A new corporate vehicle for investments in small and medium-sized companies: simple investment companies

By Daniel Giuliano, Portolano Cavallo Studio Legale 

Law Decree no. 34 published on April 30, 2019 (the “Decree”) establishes a new corporate vehicle named “Simple Investment Company” (“Società di investimento Semplice”) (“SIC”), to facilitate fundraising by early stage small and medium-sized companies.

SiCs are defined as Italian alternative investment funds (FIA) that are targeted at professional investors, incorporated in the form of an Investment Company with Fixed Capital (“Società d’Investimento a Capitale Fisso”) that directly manages its assets.

SiCs’ main features, as set forth under the Decree, are:

(i) their net assets must not exceed EUR 25,000,000 (this limit applies in aggregate in cases where one subject controls several SICs);

(ii) their corporate purpose must be limited to direct investment in non-listed and early stage small-medium sized enterprises;

(iii) SiCs are prevented from using financial leverage;

(iv) their minimum share capital must be EUR 50,000 (i.e., equivalent to the minimum share capital provided for Italian Joint Stock Companies – “Società per Azioni”)

(v) SiCs are not subject to supplementary controls and disclosure obligations vis-à-vis the competent authorities that relate to other types of investment companies.

Compliments of Portolano Cavallo Studio Legale, a member of the EACCNY