The new regulations for investment funds in Costa Rica allow for finances to be raised for construction, energy, transportation and public infrastructure projects.
The amendment to the General Regulationon Managing Companies and Corporate Investment Funds was adopted on 23 June. With this change, any investment project, from theconstruction of houses to hydropower stations, can be financed and developed using a special investment fund which will be known as Infrastructure Project Investment Funds.
A proposal has been made to extend the concept of real estate development funds to cover public and private projects for all types of infrastructure.
If the reform to the General Regulations on Management Companies and Investment Funds is approved, any investment project, from building houses to hydroelectric stations, will be able to be financed and developed through a special investment fund, that fund which would be called the Fund for Investment Infrastructure Projects.
A proposal put forward by the Superintendency of Securities Market seeks to specialize market funds further, so that administrators focus on design and management and engage third parties for marketing.
The proposal will be submitted for analysis to the National Council of Supervision of the Financial System in October.
Elfinanciero.com reports that among the proposals for modifications they are working on is "...
The Costa Rica Financial Supervisory Authority is proposing changes to the minimum number of investors required to keep a fund running.
The controversy generated on June 2 over the reduction of the minimum number of investors needed for investment funds led the regulatory authority of the financial market to propose a new change to the rules, with the difference being this time the moment of constitution of the fund from the operational stage.
An investigation is being carried out on the impact that changing the requirements for the composition of funds could have on tax revenues.
From a press release by the Ombudsman of Costa Rica:
The Ombudsman is investigating a decision by the National Financial System Supervision Council (Conassif) to amend the requirements for the composition of an investment fund changing from having an obligation to have 50 people to having only two natural or legal representatives for its creation.
The adjustments to the rules that will come into force will make the financial sector, which had become stagnant, more attractive.
Among the major changes is a minimum of two people making up the members of a mutual fund, rather than 50 as stated in the aforementioned regulations. This has been questioned as being a loophole whereby economic activities with few investors, which should be incorporated as a company and consequently pay a rate of income tax of 30%, could now register as investment funds, paying only 5% by way of the tax.
The new General Regulation on Management Companies and Investment Funds will allow the revival of investments and strengthen the industry's credibility.
This is the view of Elena Goldgewich, Interbolsa Saf's general manager, who notes that these variants occur in critical issues such as the right to withdraw, the term of investments in closed funds, and other issues.