THE
NORDKAPP GROUP
The
Group 
FREQUENTLY
ASKED QUESTIONS
It is a joint-stock company formed in accordance with current legislation, domiciled in, and with its administration based in Spain. During its constitution it is placed under a previous administrative proceeding with the CNMV in whose registry it will have to later enrol. Its objective is fundraising, and such funds are then managed and invested in goods, rights, values or other financial or non-financial instruments, with the investment returns being established as a function of the collective results.
Management and administration skills developed by the SGIIC considerably simplify operations for the investor. The statutory disbursed minimum capital must be 2.4 million €. This amount must be completely subscribed and disbursed at the moment of the constitution of the society and must be maintained whilst the society is enrolled in the registry.
In its operation, a SICAV is similar to an Investment fund since the theoretical value of the shares are calculated and published daily (the result of dividing the value of the assets and the number of shares in circulation).
SICAVs are expressly obliged to take part in the Stock Market or the Stock-Exchange Alternative Market, through buying or selling, in order that the quotation of their shares stay sufficiently close to its accountable theoretical value (settlement value). If the Sicav does not quote the settlement value would be provided by the same mechanism as Investment funds.
SICAV shareholders must deposit their shares in a financial organization such as a bank, etc., through which their operations can be settled. Investor liquidity is doubly guaranteed: via the stock market and by the same SICAV through the purchase of its own actions.
By reason of their condition as a channeler of collective saving, the legislator has confered a very beneficial tributary regime to SICAVs from the moment of their constitution.
-For the SICAV
· 1% company tax (against 32.5% general for the tax period beginning 1 January 2007; and 30% for the tax periods beginning 1 January 2008).
· No rights to deduction in quota.
· When the amounts of quarterly payments, retentions and payments on account surpass the total amount, the Administration will return the excess.
· Constitution, increase of capital and fusion are free from ITP/AJD.
· Exclusion from the regime of patrimonial societies.
-For the partners
· The positive or negative income derived from the ownership of shares in SICAVs has the same treatment as that applicable to negotiated shares, excepting the deduction of double imposition of dividends, to which they do not have a right.
· Positive income generated by the transmission of SICAV shares is subject to a deposit on account (at the present moment 18%) which must be made by the partner.
· The purchase of SICAV shares is valid, for a receiving entity, to lodge amounts coming from the exchange of shares and participations that the partner may have coming from another IIC which fulfills the requirements for non-integration in its tax base.*
*The gains or losses in patrimony generated by the sale of shares are not computable when the amount obtained is used in the acquisition of other shares or participations in other Collective Investment Schemes, as long as the following two conditions are fulfilled: 1) That the number of partners in the scheme whose shares are being transferred is superior to 500. 2) That the tax-payer has not owned more than 5% of the capital of the entity in the twelve months preceeding the movement.
· The investment in Sicav is only liable for income tax if the shares are sold. Whilst the partner maintains the investment he will not pay taxes on non-realised gains.
It is the price at which the shares of the society can be bought and sold. It varies daily, based on the variations of the assets in which the society has invested. It is calculated by dividing the value of the patrimony of the society by the number of shares in circulation.
An investment fund is no more than the creation of a certain volume of saving, either by companies or individuals, managed by a group of professionals specialized in the making of investments in financial markets, with the aim of obtaining a greater yield than the one obtainable separately.
The yields generated by investment funds can be recovered at any time. On reimbursement personal income tax is payable at 18%.
In Spain more than 6,000 investment funds with a patrimony that surpasses 250,000 million euros are already commercialized. Quality, with so many products to choose from, varies tremendously. But it can be said that once a suitable fund is chosen - one that offers the maximum yield bearing in mind the time-frame of the investment and the aversion to risk defined by the client - investment funds are the most efficient financial vehicles that exist in Spain. Their simplicity (unlike the SICAVS they lack legal personality), their transparency (they are under the control of the CNMV), their diversification of risk (the portfolio must be diversified) and their taxation at 18%, makes investment funds the ideal instrument in which to invest savings.
Nordkapp has a complete range of investment funds that adapt to the profile of each client. Those investors who look to invest in the medium and long term will find in our funds the ideal instrument for their savings.
With the new Income tax law capital gains derived from investment funds are integrated in the denominated tax base for savings, being taxed at a fixed 18%, regardless of their nature, the generation time-frame and the tax base corresponding to other incomes of the contributor.
If instead of a sale (reimbursement) a transfer is made from one fund to another (either between the same or different organizations), the profit will not be taxed until the moment at which the investment is definitively liquidated.
The average yield that appears in all the tables of historical yields of Nordkapp's funds is the rate of effective interest (TAE), expressed as an annual rate, that the fund has obtained from the outset. In investment analysis this is the most important figure because it allows the comparison of real yields of diverse assets.
Since the majority of European funds are accumulative, the capital gain that the funds aregenerating is reinverted constantly, so that the yield is obtained not only on the invested capital but also on the benefits obtained. The TAE (Annual Rate of Equivalence) considers this fact. In order to measure the quality of a fund, it is essential to analyze its annual average yield over the long term (at least 5 years and if possible from its start date) and to compare it with its counterparts and with indices of reference.
This is the figure that the institutional investors analyze with attention, since it is the real interest that the investor will obtain by his inverted capital.
Free Investment funds, originally named hedge funds (literally “cover funds”, although the name that tends to be used is “alternative investment institutions”) are financial investment instruments.
The term “hedge fund” was applied to a fund that, for the first time, combined short and long positions in values with the purpose of covering the portfolio against movements in the market.
Caracteristics:
In the absence of a precise definition for “alternative
investment institutions”, we will enumerate the characteristics that
diverse public and private institutions have associated with these institutions
over the years:
- A vehicle for collective investment that is organized privately, managed
by professional companies that receive commissions on the results obtained;
they are not available to the general public because they require very large
minimum amounts of investment.
-- They seek absolute yields rather than relative gain based on a reference
index.
- They use financial techniques of investment not allowed to traditional
funds: uncovered sales or short-selling, the use of product derivatives
and buying values by means of aggressive leverage.
- They are submitted to reduced regulacion
- They are subject to limited obligations with respect to information and
do not have give liquidity on a daily basis.
Hedge Fund behaviour at a Global Level:
According to existing estimates, the hedge fund
industry has shown important growth in recent times, particularly since
2001. A great part of the growth in the last few years has been due to the
contributions made by pensions funds and other institutional investors.
Geographically the United States continues to be the country of reference in the industry, but its importance has been reduced in the last few years in favor of other zones like Europe.
The assets managed by the sector have reached the sum of a trillion and a half Euros.
There are nearly 10.000 different alternative
investment institutions.
It is very important to advise Nordkapp, by post, of changes of address or of bank details. This will avoid delays in administrative replies, that could, in some instances, prevent the correct reception of our communications.
We define Pension Funds as assets without their own judicial personality formed by all the contributions made by the participants, plus the returns generated by the assets. The returns generated by a pension fund can only be recouped in the event of the retirement, disability or death of the participant. The main advantage of pension funds against investment funds is to be found in their fiscal situation.
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The benefits perceived as capital have an income tax reduction of 40%, only in the case of contributions subscribed prior to 31/12/2006, but they must have been in existence for more than two years in some plans. It is not a neccesary requirement for this deduction that the plan be cashed in the same year as the date of retirement; the encashment of benefits can be put off until later.
