Investment e. Investments - what is it. Investment risks - what is it and how to deal with them
Where to invest without risk? What does a sample investment agreement for dummies look like? Why read Rich Dad's Guide to Investing?
Greetings to regular readers of our blog and those who went to HeatherBober for the first time! In touch with an investment specialist - Denis Kuderin.
Let's talk about profitable investments. In the new material, we will consider the most important financial issue - where to invest for novice investors.
The article will be useful to anyone who wants to start making money on their own and is interested in current investment areas.
And now - in detail and in detail on each item. Forward!
1. Why is investing profitable?
It is quite possible to receive real money with minimal labor costs. This way of earning is called "passive income" - it is what all entrepreneurs, merchants and moneymakers (people who earn via the Internet) ultimately strive for.
Our website has a detailed and useful article about what it is and how it works.
One of the options for creating passive income is investing in profitable areas. A successful investment of funds guarantees in the future the realization of the main dream of every reasonable person - to spend their time at their own discretion.
Successful investments will save you from having to go to work every day and spend your life on earning a livelihood. Your money will work for you, and you will receive a regular and stable profit from them.
At this point, some readers are sure to chuckle skeptically. Well, skepticism is an understandable quality of the character of the inhabitants of countries with unstable economies and politics.
However, I advise you to cast aside doubts and openly look at new perspectives. People who constantly doubt their abilities will never break out of the vicious circle of lack of money and the grip of hard wage labor.
And now the key question - why do some people get rich, while others remain poor? Do you think it's all about increased efficiency, natural talents and brilliant commercial ideas?
Not at all. It’s just that some people know how to competently manage their own assets, while others don’t. The starting data for all people is approximately the same, but the attitude towards material and spiritual resources is radically different.
Conclusion: assets must be skillfully directed, that is, invested. This applies not only to finances, but to everything else - intellect, energy, free time.
Smart and profitable investments are:
- income that does not depend on labor costs;
- stability and confidence in the future;
- the availability of free time for hobbies, travel and other pleasant things;
- Financial independence.
Having made competent investments, you will forget about the principle of "worked - ate." It’s not that you have to lie on the couch around the clock and spit at the ceiling: you still have to think, calculate and take risks.
However, in any case, such a risk will give a positive result - you will either gain a stable income (first additional, and then, possibly, permanent), or gain invaluable experience for the future.
All the details in the articles - "" and "".
2. Where to invest in order to make a profit - 7 profitable ways to invest for a beginner
All advanced citizens strive to receive passive income as early as possible. Should you wait until retirement to enjoy your life? I'm sure the majority will say no.
So, the main objective investment - financial freedom. How can we achieve this goal with minimal material and moral losses? To do this, you need to invest funds wisely, accurately and efficiently.
We have collected 7 of the most reliable ways to invest money. The risks of such deposits are minimal, but this does not mean that they do not exist at all.
When choosing a direction for investing assets, be guided by the main rule of investing - use only “free” money for your purposes, that is, those that are not intended for food, study, and payment of current bills.
Method 1. Gold
Investments in precious metals (gold, platinum, palladium, silver) bring people profit from the moment commodity-money relations arise.
Valuable metals are not subject to corrosion, and their number on the planet is limited. Therefore, until gold is mined from lead, its price will steadily grow. At the same time, the state of the economy has little effect on the cost of bullion.
Example
Statistics show that over the past 10 years, the price of gold in Russia has increased by about 6 times. Prerequisites that the upward trend in value will change in the near future, the experts do not observe.
There are several options for investing in precious metals:
- purchase of ingots;
- buying coins;
- investing in shares of gold mining enterprises;
- opening a "gold" deposit in a bank.
The first option is the simplest and most reliable, but is designed for a long time. It will not work to get a tangible profit from a deposit for a year or even two.
If you need a quick payback, it is better to open a "gold" deposit. At the same time, you do not need to buy any bullion - the bank simply pays you interest at the current gold rate. This is the safest method, especially if the account is insured along the way.
Method 2. Bank deposits
This is the most conservative, but quite reliable financial instrument. Another advantage of bank deposits is their availability. An adult citizen can put money on a deposit in any locality where there are offices of financial companies.
And with the development of online cabinets, there is no need to visit financial and credit institutions at all! Deposits can be made online without leaving home. The main thing is the presence of the Internet.
Clients receive an almost 100% money-back guarantee with fixed percentages, since according to the current legislation, all deposits of individuals up to 1.4 million are subject to compulsory insurance.
However, this method of investing cannot be called super-profitable. The maximum that citizens can count on ruble deposits is 9-10% per annum. If inflation is taken into account, the profit will be even less.
You can, of course, transfer money into foreign currency and open a deposit in euros or dollars. But interest rate for such deposits will be significantly lower.
Conclusion: banks a good option for long-term and large investments. If profit is needed in a shorter time, it is better to turn to more aggressive ways of investing funds.
Method 3. Real estate
Another popular investment vehicle is real estate. Apartments and houses will always be in demand, because everyone needs a roof over their heads.
Another thing is that the cost and liquidity of housing strongly depend both on the general economic situation in the country and on the situation in the regions.
In short, real estate allows you to receive 2 types of income: from rent and from sale. Renting is a typical example of passive income. The owner receives money for the use of housing without any labor costs - simply on the basis of the rights of the owner.
The sale is profitable if the liquid value of the property is higher than the purchase price. In the current economic situation, the real estate market can hardly be called a profitable financial source, since the supply of apartments exceeds demand even in Moscow, not to mention other cities of the Russian Federation.
And yet, certain categories of investors continue to profit from home purchases/sales.
There are several types of such operations:
- buying an apartment at the construction stage or even laying the foundation and selling the finished object;
- buying a home at the time of falling real estate prices and selling it in a more favorable market period;
- purchase of an apartment in disrepair, repair at own expense and sale at a price that covers the costs.
Real estate experts advise to refrain from investing in housing in times of a clear economic downturn.
Method 4. Mutual funds
Mutual Investment Funds earn by investing funds of shareholders in profitable commercial projects. As a result of financial transactions, participants are paid a percentage of profits.
The founders of the fund also receive their share: as a result of the event, both parties to the agreement are happy to go home. The relationship between investors and managers is governed by contractual terms: they should be carefully studied by the participants before carrying their "hard-earned money" into a mutual fund.
Monetary assets are at the disposal of experts who deal with trust management. Managers have a personal interest in the success of the enterprise, as they work for commissions from profits.
Investments in mutual funds are classified by experts as highly liquid, since investors have the right to sell their share at any time if its current value seems high enough to them.
Mutual Funds Advantages:
- availability;
- control by state structures;
- professional asset management;
- no taxation of funds.
The profitability of the funds is determined based on the results of the established terms: the profit received is distributed among the parties to the agreement according to the contributed shares.
Sometimes the net profit ratio (in scientific terms it is called ROI) reaches 50%, which is about 5 times higher than the profitability of bank deposits. On average, the mentioned figure is 25-30%.
Method 5. Securities
Investing in stocks, bonds, and other types of securities requires some preparation in the financial and economic fields. Picking stocks at random (according to the “liked the name of the company” principle) and investing all your money in them is not the smartest option for people who are counting on long-term profits.
To earn income from stocks, you need to either understand the economy or be an experienced stock player. There is a third way - to entrust the management of your capital to professionals (brokers).
Stocks do not guarantee a mandatory profit, but the income in case of success can be very high. There is no profit limit here: sometimes ROI is 100% and even 1000% over several years.
Method 6. Startups
Such projects often bring good dividends, especially if you choose an innovative project wisely.
True, out of 3-5 startups, only one turns out to be really profitable, the rest either do not pay off at all, or require additional financial investments.
Our magazine already had material about. In short, these are innovative commercial or social projects, promising to become highly profitable in the future.
It is easy to become a co-owner of a promising project today - there are licensed platforms on the network that allow startup owners to present their products and attract investors.
To get started, you can make a minimum deposit of several thousand rubles to check how the investment mechanism works. The choice of directions in this area is almost unlimited - finance projects in your hometown, in Moscow, in Europe, in the Internet space.
Method 7. Forex
The word "Forex" has been heard, perhaps, by every civilized person. But not everyone can say what kind of animal it is. In simple terms, Forex is an international currency exchange market at free prices.
Let's take a look at all these methods at a glance:
| № | Way of investing | Recommended investment terms | Advantages |
| 1 | Gold | Long term (3-10 years) | Stable price growth |
| 2 | Real estate | Long term (2-5 years) | High liquidity |
| 3 | Bank deposits | From 12 months | Reliability |
| 4 | mutual funds | From 3 months | Professional account management |
| 5 | Stock | Not limited | Profit is not limited |
| 6 | Startups | From 6 months | Large selection of investment properties |
| 7 | Forex | Not regulated | Quick refund option |
Read more about forex investing in the publication "".
3. How to draw up and conclude an investment agreement - a sample document
An investment agreement is an official document that must be drawn up in accordance with the established form.
Paper involves the placement of funds individual(or legal entity) in opening a business, purchasing equipment, construction, manufacturing and other areas that promise to generate income in the future.
The finances invested in the project can be own, state, borrowed, owned by mutual funds. After a predetermined period, depositors receive a refund with interest or benefit in another form.
Those who wish can familiarize themselves with all the details.
Relations under an investment agreement are usually long-term, so the investor, before investing, needs to carefully study the project, and then monitor the progress of the existing enterprise.
4. Investment risks - what is it and how to deal with them
The larger the amount, the more prospects the investor has, but at the same time financial risks increase. Investment directions completely without risk do not exist: even a bank with your deposit can burst. But it is up to the investor to minimize the risks.
There are several rules developed by experts to help avoid failures in investment projects:
- Diversification of investments - do not invest all the money in one project, divide it into several areas.
- Invest only "free" money - those that are not intended for life.
- Create a financial "airbag" of safety - set aside an amount that, in which case, will provide you with a comfortable existence for 3-6 months.
- Do not make investment decisions based on emotions and premonitions - only a rigorous mathematical calculation will help to calculate possible risks and profits.
- As soon as possible, withdraw the body of the deposit from the account.
- Apply professional tools– the network has certified platforms for working with finances that will increase your level of security.
Always stick to the plan, involve professionals and do not hesitate to consult with experienced investors.
Now a few tips for newbies making deposits for the first time in their lives.
To start investing, you will need initial capital. At the debut stage, you should not operate with impressive amounts: start small and gradually move towards increasing deposits.
I repeat: invest only "working capital" - the amount not intended to pay for an apartment, food and other vital things.
Tip 2. Set an investment goal
It would seem that everything is simple here, but in practice, many beginners cannot correctly formulate their long-term goals. If you do not have a specific plan of action, you run the risk of stopping development at a certain point.
The right approach is when the investor clearly knows what he wants - for example, to earn 500 thousand or 1 million over the next year. Concreteness disciplines and does not let you relax.
Tip 3. Look for yourself in different areas of investment
Everyone understands certain areas better than others. Some prefer working with deposits, others prefer startups, and others prefer trading on the stock exchange.
Analyze your own abilities and skillfully use your natural passion.
Tip 4: Control your associated costs
When people say they don't have money, it doesn't mean they don't have any. This means that there is not enough finance for something specific, in our case, for investments.
At the same time, few people realize that competent control of their own expenses can free up a substantial amount of funds. By denying yourself some unnecessary expenses and taking them under control, you can save an impressive amount in a year.
Tip 5: Read The Rich Dad's Guide to Investing
This book by well-known businessman, investor and writer Robert Kiyosaki explains in detail the mechanisms for developing your own investment business from the zero phase. The author, using illustrative examples, tells what and how to do with personal finances.
The material is presented in the form of specific lessons of an experienced investor and will be useful for both beginners and already established businessmen.
There is a separate publication about his books in our magazine.
6. Investing in self-education is the best investment for beginners
Investing in your own education and development is the most promising. It is these investments that pay off in the future with maximum odds net profit. Provided, of course, that you will apply the acquired knowledge in practice.
In essence, this is the starting point for your success as an investor. Never spare money and time for books, seminars, useful trainings, lessons, courses on competent investment. The acquired knowledge will become your compass in the endless and dangerous ocean of business.
Your skills and abilities are capital that cannot be lost. It is not threatened by crises and defaults: moreover, it only grows over time. At the same time, without self-education and constant learning, building a stable investment business is doomed to failure.
To formalize relations with an investor, it is best to use the legal form of an LLC (limited liability company). Individual entrepreneurs are avoided because of the risks, because by law an individual entrepreneur is liable with all his property, except for a single apartment. JSCs (joint stock companies) are not popular among startups - opening them is expensive, quite difficult and time consuming.
In short, an investor can become a member of your LLC and invest in capital or lend money. Let's take a closer look at the mechanics of these paths.
1. The investor becomes a member of the LLC
This model is known in the business environment as "investor entry". Regardless of whether the investor enters an existing LLC or creates a new one, the procedure is essentially the same. The volume of investments proportional to the nominal share in the authorized capital is agreed upon. Then the investor pays the agreed amount, after which the share in the company passes to him, and you can start making changes to the constituent documents.
Recently, the practice of concluding investment agreements between a startup and an investor has become more frequent. The main points of the investment agreement: financing scheme, management structure (does the investor have the right to interfere in operational management or not), the procedure for the participants to withdraw from the project, ways to resolve conflicts. On the one hand, the investment agreement establishes key agreements, on the other hand, it may contain very specific details (for example, it is possible to determine the court in which the conflict will be considered if it arises).
Entering an investor into an already existing startup LLC
In the case when a startup is already operating as a registered legal entity, the investor sends a formal application to the CEO for admission to the company and making a contribution to the authorized capital of the company. However, even if you have an operating LLC, some investment funds they may also be required to register another new LLC with their participation - this is normal.
The investor statement states:
- the amount of monetary funds contributed or the composition of other property (the value of the non-monetary contribution is determined on the basis of the report of an independent appraiser);
- the planned term for making a contribution (it is counted from the moment the decision to accept a new participant by the general meeting of participants in the LLC is made and cannot exceed 6 months);
- the size of the expected share as a result of admission to the LLC participants (as a percentage or as a fraction);
- other conditions for making a contribution and joining the company that do not contradict the law and the charter of the company.
The decision of the general meeting of participants in the company to accept a new participant and increase the authorized capital at the expense of his contribution is taken unanimously and must fully comply with the application of the investor. The fact of the decision and the composition of the participants present must be confirmed by notarization. At the time of the decision, the current charter of the LLC should not contain prohibitions on increasing the authorized capital by accepting contributions from third parties or other similar restrictions. If your charter has such a prohibition, you must first amend it.
The process ends with the payment of the share by the investor and the registration of the changes in the tax.
Creation of a new joint venture with the participation of an investor
If your startup does not yet have a legal entity, creating a joint venture with the participation of an investor looks like the most logical investment option.
The contribution of the entrepreneur himself, as a rule, will be intangible assets (rights to use the results of intellectual activity transferred under a license agreement), technological equipment or real estate. If you have any of these, then first evaluate your property with an independent appraiser.
The relationship between the co-founders of the new LLC should be described in as much detail as possible in the charter, including the rules for the distribution of votes on general meeting participants, the principles of participation of partners in the profits of the company, the procedure for the withdrawal of participants from the company and the resolution of conflicts, as well as many other essential conditions. Few people remember the charter while things are going well, but inattention to detail and a formal approach can significantly complicate and shorten the life of your business, if not become a breeding ground for abuse by unscrupulous investors.
2. The investor does not become a member of the LLC
Not every entrepreneur is ready to share the management of his project. In this case, the solution may be debt financing from an investor who agrees not to interfere in the startup's operations.
Providing investments in the form of a loan
An investor can provide an interest-bearing or interest-free loan - it all depends on your agreements. The amount is returned, as a rule, in a lump sum payment after a long period of time (2-3 years).
The provision of investments depends on the risks of the project and the requirements of the investor. In practice, the most commonly used security for repayment of a loan is a pledge of intellectual property (for example, programs, inventions, know-how) and shares in an LLC.
In order for the money to be spent efficiently, the loan agreement may provide for a condition for the borrower to use the funds received only for certain purposes (target loan). This condition also implies the control of the investor over the spending of funds. If the money is spent inappropriately, the investor may demand early repayment of the loan with interest. Forms of control and the procedure for repayment are agreed in the loan agreement.
Combined investment scheme
Its essence is that the investor provides a loan for a share in the company in the future. This modern way investment that equally takes into account the interests of the startup and the investor.
The flexibility of this scheme lies in the fact that the preliminary contract for the sale of a share in an LLC is subject to execution only upon the occurrence of the so-called. suspensive condition- usually after the start-up pays off. The terms of the loan agreement will be similar to those discussed above.
Possible options for the investor to exit the startup - at the actual cost of the share or through the return of the loan (interest on the loan) - are fixed in the charter during the execution of the contract.
This scheme is similar to convertible notes popular in Silicon Valley, through which a startup receives financing with the right of an investor to convert debt into shares of the company at a risk discount in the future. In this case, the size of the investor's shareholding will be proportional to the ratio of the amount of his loan to investments in the next round of investment.
Combined scheme in more takes into account Russian realities (for example, the peculiarities of an LLC, where there are shares, but no shares), however, it requires an assessment of the company's value in a preliminary agreement long before the events occur.
What is important to remember when entering into a relationship with an investor?
Regardless of whether an investor insists on a particular form of investment or not, be careful when choosing it, especially if you are dealing with a non-professional investor who invests occasionally or for the first time.
Remember that when a team of professional lawyers act on the side of the investor, who have eaten a dog on formalizing relations with startups, they work in the interests of the investor. Therefore, at a minimum, you should insure yourself and attract an independent legal expertise that will check all documents for compliance with your interests.
We hope that this information will help you understand the complex and important issue. We, for our part, will be happy to help if you decide that you need a live consultation.
- Tilda
- Consultant Plus
- Slack
- Trello
Lawyer-entrepreneur, founder of the company NewLawyers. He has a higher legal education, is a candidate of legal sciences. Worked for the company for over 10 years Ernst&Young, where he was involved in supporting M&A transactions, restructuring and preparing the business for the arrival of investors, representing the interests of investors and startups during negotiations. Launched the service together with partners NewLawyers.Lite, which helps small and medium-sized businesses save on legal services while maintaining a high level of business legal protection.
What is important for any investor
There is no single algorithm that guides all investors when making a decision to invest in a particular project. To a large extent, it depends on what kind of investor it is and what kind of strategy it has.
However, there are a number of fairly general requirements that any investor is guided by. Among other things, he needs to understand what exactly he invests in, and for this he needs to know exactly:
- what is your product and its audience;
- what is your business like;
- what are the financial flows in this business;
- how this business is organized;
- what are its main risks;
- what are its prospects – market and financial.
due diligence
To get answers to all these questions, the investor conducts the so-called due diligence. In an ideal world, due diligence is a fairly detailed study that reflects key information about the potential investment object: from key financial indicators to information about who owns and manages the business and how.
The author had to work on projects where due diligence reports reached several hundred pages in small print. However, in relation to startups, due diligence has its own specifics.
So, a very common feature of startups is their lack of full reporting. As a result, financial specialists will not be able to accurately calculate certain indicators that may be necessary for making an investment decision. We are talking, for example, about indicators such as EBITDA, NPV, ROI, etc.
In this situation, consultants are not always eager to verify the acquired business. Quite often, they try, on the basis of disparate information received from the startup's management, to compile quasi-reporting, which will allow at least approximately estimating the values of these indicators.
Another feature of startups is the relatively small amount of money that is required from the investor. In this case, doing a detailed analysis (and hiring expensive lawyers for this) does not make much sense. Therefore, quite often due diligence is not carried out at all or is of a very limited nature. In the second case, lawyers tend to focus on the most key issues: who owns the business and key assets, whether they have legal defects, etc.
Structuring
One of the most common problems identified during startup due diligence is the opaque and risky legal structure of the business in which it is planned to invest.
Yes, a business registered in the IP format using the patent taxation system is effective from a tax point of view. However, you cannot buy a share in an IP, and it is extremely problematic to protect the interests of an investor with such a structure. That is why one of the first tasks of owners planning to attract an external investor is the correct structuring of their business, i.e. its preparation for the entrance of the investor.
When structuring, there is a legal separation of the business. To a separate legal entity (or legal entities) key assets and contracts are transferred, trademarks are registered, personnel are transferred, etc. At the same time, assets and operations that are not directly related to it (for example, personal assets of owners) are removed from the business perimeter.
Agreement of intent
An agreement of intent allows the parties to agree on their intentions and requirements for their future transaction at an earlier stage of negotiations, as well as in the general view agree on its key parameters, conditions and stages.
In practice, an agreement of intent is used when the upcoming deal is not so simple in terms of its implementation. So, for example, the need for such an agreement may arise if the business needs restructuring or the investor plans to conduct due diligence (albeit limited).
The peculiarity of such an agreement is that, as a rule, it is not binding. Nevertheless, a certain obligation of a psychological nature is nevertheless created in this case. It may be more difficult for a participant in a future transaction to withdraw from it without any adequate explanation if he has already, in general, agreed to it.
Negotiation
When signing an agreement of intent, be careful and careful. A well-written agreement can be a good help in future negotiations on the parameters of a deal with an investor. At the same time, if you have already agreed to certain conditions in the letter of intent, then it can be problematic to justify a significant change in the negotiating position.
A well-designed agreement of intent can significantly strengthen your positions, and a document that you did not delve into properly can significantly weaken them
There is one more important point which must be taken into account when entering into negotiations with an investor. The fact is that Russian law requires that the parties must participate in negotiations in good faith. This means a ban on:
entry into negotiations or their continuation in the absence of intention to reach an agreement with the other party;
provision of incomplete or inaccurate information, including silence about the circumstances that must be brought to the attention of the other party;
Sudden and unjustified termination of negotiations for the conclusion of a treaty in circumstances in which the other party to the negotiations could not reasonably have expected it.
In case of violation of these rules, the investor gets the opportunity to recover from the owners and / or management of the startup the losses caused to him
Investment formats
There are many ways in which an investor can invest in a startup.
Perhaps the most basic and most obvious way is is a contribution to the authorized capital of a legal entity. When using this method, the most important task is solved - investments go directly to the business. In this case, the investor receives a legally registered share, which provides him required level comfort.
This method is also of interest for tax reasons. So, with the subsequent sale of a share, the investor will be able to reduce his income by the amount of his contribution. As a result, the amount of tax payable can be significantly reduced.
However, the contribution to the authorized capital has its drawbacks. For example, in case of bankruptcy of a company, an investor will be able to get his money back only after settlements with all creditors, which is quite unlikely. Also, when using this option, it is impossible to quickly share income with the investor. This becomes possible when the authorized capital is reduced, which is a relatively time-consuming procedure. In addition, dividends can be distributed, but for this, at least, there must be a profit - so that there is something to distribute.
Works in the opposite way Alternative option funding - through a loan. The investor does not receive a share in the business, however, he can quickly extract his part of the income from it, regardless of the profitability of the startup. In addition, in the event of a startup bankruptcy, an investor falls into the so-called third line of creditors, which somewhat increases his chances of a return on investment.
An intermediate option could be combined financing when the investor's funds are provided partly in the form of a contribution to the authorized capital, and partly in the form of a loan. This makes it possible to ensure a reasonable balance of his interests: on the one hand, the investor legally secures his participation in the business, and on the other hand, he receives the necessary flexibility in terms of receiving his share in the profits and protecting his interests in bankruptcy.
Another financing option that combines a contribution to the authorized capital and a loan is the so-called mezzanine financing. In this case, the investor provides the startup with borrowed funds, and also receives an option (right) to buy out a certain share in the business. As a result, with the successful work of a startup, it gets the opportunity to buy out part of the business at a low price. If the startup does not live up to expectations, then the investor retains the right to return his investment made in the form of a loan.
Life after
The appearance of an external investor in the company is not only money for business development, but also new obligations for the owners and management of a startup. The investor, quite obviously, wants to control how his money is spent and, ideally, to influence key management decisions.
Depending on which investment option is agreed between the owners and the investor, these tasks are resolved in different ways.
If we are talking about a contribution to the authorized capital, then changes are made to the charter of a legal entity, which fixes certain powers of a minority participant (investor). If we are talking about a loan, then control powers are assigned to the investor, as the lender.
Recently, agreements on the exercise of the rights of a participant (for an LLC) or shareholder agreements (for a JSC) have become increasingly popular. These agreements make it possible to more flexibly set up management in the company, as well as provide for their own rules / conditions for the alienation of shares / shares of participants to third parties.
These contracts came to us from English law and were quite actively used in transactions of medium and large size. After their appearance in Russian law, they became available to small companies as well.
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INVESTMENT AND CONSTRUCTION ACTIVITIES. SHARE IN CONSTRUCTION
INVESTING TO CREATE OWN REAL ESTATE MONEY UNDER INVESTMENT AGREEMENT (TARGETS FINANCING)
Capital construction involves investment. If the construction is not carried out on its own and the investor only allocates cash for its implementation, then there are such subjects of investment activity as the customer (customer-developer), contractor (general contractor). An investment agreement is concluded between the investor and the customer, according to which the investor provides financial support for the construction process, and the customer performs organizational and technical functions. We will talk about the intricacies of targeted investment under construction contracts in this article.
Subjects of investment activity on the basis of paragraph 1 of Article 4 federal law dated February 25, 1999 No. 39-FZ "On investment activities in Russian Federation made in the form of capital investments" (hereinafter - Law No. 39-FZ) are investors, customers, contractors, users of capital investment objects and other persons.
Investors are understood as persons making capital investments in accordance with the legislation of the Russian Federation, and investors can be individuals and legal entities that do not have the status of a legal entity, associations of legal entities created on the basis of a joint activity agreement, state bodies, local governments, as well as foreign business entities (paragraph 2 of Article 4 of Law No. 39-FZ).
Customers within the framework of capital construction can also be individuals and legal entities who, in accordance with the contract, are entrusted with the implementation of the investment project by the investor. Investors themselves can also be customers. A customer who does not combine the functions of an investor is vested with the rights to own, use and dispose of capital investments for the period and within the limits of authority established by the agreement (paragraph 3 of Article 4 of Law No. 39-FZ).
An investment agreement is concluded between the investor and the customer. The complexity of the legal regulation of relations between the subjects of investment activity lies in the fact that the investment agreement is not singled out by the civil legislation of the Russian Federation as a separate type of agreement. The theory of civil law classifies investment contracts as a type of mixed contracts, which means that the rules of civil law apply to them only to the extent that these relations are enshrined in a particular investment agreement.
The lack of legal regulation of investment agreements causes a variety of forms of relationships between the subjects of investment activity. Thus, an investment agreement may provide that the investor pays for the customer’s services and at the same time pays for construction works and services of contractors and other organizations; or the investment agreement may provide for the transfer of the necessary funds to the customer to ensure the construction process.
In the second case, the concept of targeted financing in construction arises. Accounting for funds financed for construction will depend on the purpose for which the property is being built. At the same time, it should be taken into account that, in accordance with paragraph 2 of Article 4 of Law No. 39-FZ, an organization has the right to invest both its own and borrowed funds.
When building real estate, investors often resort to borrowing money. Accounting for expenses on servicing loans and borrowings is regulated by the Accounting Regulation "Accounting for expenses on loans and credits" (PBU 15/2008), approved by Order of the Ministry of Finance of the Russian Federation dated 06.10.2008 No. 107n (hereinafter - PBU 15/2008). At the same time, the procedure for accounting for these expenses will depend on what is being built by the investor - an object recognized as an investment asset or an object not recognized as such. If the object under construction is recognized as an investment asset, then the interest on loans and credits will increase the initial cost of the property.
Recall that, according to paragraph 7 of PBU 15/2008, an investment asset is understood as an object of property, the preparation of which for the intended use requires a long time and significant costs for the acquisition, construction and (or) manufacture. Investment assets include, in particular, construction in progress, which will subsequently be accepted for accounting by the borrower and (or) the customer (investor) as fixed assets or other non-current assets.
In other words, if the construction is carried out for the purpose of further resale of the object, then this object will not be recognized as an investment asset, since after the completion of construction it will be taken into account as finished products on account 43 "Finished products", and not on accounts 01 "Fixed assets " or 03 "Profitable investments in material assets" as an object of fixed assets.
Note!
The initial cost of an object recognized as an investment asset includes only interest for the use of borrowed funds. Additional expenses on loans and borrowings do not increase its initial cost and are taken into account as other expenses in the investor's accounting. Additional expenses are the amounts paid for information and consulting services, for the examination of a loan agreement or credit agreement, other expenses directly related to obtaining loans (credits).
It should be noted that in tax accounting, interest on loans and borrowings is not subject to inclusion in the initial cost of fixed assets.
Rules for the formation of the initial cost of fixed assets for the purposes tax accounting established by the provisions of Article 257 of the Tax Code of the Russian Federation. Interest on debt obligations of a taxpayer (organization-investor) is included in non-operating expenses on the basis of paragraph 2 of Article 265 of the Tax Code of the Russian Federation. A similar position is given in Letter No. 03-03-06/1/37 of February 3, 2009 of the Ministry of Finance of the Russian Federation.
In the investor's accounting, the transfer of funds to the customer for the construction of the facility is reflected in the accounting entry:
Debit 76 "Settlements with various debtors and creditors" Credit 51 "Settlement accounts".
The customer accepts the specified funds and takes them into account as part of targeted financing with accounting entries:
Debit 51 "Settlement accounts" Credit 76 "Settlements with various debtors and creditors";
Debit 76 "Settlements with various debtors and creditors" Credit 86 "Target financing".
Targeted financing can be directly reflected by correspondence on the debit of account 51 "Settlement accounts" and the credit of account 86 "Target financing", bypassing account 76 "Settlements with various debtors and creditors". Meanwhile, reflecting the investor's debt under the investment agreement by the amount of target financing allows the customer to better control the financing process and is advisable for management accounting.
In the tax accounting of the customer, the funds received from the investor are recognized as targeted and are not subject to corporate income tax in accordance with the provisions of Article 251 of the Tax Code of the Russian Federation, according to subparagraph 14 of paragraph 1 of which, for the purposes of taxation of profits, income in the form of property received by the taxpayer within the framework of targeted funding. At the same time, special-purpose financing means property received by the taxpayer and used by him for the purpose determined by the organization (individual) - the source of special-purpose financing.
At the same time, the customer should organize separate accounting for targeted financing and other income. In the absence of separate accounting, special-purpose financing funds are subject to inclusion in the tax base from the date of their actual receipt and are reflected in non-operating income (paragraph 14 of Article 250 of the Tax Code of the Russian Federation). The date of recognition of income in the form of property (including cash) specified in paragraph 14 of Article 250 of the Tax Code of the Russian Federation, when applying the accrual method, is the date when the recipient of funds actually used them for other than their intended purpose or violated the conditions under which they were provided ( subparagraph 9 of paragraph 4 of Article 271 of the Tax Code of the Russian Federation).
At the same time, according to the Letter of the Federal Tax Service of the Russian Federation for the city of Moscow of December 11, 2006 No. 22-19-I / 0564, the tax authorities indicate that in order to ensure separate accounting for targeted funds, it is necessary to prescribe in the investment agreement not only the amount of investments, but also the amounts and types of construction costs, as well as the timing of the implementation of costs.
Please note that if the target funds are not used for their intended purpose in full, but only partially, then the tax authorities insist on including the entire amount of target financing in the tax base. According to the author, the position of the tax authorities is unlawful, since the tax legislation does not require the inclusion of the entire amount of targeted financing in the tax base. Therefore, if an organization is faced with the need to use target funds for other purposes, it should organize separate accounting for target funds used for their intended purpose and target funds used for other purposes. In this case, only part of targeted financing can be included in the tax base for income tax.
The customer's expenses incurred at the expense of special-purpose financing are not taken into account for the purposes of taxation of his profits. This is indicated by the provisions of Article 270 of the Tax Code of the Russian Federation.
In the accounting of the investor organization, funds sent as target financing to the customer will not be subject to VAT. Recall that subparagraph 4 of paragraph 3 of Article 39 of the Tax Code of the Russian Federation establishes that the transfer of property, if such a transfer is of an investment nature, is not recognized as the sale of goods, works or services.
For the purposes of tax accounting, the transfer of funds from an investor to a customer is equated to investment contributions and is not subject to VAT on the basis of paragraph 2 of Article 146 of the Tax Code of the Russian Federation.
It should be borne in mind that the concept of investments and investment activities is given in Law No. 39-FZ. Thus, investments include cash, securities, other property, including property rights, other rights having a monetary value, invested in objects of entrepreneurial and (or) other activities in order to make a profit and (or) achieve another beneficial effect. At the same time, capital investments are understood as investments in fixed assets.
The fact that the investor's funds transferred to the customer under the investment agreement are not subject to VAT is also evidenced by judicial practice. In particular, such a position of the courts is contained in the Determination of the Supreme Arbitration Court of the Russian Federation of May 23, 2008 No. 4609/08, the Resolution of the FAS of the East Siberian District of December 14, 2007 in case No. A33-5631 / 07-F02-9138 / 07.
At the expense of the investor's targeted funds, the customer attracts contractors for construction, and also purchases all the necessary services and materials to ensure construction process. In this case, the amounts of input VAT presented to the customer by third parties are subject to transfer to the investor. The customer draws up a consolidated invoice, in which he indicates the purchased works and services with the allocated amounts of input tax as separate items. The specified document is drawn up in two copies, one copy is transferred to the investor, the other remains with the customer. Copies of invoices and settlement and payment documents are attached to the consolidated invoice, indicating that the customer has paid for work and services to third parties.
Do not forget that the consolidated invoice indicates only the items of purchased goods, works and services. A separate invoice is issued for the amount of the customer's remuneration.
Note!
The investor's right to a deduction does not depend on whether the investor has turnovers on the credit of account 68 "Calculations on taxes and fees" sub-account "Calculations on VAT" in a particular tax period. A similar position is confirmed by the Decree of the Federal Antimonopoly Service of the Moscow District dated March 17, 2009 in case No. KA-A41 / 1603-09.
It should also be noted that the investor has the right to deduct the amount of input VAT even before the completion of the construction of the facility. To do this, it is necessary that the costs incurred be taken into account on account 08 "Investments in non-current assets". The Letter of the Ministry of Finance of the Russian Federation No. 03-07-10/06 dated February 19, 2007 states that if the construction contract concluded between the customer and the contractor and the contract between the customer and the investor provide for the delivery of the results of the stages of construction of the facility performed by the contractor, then drawing up invoices by the customer is possible in the manner similar to the above, within five days after the transfer to the balance sheet of the investor of these results on the completed stages of the construction of the facility.
However, the tax authorities may not agree with this position. Therefore, the taxpayer will have to defend his case in court. An example of defending the position of a taxpayer is the Decree of the Federal Antimonopoly Service of the Moscow District dated April 8, 2009 in case No. KA-A40/2579-09.
When drawing up an investment agreement and determining the amount of target financing, it is important for the investor to determine the procedure for settlements directly with the customer himself. According to the author, the amount of remuneration of the customer in the contract should be allocated separately. This will avoid difficulties and problems in the calculation of VAT by the customer. Then the remuneration of the customer, transferred simultaneously with the target financing for construction, will be a prepayment for the customer's services. From the value of the specified advance payment, the customer should calculate VAT and issue an invoice to the investor.
If the customer's remuneration is not specified in the investment agreement, this does not mean that the customer does not have an obligation to calculate VAT on the amount of his remuneration. In this case, according to experts, the customer should determine in its accounting policy for tax purposes the procedure for calculating VAT payable to the budget with subsequent adjustment of the tax liability.
In practice, the amount of targeted funding may not be fully spent, therefore, so-called savings may occur. The investment agreement should provide for the procedure for disposing of these funds. If the indicated savings are a reward or part of the customer’s remuneration, then the customer will have to pay VAT on its amount. If the contract stipulates that the balance of targeted financing is returned to the investor, then at the end of the construction process, the customer should transfer the remaining funds to the account of the investor organization.
Bazarova A.S.
It is great when an entrepreneur has enough funds necessary to conduct business. But this is not always the case. In 9 cases out of 10, an entrepreneur is forced to look for third-party resources to invest in his business. To do this, you should carefully consider and plan possible ways to search for financial injections and protect yourself as much as possible.
Consider options for raising additional funds. Let's analyze who can act as an investor. We will try to provide practical assistance to an entrepreneur in need of financing by compiling step by step guide looking for an investor.
The purpose of attracting an investor
Investment is a third party injection financial resources in a certain project, program, undertaking on a long-term basis, calculated on a delayed profit.
Why would entrepreneurs need outside funds, because then they will have to share profits? The purpose for which a businessman may invite others to contribute financially to his “brainchild” may be one of the following:
- growth and development of current activities;
- attraction of additional or missing resources;
- increase in fixed assets;
- development of technologies;
- entry into new areas of business.
Types of investment injections
According to the degree of participation in the project, investments can be:
- portfolio- funds are invested in a group of projects, and in several business areas or in different organizations at once;
- real- capital is intended to finance a specific project in order to obtain real profit.
According to the features of the investor, investments can be divided into:
- state;
- private;
- foreign.
According to the nuances of the financed project, investments are allocated:
- intellectual;
- production.
To the extent possible for an investor to control their investments:
- controlled;
- uncontrolled.
Options for attracting investments at different stages of the project
To get money for his project, he must show his worth. And in order for the project to work, money is needed. How to get out of this vicious circle? For each stage of the project operation, it will be more expedient to attract investments from different sources.
- Planning stage. If an entrepreneur has an interesting business idea, perhaps a model or sample of finished products, but management and processes have not yet begun to improve, then it makes sense to ask for funds from such sponsors:
- inner circle (relatives, friends, like-minded people);
- public investment (there are special programs to support some innovations);
- venture investments (they are designed just for risky startups).
- Start of the project. The business plan has been developed, the team is being formed, the process has started, but there is no profit yet. In this case, money for further promotion can be given by:
- venture funds;
- private investors;
- foreign sponsors.
- Good start. Organization took certain place on the market, the project began to make a profit, albeit not too much so far. To expand activities, funds can be provided by:
- direct investment funds;
- venture investors;
- banks (at this stage of the project, when the first results are already visible, credit organizations can already risk their own funds).
- Growth and development. When the profit is already obvious and stable, it will not be difficult to find investors. Such a company would be happy to invest in:
- venture funds;
- foreign capitalists;
- state funds;
- banking institutions.
- Well done business. When the growth and prospects of the business are not in doubt, the company occupies one of the leading places in the market, investors may even “fight” for the right to invest in a clearly profitable company. In this case, you can no longer just accept sponsorship investments, but publicly sell your shares. In addition, you can take as investors:
- private entrepreneurs;
- banks;
- Pension Fund.
Main sources of investment
In addition to private investments, an entrepreneur can be invested by banks or the state.
Public investment"sharpened" for specific programs. Their rules are very strict and not subject to adjustment. Most of these programs are designed for manufacturing companies Therefore, not every entrepreneur can take advantage of state support. As a rule, public money is intended for the purchase of equipment, materials, and transportation costs. The entrepreneur will need to look for funds for wages, advertising and other expenses on his own.
Bank investments, i.e. business loans will not be given to anyone. In order to borrow money for a specific business, it must have already been started or the borrower must have another stable income. This is due to the need to pay bank interest.
Private investment- the most promising sponsors for a novice entrepreneur. Among the numerous types of companies and funds that are ready to provide financial assistance at any stage of the project, any businessman can find the right one for him.
One of the forms of investment convenient for beginner businessmen are business incubators– organizations that specialize in financing and supporting entrepreneurs at the beginning of their business journey.
Within the framework of the "incubator", a businessman can rent premises on preferential terms, he will be helped with accounting and legal support, and will be provided with consulting services.
Finding an Investor: A Step-by-Step Guide
If an entrepreneur has set himself the goal of attracting investment capital, a difficult path begins before him, which he will have to go through step by step.
- Choosing a reliable investor. The investor will become a strategic partner, so you need to approach his choice very responsibly. To do this, you need to clearly understand what type of money holder may be interested in your project. The choice depends on:
- stages of the project;
- own financial opportunities and resources;
- the presence of additional investment-attractive factors (unique assets, liquid collateral, an original and viable business idea, etc.).
- Proposal formation. Having outlined the circle of prospective investors, you need to convey to them the information that they can profitably invest their funds in your project. To do this, you need to correctly “pack” information about the project:
- highlight the benefits
- justify profitability;
- provide a realistic business plan;
- clarify the circle of future consumers, that is, the potential sales market.
- Drawing up an investment summary. All the attractiveness of the project for investors should be presented as concisely and concisely as possible. A correctly drafted investment proposal - "advertising" of your project - can be more effective than a personal meeting with future investors. If a businessman does not feel able to do this, one of the consulting companies can be entrusted with drafting a proposal.
- Distribution of investment proposals and resumes. The optimal number of potential "sponsors" to whom an offer should be made should be determined. One or two appeals may not produce results, and a large number of recipients will cast doubt on the seriousness of your intentions. Practice shows the greatest efficiency when contacting 10-20 potential investors: the response rate will be quite sufficient.
- Negotiation. If your appeal is of interest, a personal meeting will be necessary, which will decide the question of the possibility of investing. Negotiations should be carefully prepared: create a short, bright, persuasive presentation in which you need to highlight key issues related to the project. It is advisable to use illustrative and handout materials. A potential investor will certainly ask a lot of questions.
- Documentation. Personal agreements are recorded in an official document, a kind of contract. In the practice of investing, such paper is called a "letter of commitment" or "drafting the terms of the transaction." It has no legal force, but is preliminary in relation to future official cooperation, which will begin after the signing of the contract. Only after that the company can receive the coveted funds.
