French “Loi Macron” to allow partnerships
The recently approved law setting in place labor reforms in France, “Loi Macron”, will lead to the creation of a new structure known as “société de libre partenariat”(SLP) in the French asset management industry, targeting mainly foreign institutional investors.
This SLP based on the model of English limited partnerships will join existing vehicles such as Sicav and FCP. As a goal, the law will make it easier to create “significant size vehicles” in which French and foreign institutional investors would jointly invest.
An amendment to article 35 of the Loi Macron explains that French investment funds are facing tough competition from other European investment funds since the AIFM directive has been implemented.
“Investors are turning towards the United Kingdom and Luxembourg using partnerships to create new vehicles and excluding therefore French ones such as FCP,” the legislative text underlined.
The SLP will allow institutional investors to be made aware of and consulted on any step in the fund’s life. SLP based vehicles will be considered as fiscally transparent entities by bilateral treaties, which is not currently the case for the FCP, consequently foreign investors are double taxed when investing in a FCP.
The French government used an exceptional procedure, article 49-3 of the French constitution, in order to pass the bill. The article identifies French government responsibility and allows it to adopt laws by decree without facing a vote of confidence in the French Parliament, except if a majority of French MPs vote in a motion of censorship against the government. In this instance, only 234 MPs voted against a minimum of 289 votes required.