Venture capital fund (FCR) in Spain: what it is and how to set one up

We help you set up and register your venture capital entity under Law 22/2014: the choice of vehicle, an FCR (fondo de capital riesgo) or an SCR; its purpose and investment regime; the mandatory investment ratio; the manager (SGEIC); and registration with the CNMV.

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Mandatory investment ratio: 60%
SCR minimum capital: €1,200,000
Limit per portfolio company: 25%
Key legislation: Law 22/2014

Services

How we handle your venture capital fund

Six blocks to set up and run your venture capital entity under Law 22/2014, from choosing the vehicle and the manager to the investment regime, CNMV registration and marketing.

Vehicle

FCR or SCR: choosing the vehicle

We analyze whether your project fits better in a venture capital fund (FCR, without legal personality) or in a venture capital company (SCR), and we design its structure.

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Law 22/2014FCRSCRECR

Manager

The fund’s manager (SGEIC)

We coordinate the manager that will run the FCR: a management company of closed-ended collective investment entities (SGEIC), or an SGIIC authorized to do so.

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SGEICAuthorizationCNMV

Investments

Investment regime and ratio

We define the investment policy and how you comply with the 60% mandatory investment ratio and the diversification limits.

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60%Diversification

Investors

Marketing to investors

We structure the marketing of the fund to professional investors and, where the legal conditions are met, to non-professional investors.

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ProfessionalRetail

SME

ECR-Pyme: financing for SMEs

We advise on the specific regime for ECR-Pymes, with a reinforced ratio of investment in small and medium-sized enterprises.

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ECR-Pyme70%

Registration

CNMV registration and supervision

We handle entry in the CNMV administrative register and put your reporting and supervisory obligations in order.

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RegistrationCNMV

Types

What forms your ECR can take

Law 22/2014 offers several vehicles depending on the structure and the strategy: a fund or a company, the general or the SME regime, and even other closed-ended collective investment entities.

FCR

Venture capital fund

"A pool of assets without legal personality, divided into units and managed by a management company (SGEIC) that carries out all its activities."

SCR

Venture capital company

"A public limited company (sociedad anónima) with legal personality that can manage itself or entrust its management to an SGEIC, with minimum capital of €1,200,000."

ECR-Pyme

SME venture capital

"A variant (SCR-Pyme or FCR-Pyme) with a reinforced regime of investment in small and medium-sized enterprises and lighter capital requirements."

EICC

Other closed-ended entities

"Closed-ended collective investment entities (FICC or SICC), for strategies that do not fit the specific ECR regime."

Why it matters

Why is setting up the ECR properly key?

Venture capital names and activity are reserved and subject to CNMV registration and supervision. A poorly designed structure can breach the ratio, the limits or the marketing rules.

Reserved names: "FCR", "SCR" or "SGEIC" may only be used by entities set up in accordance with the law and entered in the CNMV register.

The ratio is not optional: ECRs must keep at least 60% of their computable assets in the investments typical of their activity.

There are concentration limits: diversification caps per company and per group shape the fund’s portfolio.

Law 22/2014 Art. 13 60%

Mandatory investment ratio of ECRs on their computable assets.

SCR €1,200,000

Minimum subscribed share capital of an SCR (€900,000 for ECR-Pymes).

Marketing Restricted

Marketing to non-professional investors is subject to specific conditions.

Planning to launch a venture capital fund?

Whether you are starting from scratch or want to reorganize an existing structure, we help you choose the vehicle, line up the manager, comply with the investment regime and register the ECR with the CNMV.

Structure my venture capital fund

Frequently asked questions

Venture capital fund: common questions

What is a venture capital fund (FCR)?

It is a venture capital entity in the form of a pool of assets without legal personality, divided into units and managed by a management company (SGEIC), whose purpose is to invest in unlisted companies under Law 22/2014.

What is the difference between an FCR and an SCR?

The FCR is a fund (a pool of assets without legal personality) managed by an SGEIC. The SCR is a public limited company with legal personality that can manage itself or entrust its management to an SGEIC.

Which law governs venture capital?

Law 22/2014, which regulates ECRs, other closed-ended collective investment entities and SGEICs, and which transposes the EU Alternative Investment Fund Managers Directive (AIFMD).

What can ECRs invest in?

Their main purpose is to take temporary stakes in non-financial, non-real-estate companies that are not listed on a regulated market at the time of investment. They must keep at least 60% of their computable assets in those investments.

What is an ECR-Pyme?

It is an ECR (SCR-Pyme or FCR-Pyme) with a reinforced regime of investment in small and medium-sized enterprises and lighter capital requirements (minimum capital of €900,000 for an SCR-Pyme).

Who manages a venture capital fund?

An SGEIC (management company of closed-ended collective investment entities) or, where applicable, an SGIIC authorized to do so. In an FCR, the manager carries out all of the fund’s activities.

Do you need to register with the CNMV?

Yes. Venture capital names are reserved, and entities must be set up in accordance with the law and entered in the administrative register kept by the CNMV.

Who can invest in an ECR?

Mainly professional investors. Marketing to non-professional investors is subject to conditions (including a minimum investment commitment and a statement by the investor).

Capital, diversification, EuVECA and AIFMD

What minimum capital does an SCR need?

The minimum subscribed share capital of an SCR is €1,200,000 (€900,000 for ECR-Pymes), with at least 25% paid up at incorporation.

How much can it invest in a single company?

As a general rule, an ECR may not invest more than 25% of its computable assets in the same company at the time of investment; for ECR-Pymes, that limit rises to 40%.

What is a European venture capital fund (EuVECA)?

It is the regime under Regulation (EU) 345/2013, which creates an EU passport to market venture capital funds under the name "EuVECA", complementing the Law 22/2014 regime.

Can an FCR grant participating loans?

Yes. Within the mandatory investment ratio, ECRs can grant participating loans and other forms of financing to the companies that fall within their main purpose.

Can it invest in listed companies?

Its main purpose is companies that are not listed when the stake is acquired. The law provides for specific cases and limits for certain investments in listed companies.

How does it relate to the AIFMD?

Law 22/2014 transposes the EU Alternative Investment Fund Managers Directive (AIFMD), so managing ECRs falls within that European framework for alternative funds.

Venture capital vehicles

FCR, SCR, ECR-Pyme and EICC: comparison

Choosing the right vehicle determines the capital, the investment regime and the management. We help you decide and structure the one that best fits your strategy.

What determines the scope of the project

Setting up an ECR depends on the vehicle chosen, the investment strategy and whether management is kept in-house or entrusted to an SGEIC.

Vehicle: FCR, SCR, ECR-Pyme or EICC.
Manager: Your own SGEIC, a third-party one or an authorized SGIIC.
Investments: Policy, ratio and diversification limits.
Investors: Professional or, subject to conditions, non-professional.

How we work on the project

We start from the strategy to choose the vehicle, line up the manager and settle the investment regime and CNMV registration.

Choice and structure of the vehicle (FCR, SCR or SME regime).
Manager, fund rules or bylaws, and investment regime.
CNMV registration and marketing plan.

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Comparison of FCRs, SCRs, ECR-Pymes and other closed-ended collective investment entities
Vehicle	FCR	SCR	ECR-Pyme	EICC
What it is	Venture capital fund	Venture capital company	ECR under the SME regime	Another closed-ended entity
Legal form	No legal personality (pool of assets)	Public limited company	SCR-Pyme or FCR-Pyme	SICC or FICC
Capital / assets	No share capital (managed)	€1,200,000	€900,000 (SCR-Pyme)	Depends on the regime
Mandatory investment ratio	≥ 60%	≥ 60%	≥ 70% in SMEs	No ECR ratio
Who manages	SGEIC	Itself or an SGEIC	SGEIC	SGEIC

Indicative table based on Law 22/2014. The specific regime (capital, ratio, limits and marketing) must be analyzed case by case depending on the vehicle and the strategy.

Practical guide

How to set up a venture capital fund: a practical guide

Launching an ECR is not just a matter of drafting fund rules: you need to choose the vehicle, line up the manager, design an investment regime that meets the ratio and register the entity with the CNMV before marketing it.

Before

Choose the vehicle

The first step is to decide between an FCR and an SCR (and, where relevant, the SME regime), based on the strategy, taxation and the relationship with investors.

During

Structure and manager

The fund rules or bylaws are drafted, the manager (SGEIC) is lined up and the investment regime is designed to meet the ratio and the limits.

After

Registration and marketing

The entity is entered in the CNMV register and marketing to investors is prepared, following the rules that apply to professional and non-professional investors.

Checklist to set up an ECR in 10 steps

Strategy: define the investment thesis, size and horizon of the fund.
Vehicle: choose between an FCR and an SCR (general or SME regime).
Manager: line up your own SGEIC, a third-party one or an authorized SGIIC.
Documentation: draft the fund rules or the bylaws.
Capital: plan the capital or committed assets and how they will be paid in.
Investments: design the policy in line with the 60% ratio.
Limits: comply with diversification per company and per group.
Investors: define the investor profile and the marketing rules.
Registration: register the ECR and the manager with the CNMV.
Obligations: put disclosure, valuation and reporting in place.

If you are launching your fund, see our securities market regulation practice area or our page on venture capital fund manager authorization.

Venture capital in practice

From vehicle to marketing

Setting up an ECR rests on four pieces: choosing the vehicle, lining up the manager, complying with the investment regime, and registering and marketing. Here is a visual overview of how it works in practice.

1) Choose

Choose: FCR or SCR

The starting point is to decide which vehicle and regime (general or SME) best fit the strategy and the investors.

FCR vs SCR
SME regime
Strategy

2) Line up

Line up: the manager

The fund needs a duly authorized manager to run it: an SGEIC, or an SGIIC permitted to do so.

SGEIC
Authorized SGIIC
Authorization

Investment regime and mandatory investment ratio

3) Comply

Comply: the investment regime

The portfolio must meet the 60% mandatory investment ratio and the diversification limits per company and per group.

60% ratio
Diversification
Participating loans

CNMV registration and marketing of the fund

4) Register and market

Register and market

The ECR and its manager are entered in the CNMV register. Marketing targets professional investors and, where the legal conditions are met, non-professional investors.

Tip: defining the investor profile and the minimum commitment from the outset saves you from having to redo the marketing documentation.

Quick decision

Practical map: which vehicle?

Assets managed by a third party

FCR: a fund without legal personality, managed by an SGEIC.

Corporate vehicle

SCR: a public limited company that can manage itself.

SME focus

ECR-Pyme: a reinforced ratio of investment in SMEs.

See securities markets Manager authorization

Venture capital playbook

Setting up the ECR, phase by phase

Phase

What is done

Typical outcome

Vehicle

Choose between an FCR, an SCR or the SME regime depending on the strategy.

Decision on the fund’s structure.

Manager

Line up the SGEIC and its authorization, or an authorized SGIIC.

Manager identified and authorized.

Documentation

Draft the fund rules or bylaws and the investment policy.

Fund rules / bylaws and prospectus.

Registration

Enter the ECR and the manager in the CNMV administrative register.

CNMV registration.

Marketing

Market to investors following the rules that apply to each investor profile.

Marketing documentation.

Common mistakes in venture capital

Spot them before the CNMV does.

Using reserved names without being registered with the CNMV.
Breaching the 60% mandatory investment ratio on computable assets.
Exceeding the diversification limits per company or per group.
Marketing to non-professional investors without meeting the conditions.
Failing to line up the fund’s manager (SGEIC) properly.

Working glossary

Key venture capital concepts

If you are going to set up or invest in a venture capital fund, these terms appear in Law 22/2014 and in your dealings with the CNMV. Understanding them helps you structure the vehicle with sound judgment.

ECRBasics