Designed to encourage individual and corporate investors to invest in a range of private companies.
Investors have been successful in obtaining their tax relief/refunds. The process has been seamless through the use of the SARS e-filing system.
Each investment will be valued separately and assessed on its own merits and financial forecasts. The VCC will charge the following fees for each investment made:
Investments opportunities will be presented by the VCC to the investment committee and board of the various investors for approval.
Investments will be mainly in companies that are currently in operation, and require strategic partnerships.
The sought investments will be existing businesses that currently yields a gross profit return of up to 50% on its turnover, and / or will be of strategic importance.
The back office operations of the companies will be shared to reduce the overhead burden on the investee companies, where possible.
Active funding from commercial banks will also be sought to ensure that the return on the invested entities are maximised.
Capitis Equities Proprietary Limited is incorporated in South Africa, and is a registered Venture Capital Company and is 74% Black Female owned.
Value of Investment
Investment into the non-voting silo shares, that are linked to the underlying qualifying investment projects approved by the investment committee of the VCC.
The investments into Capitis Equities will be for a minimum period of 5 years and investors will be able to invest till the sunset clause of Section 12J is reached in 2021.
Investors that want to exit after 5 years will be able to sell their shares or receive the shares of the underlining investment as a dividend in specie.
Dividend income earned in relation to investments made by the VCC into qualifying companies, will be declared as dividends to the silo shareholders.
There is no forex exposure, as all investments are made into South African resident companies.
A section 12J deduction is created in the relevant years of investment in order to reduce the tax exposure of the investor.
The funds that would have been expensed in the form of cash tax payments to SARS are converted into dividend yielding investments that can be fair valued in the financial records of the company.
The investor will reduce its effective tax rate and it will result in an improvement of the balance sheet of the investor.
Not all investments may yield the required results.
Venture Capital investments are more risky, but does yield a higher return.
More active involvement with the management of the QC are required.
An investment into the Equity Share of the venture capital fund.
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