in the 22nd edition of the Debate Legal FundsPeople. In the opinion of José Carlos Sánchez-Vizcaíno, Cecabank's Director of Depositary Supervision, "the blow is also likely to be to the professional human capital engaged in providing the services required by these investment vehicles. Even with those SICAV that opt for reinvestment, the uncertainty will be whether the initial transfer, which under the rules will be to other Spanish vehicles, will be maintained there, or whether we will then see these vehicles used as a springboard to other products in other jurisdictions that enjoy greater stability", he argues.

The expert points out that this could also accelerate some operations within the sector: "Fund managers or depositary entities may see the economic viability of this activity endangered, due to the weight they have in these vehicles.  This may lead to the acceleration of integration processes of fund managers and financial advisory firms in search of sufficient scale".

For her part, Elisa Ricón, CEO of Inverco, notes that "the SICAV is an open vehicle and these changes in the tax rate incorporate a major problem in terms of fairness among stakeholders".

"It is frustrating for the industry, after so much effort, to have reached this situation. Our role as a firm is to accompany clients in order to make the process as efficient as possible. We trust that in the future there may be a change in the political agenda to recover investment vehicles that will attract collective investment in Spain once again", confesses Ricardo Plasencia, partner at CMS Albiñana & Suárez de Lezo.

Some doubts

In any case, there are certain aspects of the transitional system that remain unresolved. María Pérez-Fontán, Head of Legal Advisory at CaixaBank AM, says that the law raises some questions with regard to the SICAV that will be maintained: "The fact that taxation is different depending on the compliance with certain requirements that must be met during a minimum number of days of each fiscal year, raises doubts about how to reconcile the rate applicable to each of them on the date of accrual and declaration of the tax, with the estimate thereof that the Collective Investment Scheme Management Companies conduct each day to calculate the net asset value of the SICAVs", she argues.

Moreover, the current market environment further complicates the management of these investments. "The transitional system that the companies had, more or less planned, and which entails the necessary sale of the assets in the portfolio, has become more complicated with the conflict in Russia and Ukraine and the consequent uncertainty and volatility that it generates in the markets", she suggests.

Inverco has tried to coordinate with fund managers. "The whole process needed to be brought together and put in order. But it does not generate more savings and we have to try to implement it in the most efficient manner", says Ricón.

In addition to the important coordinating role of Inverco, which has also published an implementation guide for SICAVs</span>. The industry highlights the role of the official organisations involved. "In particular, from a corporate point of view, the work undertaken by the Commercial Registry to resolve the numerous doubts raised by the operation. It is important to remember that, besides the corporate-commercial operation, the transitional system also involves the more operational aspect of the reinvestment of capital, which has to be completed by July 2023", explains Pérez-Fontán.