Events

The centre of gravity of the world's economy has been moving to Asia. When investing in Asia, taxation is an important issue. How do we invest, which business form can and should we use, how should we hold the investment (the holding structure) and how should we fund the investment (the capitalization structure).

Until recently, the holding structure involved the use of holding companies located in tax havens or companies located in a country which has many favourable tax treaties. Often, investors used single purpose holding companies whose purpose is to hold one single investment only, as opposed to a number of investments, so that the investor could sell the shares of the foreign holding company instead of the shares of the investment if they want to dispose of the investment.

That has now changed with China, Indonesia and India following Japan and Korea, implementing laws and issuing rulings which require the structure to satisfy certain conditions. This results in a fundamental change in tax strategy for internationally operating companies.

Similar developments are happening with respect to the question as to how to finance or license the investment. Furthermore, where related party transactions are concerned (services, sales of product, financing, licensing), most countries in Asia have now implemented transfer pricing legislation and disclosure requirements in their domestic tax legislation, prompting investors to carefully analyse the build-up of their group transactions to ensure that they meet the arm's length condition, failing which their transactions may be subject to adjustments.

Mr Pieter de Ridder will discuss the various choices of business forms and their relevance from a tax point of view, and discuss the important issues for establishing a proper tax strategy for international businesses when setting up a holding and financing structure for their investments and how the transfer pricing developments impact on their international transactions.

The seminar is conducted in an interactive manner and participants are welcomed and encouraged to ask questions, comment and discuss.