New Opportunities for U.S. Managed Funds in the German Marketplace
Daily News; White Plains › January 13, 2005
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Summary
Non-German funds, including U.S. managed funds, have an opportunity to gain enhanced access to the German market as a result of two new laws recently adopted in Germany. In particular, U.S. funds that are distributed privately, such as private equity funds and hedge funds, may benefit from the new rules.
The new German Investment Act and the Investment Tax Act, which became effective Jan. 1, overhaul the tax treatment of investments in non-German investment funds. The purpose of the new laws is to provide a level playing field for German and non-German funds with respect to German investors and to provide a legal framework for hedge funds in Germany. Under the new tax rules, German investors generally would receive beneficial tax treatment if the non-German funds in which they invest comply with certain reporting requirements. Furthermore, the new Investment Act allows German regulated open-ended funds to offer funds of funds and to include non-German hedge funds in their investment portfolios.See the full content of this document
Extract
New Opportunities for U.S. Managed Funds in the German Marketplace
Transparency Principle
German investors in a non-German fund generally would benefit if income from the fund were taxed on a transparent basis, meaning that the income and its character would flow through to investors and be currently taxable regardless of whether the income is repatriated by the funds to the investors. This tax treatment would allow German investors to enjoy full or partial exemptions on capital gains and dividend income, and other prefer...See the full content of this document
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