The new Investment Regulation allows investments in new funds: closed-ended real estate funds, infrastructure funds and other alternative investment funds as well as debt funds. The granting of loans has also become more attractive and is no longer slavishly tied to the rating agencies.
The new Investment Regulation and the Pension Fund Capital Investment Regulation have been updated to reflect the amended German investment laws following the repeal of the German Investment Act and the entry into force of the German Capital Investment Code. The German legislator's explicitly stated goal is to facilitate German insurance companies' investments in potentially more profitable investments.
The classification of investment funds into one of the categories depends once again primarily on the assets in which a fund invests. The catalogue of investment funds distinguishes between private equity funds, real estate funds, securities funds and other funds. For this purpose, the new Investment Regulation refers to assets that can be acquired in accordance with the provisions of the German Capital Investment Code.
The management of collective investment funds is VAT-exempt in the EU as laid down in the EU VAT Directive. In the case “Fiscale Eenheid X“ (C-595/13), the Dutch Supreme Court has referred to the CJEU whether such exemption also applies to the management of real estate funds. According to Advocate General Kokott, property management services for real estate funds fall within the scope of the VAT exemption. Should the CJEU adopt this opinion, this would have an impact on the VAT treatment of asset management and property management services for real estate funds in the EU.
The German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, or “BaFin”) has announced a change in its administrative practice with regard to debt funds. Until now, German debt funds were only allowed to grant loans in very limited circumstances. With this change in administrative practice, German debt funds are no longer subject to these limitations and are now free to originate loans directly in Germany. This also means that foreign (non-German) debt funds are also allowed to issue loans in Germany.
