Introduction to Offshore Corporate Structuring

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Slide deck from guest lecture at MGIMO, Moscow, on the topic of Offshore Structuring

Slide deck from guest lecture at MGIMO, Moscow, on the topic of Offshore Structuring

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  • 1. Presented byLeighton Peter Prabhu, BCom MPhil CA CPAManaging Partner, Interstice Consulting LLPBoard Member, Canada-Eurasia-Russia Business Association (CERBA)Introduction to offshorecorporate structuringMoscow State Institute of International Relations (MGIMO)23 April 2013
  • 2. What does“offshore corporatestructuring” mean?
  • 3. Offshore structures“Creating legal structures injurisdictions external to a company’sprincipal base of operations, withthe goal of creating an economicbenefit”
  • 4. Offshore financial centre (OFC)“A jurisdiction where the bulk ofdeposit and lending activity istransacted with non residents, typicallyoffering a high degree of secrecy, littleregulation and zero/low taxes to suchcustomers.”
  • 5. Cross-border sales& purchasesInvestments &financingAreas of application
  • 6. Significant benefitsText$2 trillion held offshoreby US companies alone
  • 7. Offshore terminologyDouble IrishBankruptcy remoteSPV / SPCHarmful tax competitionTransfer pricingInformation sharingDutch SandwichTax havenAssignment ofintellectual propertyrightsRoyaltiesLayering
  • 8. Specific benefits ofoffshore structures
  • 9. Asset protection
  • 10. Diversification of risk
  • 11. Security
  • 12. Privacy protection
  • 13. Reduce unnecessary taxes
  • 14. Facilitate ownership transfers
  • 15. What are the costs andrisks?
  • 16. Implementation
  • 17. Compliance
  • 18. Operations and management
  • 19. Change in laws
  • 20. Change in application of lawsSource: NewYork Times
  • 21. Political
  • 22. Political
  • 23. Political
  • 24. Reputational
  • 25. Specific OFCs
  • 26. Cayman Islands
  • 27. Bermuda
  • 28. Ireland
  • 29. Cyprus
  • 30. Examples of offshorestructures
  • 31. Hedge fundsSource: Hedge Fund Fundamentals
  • 32. Structured financeSource: IMF
  • 33. Real estate investmentsSource:
  • 34. “Double Irish” + “Dutch Sandwich”Source: Mike Seccombe,The Global Mail (graphic by Ella Rubeli)
  • 35. Regulatory landscape
  • 36. •Global Forum onTransparency and Exchange ofInformation for Tax Purposes•Aggressive Tax Planning•Fighting Unintended DoubleNon TaxationG20•Information sharing•Tax competition - Ireland•Cyprus•Foreign Account TaxCompliance Act (FATCA)•Automatic exchange of taxinformationCurrent themes
  • 37. Offshore structures - summary• Cayman Islands• Bermuda• Cyprus• Switzerland• Ireland• Luxembourg• BritishVirgin Islands• USA• OECD• EU• G20 / FATF• Foreign sales• Cross-border investments• Securities issuance• Asset protection• Diversification• Security• Privacy• Tax reduction• Facilitate ownership transfers• Implementation• Compliance• Operational and managerial• Assets held in foreign countries• Change in laws• Change in application of laws• Political• ReputationalBENEFITS COSTSRISKS MAIN OFCS REGULATORSAPPLICATIONS
  • 38. Resources
  • 39. Спасибо!Leighton Peter PrabhuBCom MPhil CA CPAManaging PartnerInterstice Consulting LLPTverskaya 9Moscow 125009Email: lsp.prabhu@intersticeconsulting.comMob: +7 916 4*4 *7 *2Blog: intersticeconsulting.com/russia/e-commerce