SAN FRANCISCO (MarketWatch) -- After some lean times, venture capital is trickling back into Canada from the U.S., and that pace could quicken thanks to a new piece of tax reform proposed in Canada's annual budget.
Over the last two years, U.S. venture capital in Canadian companies has plunged by more than half, to $475.7 million in 2009 from $954 million in 2007, according to data from Dow Jones VentureSource.
While this decline tracked a broader trend in venture capital over the same period, experts say the problem for Canadian firms was exacerbated by tax regulations that punish foreign investors who later want to sell their shares in those companies. For years, U.S. venture firms that wanted to invest in start-ups had to deal with a piece of Canadian tax law called section 116. When foreign investors wanted to sell their shares in a corporation, they had to pay a 25% tax on their gains or fill out cumbersome paperwork to get an exemption. It could often take weeks or months before a firm could get ahold of its funds, say lawyers and venture capitalists.
To read the full, original article click on this link: U.S. venture capital eyes Canada as tax wall falls - MarketWatch
Author: This email address is being protected from spambots. You need JavaScript enabled to view it.
