On May 22nd, bill number 20.863 “Reform to incentivize seed capital models and venture capital for entrepreneurship”, was approved by the Legislative Assembly in its second debate. This amendment is presented as a new alternative for the promotion of new enterprises, through the financing of seed capital and risk capital.

Among the proposed modifications is the final paragraph of article 85 of the Securities Market Regulatory Law, which regulates a type of investment fund called venture capital fund. These types of funds have the ability to place their capital in specialized products, either because of the level of risk they represent or because they are not authorized for public offering. The current regulation allows the creation and operation of these funds, which may invest their resources in securities that are not authorized for public offering, provided they do so within the limits and conditions set forth by the General ​​Superintendency of Securities.

The purpose of these type of funds is to attract resources from the public, particularly from professional and institutional investors, and channel them towards investment ​​in securities that are not authorized for public offering. This way, emerging companies would have the necessary resources to carry out their projects. This amendment of article 85 intends to reinforce current regulations, as it sets forth the obligation of the National Council for the Supervision of the Financial System (Conassif), who is responsible for approving the rules that apply to the Costa Rican financial system, to approve the legal framework that will adjust to the special nature of these type of funds.

Without a doubt, these initiatives encourage the creation of new ventures through alternative financing and contribute to a greater dynamism and growth of the economy, which in turn, contributes to the economic reactivation of the country.