ITALY Trends and Developments Contributed by: Paolo Ludovici, Marlinda Gianfrate and Luca Tortorella, Gatti Pavesi Bianchi Ludovici
(b) the capital raised is managed upstream in the interests of – and autonomously from – the investors. For the purpose of calculating the participation amount, holdings without administrative rights are excluded. Additionally, the assessment of whether the 20% threshold has been exceed - ed is temporarily suspended when the foreign investment vehicle is raising additional capital or reducing existing capital, provided that such suspension does not exceed 12 months. The suspension also applies during the initial estab - lishment phase and the liquidation phase, with the latter being aimed at reimbursing shares or units to investors. The asset or investment manager and its independence For the IME to apply, qualification of the foreign investment vehicle is crucial. • The IME regime applies without requiring verification of the asset or investment manag - ers’ actual independence if (i) they manage foreign investment vehicles that fall under the first two items of the previous list and (ii) they obtain adequately documented arm’s length remuneration for the activities carried out in the Italian territory. This is because, based on the features of the foreign investment vehi - cle/structure, it is assumed that the asset or investment managers are already independ - ent from investors, and consequently from the foreign investment vehicle, owing to regulato - ry features. The asset or investment manager is also considered independent in case of delegation or sub-delegation to third parties of certain management functions, provided that the delegated or sub-delegated subjects are resident in a white list jurisdiction, and that the state in which the non-EU collective
investment undertakings is established pro - vides for a delegation legal framework in line with the aforementioned European Directives. • For investment or asset managers of foreign investment vehicles that fall under the third item of the previous list, the IME regime applies if they fulfil the following conditions – ie, investment or asset managers are inde - pendent if: (a) they do not hold roles in the administra- tive and control bodies of the foreign investment vehicle or its direct or indirect subsidiaries – for this purpose, the roles under scrutiny are those covering general duties that go beyond the ordinary opera - tions of the relevant industry, with the exclusion of any appointment to perform specific actions/deeds; and (b) they do not hold a stake in the economic results of the foreign investment vehicle exceeding 25% of its total economic results. For the purposes of (b), the following apples. • The 25% threshold also includes any stake in the economic results of the foreign invest - ment vehicle that accrues to entities belong - ing to the same financial group as the asset or investment manager. All entities linked by a control relationship are considered part of the same group. • The 25% threshold is computed by consider - ing any reduction effected by the ownership chain. The 25% threshold is computed by taking into account the entire share of the economic results of the foreign investment vehicle to which the asset or investment manager is entitled. Therefore, this threshold includes any additional returns that exceed the pro rata profit of the investments and are configured as carried interest, calculated on
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