Germany Establishes Legal Basis To Boost Spezialfonds Cryptocurrency Investments | New

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German Spezialfonds can now invest up to 20% of their assets in cryptocurrency, in accordance with the new Fondsstandortgesetz (FoStoG), or Fund Location Act, which came into effect on July 1.

The new law also allows the management company of a special alternative investment fund (AIF) Spezial AIF to invest in holdings of unlisted companies.

The new rules, which are translated into German law in Directive (EU) 2019/1160 amending Directives 2009/65 / EC and 2011/61 / EU on the cross-border distribution of undertakings for collective investment, aim to strengthen the attractiveness of Germany as a location for investment funds.

According to GlobalBlock, a UK-based digital asset broker, FoStoG could lead to an increase in Spezialfonds’ asset allocation to cryptocurrency.

In an ideal scenario, a 20% allocation of Spezialfonds to the cryptocurrency equals investments totaling $ 415 billion (350 billion), based on the total assets under management of these funds in Germany, GloabalBlock calculated.

Last year, the Ministry of Finance proposed a bill to further support the activity of investment funds in the country. The parliament, the Bundestag, passed the law in April, followed by the Bundesrat, the constitutional body representing the Länder, in May.

The new regulations aim not only to make it easier for funds to operate in Germany, but also to facilitate the transfer of capital from a company to employees.

According to Article 19a of the new law, the transfer of assets of a business from the employer to its employees during a calendar year is exempt from tax. This measure aims to increase the capital endowment for start-ups.

The FoStoG also introduces a new regime for the Impact Investmentfonds Entwicklungsfrderungsfonds – special AIFs investing capital in assets measured to achieve sustainability goals in emerging markets.

Impact investment funds can be set up as special national open AIFs or as special closed national AIFs.

AIF management companies, which manage an Impact Investment fund, must comply with the operating principle of impact management defined by the International Finance Corporation, a member of the World Bank Group, in accordance with the law.

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