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Carlos Fradique-Mendez Luis Gabriel Morcillo During 2013, the Colombian Government enacted several regulations simplifying private equity and venture capital (PE/VC) funds' legal framework, providing legal stability and confidence to local and foreign investors (including foreign funds). As of June 2013, local funds may be structured with different participation units reflecting variable fees, preferred returns, or investor types, and which should be now placed in the custody of independent trust companies, following international trends on the protection of funds' interests. A significant reform was the introduction of a new category of investment funds focused on real estate assets, which should now be managed through a regulated management structure that permits large numbers of real estate properties to be exploited through these types of funds. At the same time, one concern remains relating to the issuance of Decree 1848 of 2013, which modified tax withholding rules on the distribution of PE/VC funds. However, the Colombian private equity industry relies on some structured competitive advantages that attract foreign investment, such as treating carried interest as a capital gain and not as ordinary income commonly subject to a tax rate of 10%, or that the fund itself is not subject to income tax (the transparency principle). Decree 1848 introduced a specific methodology that must be applied by the local fund's administrator when determining the portion of the corresponding distribution that is subject to withholding tax.

Recently announced EU reforms introduce yet another set of compliance considerations for traders, and the possibility of greater regulatory intervention

Nao Ohira The Financial Services Agency of Japan published proposed amendments (the Amendments) and started to accept public comments, to ordinances and other legislation relating to the Money Lending Business Act, on January 27 2014. The purpose of the Amendments is to exclude (under certain conditions) restrictions imposed by the Money Lending Business Act (the Regulations) in cases where a company makes a loan to another company belonging to the same group, and also in cases where an investor who owns shares in a joint venture business makes a loan to such business. Under the Money Lending Business Act, a person who intends to engage in a money lending business must be registered with the relevant government authority, satisfy strict conditions and abide by various regulations.

Pedro Cortés Marta Mourão Teixeira On January 14 2014, the Macau Monetary Authority reported that, according to the 2014 Report on the Index of Economic Freedom (the Index) drawn by the Heritage Foundation, the Macau Special Administrative Region (SAR) takes 29th place amongst the 178 ranked global economic systems, as well as seventh place out of 42 countries in the Asia-Pacific region, right after Hong Kong, Singapore, Australia, New Zealand, Chinese Taiwan and Japan. The score awarded to Macau's economic freedom is 71.3. Its overall score is quite higher than both world and regional averages.

The introduction of new substance requirements for global business companies operating from Mauritius, which will become effective on January 1 2015, are part and parcel of a strategy to further boost financial services and increase their input to the country's gross domestic product (GDP).

After Hong Kong, which city has the most potential as an offshore RMB hub? Vote now

In late 2013, the Slovak Parliament approved an amendment to the income tax act (the Amendment). One of the objectives of the Amendment is to fight tax evasion. Some of the most interesting changes are: higher withholding rate/tax security; the right to tax Slovak tax non-residents on certain transactions; introduction of tax licences; and, tax rate for legal entities reduced to 22%. Higher withholding rate

Soonghee Lee In May 2011, an employee at a defendant's branches introduced a discretionary investment agreement operated by a certain investment advisory company to individual investors (the plaintiffs). The investment product was mainly invested in KOSPI 200 options listed on the Korea Exchange using contract monies received by the investment advisory company from investors under discretionary investment agreements. In introducing the investment product, the employee presented and introduced a discretionary investment proposal prepared by the investment advisory company. Later, the employee visited the plaintiffs and prepared an application for the opening of an account, which proposed the plaintiffs' subscription to the investment product, with the defendant as the securities company for transactions. In August 2011, the KOSPI 200 stock price index declined sharply, and the plaintiffs incurred considerable losses. The plaintiffs then filed a suit for damages against the defendant, claiming the defendant had made an investment recommendation and thus had violated the suitability principle and its duty to explain, which should have been observed when the investment recommendation was made, under the Financial Investment Services and Capital Markets Act (FISCMA). In the course of litigation, the defendant argued that no investment recommendation had been made, since the investment product was not sold by the defendant itself, and investment recommendations must be construed as limited in scope to cases where the relevant financial investment business recommends an agreement which it directly handles. The defendant's argument was that it had merely introduced the investment product and, for the plaintiffs' convenience, had assisted in the execution of the contracts. Therefore, the defendant had not made an investment recommendation subject to the suitability principle and the duty to explain. In support of such argument, the defendant stated it did not receive any sales commission or operating income, and did not directly handle the investment product. The court of first instance held that the defendant, as a financial investment business, was in the position of a person recommending the investment product to the plaintiffs. The court held that the employee first presented and explained the discretionary investment proposal to the plaintiffs while introducing the investment product; the plaintiffs only intended to invest after listening to such explanation, and their investment decision seems to have been based on the employee's explanation. As the employee even prepared a confirmation statement on the results of investment tendency screening and a discretionary investment agreement for each of the plaintiffs, in their name, the plaintiffs could reasonably believe that the defendant was performing the role of an intermediary for the discretionary investment agreements, and although the defendant did not obtain any sales commission or operating income, the defendant did earn a transaction fee.

The first Fibra to raise international debt offers important lessons for Mexico’s budding real-estate investment trust sector

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