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Tax Engineering

What is a SICAV?


What are the advantages and disadvantages of SICAVs? What taxes do they pay? Are they legal? What are the necessary requirements for its constitution? What are mariachis and what is their function?


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The most important SICAVs in the European Union, due to its favorable taxation, are those registered in Spain and Luxemburg

The SICAVs are a type of special partnerships and investment vehicles targeting large fortunes in order to invest it globally in real estate and stock exchange. The term SICAV comes from French and stands for “Société d´I nvestissement à CApital Variable"

The SICAV pays 1% of tax on earnings generated during the fiscal year. This special tax is effective if the generated profit stays in the investment company. If the profit generated by the company pays dividends among the 100 members, than the tax rate shall be equal to a Spanish corporation, i.e. 30% of the generated profits.

SICAV bill 500 euros

The requirements to register a SICAV are the following: 

  1. Share capital is equal to 2.4 million Euros 
  2. 100 or more shareholders and members
  3. There should be no criminal record or penalties relating to money laundering and tax fraud  
  4. Limited investments 
  5. The supervision is carried out by the CNMV and not by the tax agency

Is it legal to invest in a Spanish SICAV? Yes, it is legal to invest in SICAV. There are no restrictions by nationality and any person can become its shareholder and participate in an investment company as long as he/she doesn’t have any criminal record relating to money laundering or tax fraud.

Advantages of SICAV 

  • The advantages of SICAV are the following: 
  • 1% tax rate
  • The supervision is carried out by the CNMV and not by the tax agency 
  • You can invest in any country in the world 
  • Worldwide reputation 

Disadvantages of SICAV

  • Very high social capital equal to 2.4 million Euros 
  • It is mandatory to have at least 100 members 
  • The investments are limited 
  • It is not anonymous; all the members of SICAV can be identified in the CNMV 
  • They are expensive to maintain: accounting, audits, audits of money laundering, filing of annual accounts are obligatory. 
  • Strict control by the CNMV 
  • When SICAV decides to pay dividends each individual who received it will have to declare it the income tax. 

The SICAVs incorporated in Spain and Luxembourg are the most important in the European Union and, due to the high set up and management costs involved, they are usually used by people with high purchasing power who very often choose the option of fraudulent incorporation using the service of third parties, so called mariachis. 

Who are the mariachis? The regulatory authorities have detected the usage of mariachis as shareholders in many SICAVs of Spain and Luxembourg. The mariachis, apart from being known as Mexican ranchers who play traditional music, in financial terms are used as front men or also so called nominees. Normally their names appear in the documents of the investment company SICAV in order to fulfill the set up requirement, which are in this case, 100 members and to pay only 1% of tax rate. The owner of the future SICAV uses the service of 99 mariachis and distributes among them 0.1% of shares while he has the full control of 99.1% shares. This way the owner, having the largest percentage of the shares, retains the right to pay dividends, make investments and increase or decrease the number of mariachis whenever needed.

Obviously the only function of these 99 mariachis is to hide the information about the real owner and beneficiary of SICAV.

Mariachi SICAV

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