Today, Friday, we await the approval of the entrepreneurs' law. The whole business world is expectant about the practical consequences it will have on job creation, business investment, but above all, on scarce financing.
Funding boost?
In the draft presented at the beginning of the year, the section that was most expected to include measures to increase funding levels is the Measures for business promotion: Garrigues summarised them as follows:
3. Business promotion measures:
- The amendment of the private insurance regulations to allow technical provisions to be invested in securities admitted to trading on the Alternative Stock Market (MAB) or another multilateral trading system to be specified by Royal Decree, subject to certain limits.
- The amendment in the same sense of the pension plans and funds regulation to allow pension fund investments on the MAB.
- The elimination, in order to facilitate access to non-bank financing, of the maximum issue limit (paid-up share capital plus reserves) for bonds or other securities representing debt, established in article 405 LSC, when the securities are aimed at (i) qualified investors; (ii) investors acquiring a minimum amount of 100,000 euros or (iii) issues in which the nominal value per unit of the securities offered is at least 100,000 euros.
"The measures are aimed at allowing fund managers to invest in SMEs but through the alternative stock market or other similar systems. The regulator seeks to encourage such investment but through regulated and stable systems. During 2012, the MAB has had very little activity, only 5 SMEs have entered the market. In our experience, the main reason for this is the high costs involved in the process, which leads to the search for financing in other ways. In other European countries, these markets are highly developed, such as the IAm in London", says Diego Gutierrez (ABRA INVEST) specialises in corporate finance for SMEs.
Taxation and procurement: other measures with an impact on investment
"Although these are not measures that directly expand the lines of financing, we hope that they will have an effect in terms of greater investment initiative. The fiscal measures include reductions in corporate tax, although only for newly created companies (2013). The tax reduction should generate a greater expectation of returns for entrepreneurs and encourage them to invest. In any case, the main reason for the reluctance to invest is due to risk-market issues and not so much taxation", says Diego Gutierrez.
"In terms of hiring facilities, I think it can have a greater impact on the creation of new initiatives. Social security labour costs are so high and rigid that they make it very difficult to create jobs. We believe that these new forms of recruitment, if they are to become new initiatives, will give young people who want to work new opportunities". "The main difficulty we find with the projects we are involved in is the lack of professionals trained in specific disciplines; training should be less generalist and more specialised, especially in the new technologies sector", points out Diego Gutierrez.
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