Private Equity: Country Q&A tool

Search the Country Q&A in the Private Equity Multi-jurisdictional Guide by question and jurisdiction.

Step 1: Check the boxes to select the questions and the jurisdictions for comparison.
Step 2: Click the "submit" button.
Step 3: Scroll down to view answers and check law stated dates for each jurisdiction.

Please note that this project is updated on an ongoing basis, so the Q&A tool will not include all available jurisdictions in this subject area.

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Market overview

1. How do private equity funds typically obtain their funding?
 
2. What are the current major trends in the private equity market?
 
3. What has been the level of private equity activity in recent years?
 

Reform

4. What recent reforms or proposals for reform affect private equity in your jurisdiction?
 

Tax incentive schemes

5. What tax incentive or other schemes exist to encourage investment in unlisted companies? At whom are the schemes directed? What conditions must be met?
 

Fund structuring

6. What legal structure(s) are most commonly used as a vehicle for private equity funds in your jurisdiction?
 
7. Are these structures subject to entity level taxation, tax exempt or tax transparent (flow through structures) for domestic and foreign investors?
 
8. What (if any) structures commonly used for private equity funds in other jurisdictions are regarded in your jurisdiction as being tax inefficient (whether by not being recognised as tax transparent or otherwise)? What alternative structures are typically used in these circumstances?
 

Investment objectives

9. What are the most common investment objectives of private equity funds?
 

Fund regulation and licensing

10. Do a private equity fund's promoter, principals and manager require licences?
 
11. Are private equity funds regulated as investment companies or otherwise and, if so, what are the consequences? Are there any exemptions?
 
12. Are there any restrictions on investors in private equity funds?
 
13. Are there any statutory or other limits on maximum or minimum investment periods, amounts or transfers of investments in private equity funds?
 

Investor protection

14. How is the relationship between the investor and the fund governed? What protections do investors in the fund typically seek?
 

Interests in portfolio companies

15. What forms of equity and debt interest are commonly taken by a private equity fund in a portfolio company? Are there any restrictions on the issue or transfer of shares by law? Do any withholding taxes or capital gains taxes apply?
 

Buyouts

16. Is it common for buyouts of private companies to take place by auction? If so, which legislation and rules apply?
 
17. Are buyouts of listed companies (public to private transactions) common? If so, which legislation and rules apply?
 

Principal documentation

18. What are the principal documents produced in a buyout?
 

Buyer protection

19. What forms of contractual buyer protection do private equity funds commonly request from sellers and/or management? Are these contractual protections different for buyouts of listed companies (public-to-private transactions)?
 
20. What non-contractual duties do the portfolio company managers owe and to whom?
 
21. What terms of employment are typically imposed on management by the private equity investor in an MBO?
 
22. What measures are commonly used to give a private equity fund a level of management control over the activities of the portfolio company? Are such protections more likely to be given in the shareholders' agreement or company governance documents?
 

Debt financing

23. What percentage of finance is typically provided by debt and what form does that debt financing usually take?

Lender protection

24. What forms of protection do debt providers typically use to protect their investments?

Financial assistance

25. Are there rules preventing a company from giving financial assistance for the purpose of assisting a purchase of shares in the company? If so, how does this affect the ability of a target company in a buyout to give security to lenders? Are there exemptions and, if so, which are most commonly used in the context of private equity transactions?

Insolvent liquidation

26. What is the order of priority on insolvent liquidation?

Equity appreciation

27. Can a debt holder achieve equity appreciation through conversion features such as rights, warrants or options?
 

Portfolio company management

28. What management incentives are most commonly used to encourage portfolio company management to produce healthy income returns and facilitate a successful exit from a private equity transaction?
 
29. Are any tax reliefs or incentives available to portfolio company managers investing in their company?
 
30. Are there any restrictions on dividends, interest payments and other payments by a portfolio company to its investors?
 
31. What anti-corruption/anti-bribery protections are typically included in investment documents? What local law penalties apply to fund executives who are directors if the portfolio company or its agents are found guilty under applicable anti-corruption or anti-bribery laws?
 

Exit strategies

32. What forms of exit are typically used to realise a private equity fund's investment in a successful company? What are the relative advantages and disadvantages of each?
 
33. What forms of exit are typically used to end the private equity fund's investment in an unsuccessful/distressed company? What are the relative advantages and disadvantages of each?
 
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