Diapozitiv 1

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PRESENTING THE VENTURE CAPITAL MEASURES IN THE
REPUBLIC OF SLOVENIA
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ABOUT SLOVENIA
Basic information Area 20,273 km2Population
2,019,406 (30.6.2007)Capital LjubljanaLanguage
Slovene also Italian and Hungarian in
nationally mixed areas Currency EUR (since 1
January 2007)? Important dates
-Independence - 25 June 1991
-Member of EU - 1 May 2004
-Introduction of the euro -
1 January 2007
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ABOUT SLOVENIA
Economy in 2007  GDP per capita EUR 16,615GDP
growth rate 6.1Inflation rate 3.6Exports of
goods and services EUR 23.8 billion Imports of
goods and services in 2006 EUR 24.4 billion
Unemployment 4.9 (surveyed unemployment level
according to ILO standards)?
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VENTURE CAPITAL INVESTMENTS IN SLOVENIA
Source Vadnjal 2006
estimated
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RATIO BETWEEN THE LEVEL OF VENTURE CAPITAL
INVESMETS AND GDP
The EVCA comparative analyses of ratio venture
capital investments and GDP has shown that
Slovenia is on the bottom of the European and
also Central European scale.
Source EVCA 2004
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NATIONAL MEASURES TO SUPPORT THE DEVELOPEMENT
OF THE SLOVENIAN VENTURE CAPITAL MARKET 1. a
new law for the venture capital companies (The
Venture Capital Companies Act) 2. tax
reliefs to stimulate establishment of the venture
capital companies (VCC) and investing in
high-technology SMEs 3. establishment of
Venture Capital Company of the Republic of
Slovenia (VCCRS).
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• 1. LEGAL FORM OF THE VCC
• The Republic of Slovenia adopted The Venture
  Capital Companies Act in 2007 (Official Gazette
  of the RS no. 92/2007).
• The principle aims of the Act
• to define the legal form of the VCC
• to define VCC activities
• to stimulate the venture capital investments by
  private investors
• (4) to increase the number of high-technology
  SMEs and consequently the number of employees.

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• THE LEGAL CHARECTERISTICS OF THE VCC
• legal organisational form the VCC can be
  organized as a private limited company (Ltd), a
  public limited company (PLC) or limited
  partnership
• main activities venture capital investments in
  the promising SMEs,
• mezzanin capital investments, granting
  credits and guarantees at initial
• development stages of SMEs (seed, early
  stage and expansion) not listed on a stock-market
• max. amount of investment in the sense of
  mezzanin capital, credits and guarantees is
  limited by three times the value of VCC venture
  capital investment share in SMEs
• VCC can hold an equity interest for a maximum
  period of 12 years
• management the VCC is represented and managed by
  another company (legal representative- management
  company)
• contribution to the VCC min. 50.000 EUR in cash
  by investor.

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• 2. SLOVENIAN TAX RELIEFS OF VENTURE
• CAPITAL INVESTMENTS
• The Republic of Slovenia has determined the tax
  reliefs for venture capital
• investments for VCC and for investors (legal
  persons or natural persons)
• that invest through VCC by the following Acts
• The Corporate Income Tax Act (Official Gazette
  of the RS no.
• 117/2006)?
• The Personal Income Tax Act (Official Gazette of
  the RS no.
• 117/2006).

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• THE TAX RELIEFS FOR CORPORATE INVESTORS
• dividends corporate investors that invest in
  VCCs do not pay dividend
• tax
• dividends (non-residents) they have no
  withholding tax under following
• conditions
• (1) min. 10 ownership share in SME,
• (2) they have ownership share min.
  24 months.
• capital gains (CG) corporate investors
  (residents or non-residents)
• engaging in venture capital investment
  activities do not pay capital gains tax
• under following conditions
• capital gains have been realized through venture
  capital investments
• capital gains have been realized by the VCC
• the VCC need to have the legal status of VCC
  over the complete maturity of ownership
• share in the SME.

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• THE TAX RELIEFS FOR NATURAL PERSONS
• dividends natural persons who invest in VCC pay
  a 20
• tax on dividend
• capital gain (CG) natural persons who invest in
  VCC do not
• pay capital gains tax.
• Slovenia has signed an agreement with EU Member
  States to avoid double taxation for non-residents.

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• THE PROPOSALS FOR MORE STIMULATIVE TAX
• SYSTEM FOR VENTURE CAPITAL INVESTMENTS
• In Slovenia we do not have equal conditions
  concerning dividends tax
• reliefs for natural persons and legal persons.
• Venture capital investment tax losses are not
  recognized (meaning that
• venture capital investors cannot claim venture
  capital investment losses)?.
• We should also recognize the tax reliefs for
  risk capital investments,
• not only for venture capital investments.

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• 3. THE ESTABLISHMENT OF VENTURE
• CAPITAL COMPANY RS (VCCRS)?
• The founder and sole member of the VCCRS is
  Slovenian Enterprise
• Fund (SEF), investing 600.000 EUR in VCCRS
  (SEF is fully owned by the
• RS)
• Ministry of the Economy RS will give financial
  support for VCCRS with ESRR funds to the amount
  of 35 million EUR
• Republic of Slovenia and EU not become
  co-financing partners or shareholders in VCCRS
• the VCCRS will be liquidated in accordance with
  the law and thereafter a new VCCRS will be
  established

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• VCCRS will invest in SMEs only on condition that
  the relevant
• company (SME) is able to seek out private
  investors (private VCC,
• legal or natural persons)
• VCCRS legal form is private limited company
  (Ltd)
• VCCRS is represented and managed by the company
  Prvi kapital,
• d.o.o (Ltd) according to the management
  contract.

VCCRS
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MANAGEMENT, SUPERVISORY AND CONSULTATIVE STRUCTURE
OF THE VCCRS
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• THE MISSION OF THE VCCRS
• to stimulate Slovenian venture capital market
  with additional funds,
• to take higher risk of investing in initial and
  development stages of
• SMEs,
• to invest venture capital in potential SMEs with
  private investors,
• to stimulate the Slovenian venture capital market
  through government
• funding instruments ,
• to inform private investors about business
  opportunities.

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• THE PRINCIPLE AIMS FOR THE YEARS 2008 TO 2013
• to support 32 SMEs with venture capital,
• to establish 8 high-technology companies,
• the average value of investment (capital,
  mezzanin capital, loans) will
• be approximately 1 million EUR per supported
  project,
• the total average value of VCCRS venture capital
  investment in
• collaboration with private investors will be
  approximately 2,4 million
• EUR per supported project, (40 VCCRS and 60
  private VCC and/or other
• private investors),
• maturity of venture capital investment depends on
  the
• development stage of SME (the planning period is
  6 years).

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• CO-INVESTMENT PARTNERS
• The VCCRS will invest venture capital with
  private partners in different ways
• SMEs will seek out private investors through own
  methods,
• VCCRS will seek out private investors for SMEs,
• VCCRS will be invited by other VCC to
  participate in co-investment
• partnership.

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THE PARTNERSHIP BETWEEN PRIVATE INVESTORS AND
VCCRS
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NECESSARY FUTURE MEASURES TO DEVELOP THE
SLOVENIAN VENTURE CAPITAL MARKET

• to create a more business-friendly environment
  for SMEs (for example,
• simplification of the incorporation procedure
  and lower costs of
• establishment)?
• to increase RD funding,
• to improve education system for
  entrepreneurship,
• to improve access of SMEs to financing,
• to establish more efficient partnership between
  universities, research
• institutions and entrepreneurship.

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THANK YOU FOR YOUR ATTENTION!!!
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