The European Venture Capital Funds (Euveca) Regulation is set to be updated by the European Commission, simplifying the process of investing and fundraising across borders within the EU, it was announced today.
The commission is considering a passport system, similar to that used by the financial sector, which enables a firm registered in one EU country to conduct operations across the bloc without additional regulatory hurdles.
The move follows data published by Invest Europe, the trade association representing private capital, that showed only a quarter of VC fundraising in 2013 to 2015 was secured from Europe-based investors located outside the fund’s country.
The European Commission’s plan would outlaw member states’ existing charges that might discourage cross-border activities. Funds would also be allowed to back companies with up 499 staff, double the current allowance.
Michael Collins, deputy chief executive and public affairs director at Invest Europe, said: “As we look to increase investment into Europe’s dynamic small and medium-sized businesses, an improved Euveca marketing passport for fund managers will encourage cross-border flows of capital and deliver on a key component of the capital markets union.
“These regulatory revisions will enhance the options for capital to be raised and invested into the growing European businesses that need it most. The fees and charges unfairly imposed on fund managers by some EU member states are barriers to fundraising and must go.
“When it comes to investing the capital, allowing follow-on investments into companies that are expanding rapidly and creating jobs could fuel the next big European champions, in the same way fund managers in Silicon Valley supported the growth of Google and Facebook.
“We look forward to working closely with the European Commission, Parliament and Council in the coming months to secure the revised regulation’s speedy adoption.”