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EVCA unveils rankings of EU tax and legal environments with UK at the top

The tax and legal environment in the UK is the most supportive in Europe for the private equity industry, according to research produced by the European Private Equity and Venture Capital Association (EVCA).

The report ranks conditions in all 15 EU member states as part of an exercise to accelerate regulatory homogenisation.

EVCA's benchmarking tool measures a series of variables for each country and then produces a composite score to determine the supportiveness of each local environment. The scoring runs from one to three, where one is optimal.

The UK topped the table with a score of 1.20, followed by Ireland with 1.58 and Luxembourg on 1.67. Germany, Denmark and Austria were at the bottom, with scores of 2.41, 2.48 and 2.53 respectively.

The political momentum behind the private equity agenda has been choppy at best in recent years. Back in 1999, Europe's leaders used the Lisbon economic summit to declare an ambition to make the region the most ‘competitive, knowledge-based' economy in the world by 2010 but action has been patchy ever since.

The Risk Capital Action Plan, the centrepiece of the EU's determination to promote private equity, has made progress in some departments but hit walls elsewhere. EVCA's benchmarking exercise aims to lay bare the individual regional shortcomings in the hope that it increases the pressure on governments to dismantle obstacles. 

‘The purpose of the report is to promote convergence and not disparity,' said Max Burger-Calderon, EVCA chairman. ‘This benchmark paper should be used on a national level further to improve the fiscal and regulatory environment of this dynamic, growth driving industry and to inspire decision-makers to develop favourable, harmonised tax and legal policies with respect to private equity.'

The paper looked at both the supply side and demand side of the private equity industry, measuring the following variables: fund structures, merger regulation, pension funds, company tax rates, company tax rates for small and medium-sized enterprises, capital gains tax for individuals, tax incentives for individuals investing in private equity, taxation of stock options, entrepreneurial environment and fiscal incentives for research and development.

The biggest brake on further progress, thwarting the ambition of the Lisbon agenda, has been the profound deterioration in macroeconomic conditions over the last two years. Europe's governments enthused about private equity during the late 1990s but have more immediate concerns, like rising unemployment and ballooning public sector deficits, to wrestle now.
EVCA unveils rankings of EU tax and legal environments with UK at the top

The tax and legal environment in the UK is the most supportive in Europe for the private equity industry, according to research produced by the European Private Equity and Venture Capital Association (EVCA).

The report ranks conditions in all 15 EU member states as part of an exercise to accelerate regulatory homogenisation.

EVCA's benchmarking tool measures a series of variables for each country and then produces a composite score to determine the supportiveness of each local environment. The scoring runs from one to three, where one is optimal.

The UK topped the table with a score of 1.20, followed by Ireland with 1.58 and Luxembourg on 1.67. Germany, Denmark and Austria were at the bottom, with scores of 2.41, 2.48 and 2.53 respectively.

The political momentum behind the private equity agenda has been choppy at best in recent years. Back in 1999, Europe's leaders used the Lisbon economic summit to declare an ambition to make the region the most ‘competitive, knowledge-based' economy in the world by 2010 but action has been patchy ever since.

The Risk Capital Action Plan, the centrepiece of the EU's determination to promote private equity, has made progress in some departments but hit walls elsewhere. EVCA's benchmarking exercise aims to lay bare the individual regional shortcomings in the hope that it increases the pressure on governments to dismantle obstacles. 

‘The purpose of the report is to promote convergence and not disparity,' said Max Burger-Calderon, EVCA chairman. ‘This benchmark paper should be used on a national level further to improve the fiscal and regulatory environment of this dynamic, growth driving industry and to inspire decision-makers to develop favourable, harmonised tax and legal policies with respect to private equity.'

The paper looked at both the supply side and demand side of the private equity industry, measuring the following variables: fund structures, merger regulation, pension funds, company tax rates, company tax rates for small and medium-sized enterprises, capital gains tax for individuals, tax incentives for individuals investing in private equity, taxation of stock options, entrepreneurial environment and fiscal incentives for research and development.

The biggest brake on further progress, thwarting the ambition of the Lisbon agenda, has been the profound deterioration in macroeconomic conditions over the last two years. Europe's governments enthused about private equity during the late 1990s but have more immediate concerns, like rising unemployment and ballooning public sector deficits, to wrestle now.

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