Introduction to Offshore Corporate Structuring

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

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Introduction to Offshore Corporate Structuring

  1. 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. 2. What does“offshore corporatestructuring” mean?
  3. 3. Offshore structures“Creating legal structures injurisdictions external to a company’sprincipal base of operations, withthe goal of creating an economicbenefit”
  4. 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. 5. Cross-border sales& purchasesInvestments &financingAreas of application
  6. 6. Significant benefitsText$2 trillion held offshoreby US companies alone
  7. 7. Offshore terminologyDouble IrishBankruptcy remoteSPV / SPCHarmful tax competitionTransfer pricingInformation sharingDutch SandwichTax havenAssignment ofintellectual propertyrightsRoyaltiesLayering
  8. 8. Specific benefits ofoffshore structures
  9. 9. Asset protection
  10. 10. Diversification of risk
  11. 11. Security
  12. 12. Privacy protection
  13. 13. Reduce unnecessary taxes
  14. 14. Facilitate ownership transfers
  15. 15. What are the costs andrisks?
  16. 16. Implementation
  17. 17. Compliance
  18. 18. Operations and management
  19. 19. Change in laws
  20. 20. Change in application of lawsSource: NewYork Times
  21. 21. Political
  22. 22. Political
  23. 23. Political
  24. 24. Reputational
  25. 25. Specific OFCs
  26. 26. Cayman Islands
  27. 27. Bermuda
  28. 28. Ireland
  29. 29. Cyprus
  30. 30. Examples of offshorestructures
  31. 31. Hedge fundsSource: Hedge Fund Fundamentals
  32. 32. Structured financeSource: IMF
  33. 33. Real estate investmentsSource:
  34. 34. “Double Irish” + “Dutch Sandwich”Source: Mike Seccombe,The Global Mail (graphic by Ella Rubeli)
  35. 35. Regulatory landscape
  36. 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. 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. 38. Resources
  39. 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

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