Presentation BNP Paribas Trust

International Tax & Estate Planning
Wealth Planning Structures
For internal use only SWITZERLAND
23.01.2009
Content
I. Wealth Planning and the clients needs
A. B.
II.
Meeting clients needs Tax and legal constraints
Estate Planning Structures
A.
Estate Planning vehicles

1. 2. 3. Trust Foundation Life Insurance Holding companies Private Investment Companies Illustration: Real Estate in France Business activities Internal offer External offer
B.
Holding Vehicles
1. 2. 3. 4.
C.
III.
Fiduciary offer presentation

1. 2.
Recent Tax News
A. B.
IV. Questions
Project of reform of the UE Savings Directive Offshore centres and exchange of information
2
23.01.2009
Meeting Clients Needs

A. B.
II.
A.

B.
Holding Vehicles
1. 2. 3. 4.
C.
III.

1. 2.
Recent Tax News
A. B.
IV. Questions
3
23.01.2009
Meeting Client Needs Key family concerns

Tax concerns
Issues relevant to family
9 Managing after-tax return on investments 9 Optimizing taxation of wealth transfer to next generation (inheritance/gift tax) 9 Optimizing tax position of next generation
Issues driven by country of residence

9 Optimization of foreign source income: - taxation at source and taxation in country of residence - application of double tax treaties - benefiting from foreign tax credits 9 Taxation of dividend and interest incomes 9 Taxation of capital gains 9 Wealth tax 9 Avoiding controlled foreign corporation rules and anti-abuse laws 9 Real estate tax
Mobility: transfer of tax residence

9 Getting out / getting in 9 Monitoring risks control of double tax residency : actual residence and double tax treaty criteria 9 Advance planning and tax opportunities before transfer of residence
4 23.01.2009
Meeting Client Needs Key family concerns Non-tax concerns Issues relevant to family
9 9 9 9 9 9 9 Charitable intentions / philanthropy Managing risks of divorce Second families Privacy Business succession Asset protection and protection Special assets, art, toys
Issues driven by country of residence

9 9 9 9 9 9 Political risks Kidnapping and security Relationships with the US Forced heirship Confidentiality Currency and exchange controls
23.01.2009
Tax and legal constraints

A. B.
II.
A.

B.
Holding Vehicles
1. 2. 3. 4.
C.
III.

1. 2.
Recent Tax News
A. B.
IV.
6
Practical Cases
23.01.2009
Tax and Legal Constraints Bank Secrecy and Tax Planning constraints Growing irrelevance of bank secrecy
9 9 9 9 9 9 9 Identification of ultimate beneficial owner (A form) EU and US political pressure Tax amnesties Voluntary and involuntary disclosure Exchange of information EU Savings Directive Use of compliant tax planning vehicles
Monaco anti-money-laundering legislation

Preventive regulations based on law 1.162 of 7 July 1993 on the participation of financial institutions in combating money laundering and terrorist financing, amended by law 1.253 of 12 July 2002. Strengthen of its financial transactions monitoring unit, Siccfin (Service dinformation et de contrle sur les circuits financiers) No explicit law enacted regarding tax avoidance Nevertheless, it is strongly recommended to be cautious on the implementation any tax scheme or structure The concept of tax fraud is recognized by Monaco tax authorities : 9 Generally, tax fraud is misleading tax authorities through forged documents or with malicious intent. Tax fraud gives rise to a fine (up to 4 times the amount of the tax that would have been normally paid) Potential imprisonment
7 23.01.2009
Monaco tax avoidance / tax fraud provisions

Tax and Legal Constraints Bank Secrecy and Tax Planning constraints Use of the tax and estate planning
Tax and estate planners and deontology
9 Tax planners are obviously subject to legal constraints 9 Do not have the status of tax layers: only give recommendations. Their recommendations should be validated by external lawyers and our tax planners can refer layers to the clients or work in cooperation with clients advisors 9 Consequently, tax and estate planners do not charge fees to the clients, they are a high value service freely provided to them. As gratuitous things are rare, please use our tax planners efficiently!
Strategic role
9 9 9 9 9 Kept informed of evolutions in the legal and tax environment of many jurisdictions Increasing risk monitoring Differentiation vis a vis competitors and quality of BNPP Wealth Management services Efficient tool for a better knowledge of the personal concerns of the client Allow fidelisation of the clientele
23.01.2009
Wealth Planning and clients needs

A. B.
II.
A.

B.
Holding Vehicles
1. 2. 3. 4.
C.
III.

1. 2.
Recent Tax News
A. B.
IV. Questions
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23.01.2009
Estate Planning Vehicles Trust
Definition of a Trust
Relationship that exists between the legal owner of the assets (the Trustee) and the equitable owner (the beneficiary) Assets placed under the control of the Trustee for the benefit of beneficiaries Settlor loses control over the assets transferred to the trustees Trust deed contains the different powers vested in the Trustee and the details regarding the trust (power of distribution, appointment and exclusion of beneficiaries, applicable law, trust period, etc.) Letter of wishes contains the settlors recommendations as to the way assets shall be managed and distributed
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23.01.2009
Estate Planning Vehicles Trust
Settlor
Appoints
Protector
Transfer of ownership
Non-binding letter of wishes
Control and Supervision
Trust Deed Binding rights and obligations

Equitable ownership
Legal ownership
Trustee
Protects
Legal ownership
Beneficiaries (full ownership upon final distribution)
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23.01.2009
Estate Planning Vehicles Private trust company (PTC)
It is possible for families to implement a structure where the trustee is a Private Trust Company (PTC) which shares are held by the family. The family is thus the trustee and keeps the full control over the trust. Indeed, in certain jurisdictions (e.g. Jersey) a license is not required to set up a PTC if it is administered by a licensed service provider. In practice: o The settlor settles the trust and appoints the PTC as trustee; o As shareholder of the PTC, the settlor has a hire and fire power on the directors of the PTC (he can also be a director of the PTC); o Professional service provider (e.g. BNPP Jersey) acts as corporate secretary and administrator of the PTC and maintains all trust records and accounts on behalf of the PTC.
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23.01.2009
Estate Planning Vehicles Private trust company (PTC)
Family and Settlor

100%
Directors
Settlor and family advisers (lawyer, accountant etc) BNPP must not provide directors
Private Trust Company or Trustee (Jersey, Bahamas, New Zealand)
Administration Agreement
Corporate Secretarial and Administration services provided by BNPP Jersey
Trust A Liquid assets
Trust B Business Assets
Holding Company A Bank accounts

Holding Company B Real estate

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Operating companies
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Estate Planning Vehicles Foundation Definition of a Foundation

An incorporated estate which has been set up by a Founder for purposes specified by him Assets donated by the Founder cease to be his property when transferred and become the property of the Foundation Legal entity of unlimited duration Will of the Founder is set out in the documentation of the Foundation (statutes, by-laws, etc.) The Foundation capital is established for the purpose of continuously providing means for education and instruction, maintenance or relief to members of a family Parties involved: founder, foundation board, beneficiaries, protector, agent for service (legal representative) Incorporation possible in Liechtenstein, Panama, Netherlands Antilles and now also in the Bahamas and Jersey
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23.01.2009
Estate Planning Vehicles Foundation
Founder
Appoints
Binding By-laws
Protector
Transfer of ownership
Particular provisions
Control and Supervision
Statutes General provisions
Transfer of property
Foundation
Protects Full ownership
Beneficiaries
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23.01.2009
Estate Planning Vehicles Life insurance Features

Life insurance is based on the mechanism of provision in favour of a third party. The subscriber (Mr X) pays a premium (this can take the form of securities/shares) to a life insurance company, which undertakes to pay the appreciated capital to appointed beneficiaries (in general her husband or children) according to the beneficiary clause of the contract. This clause could for instance stipulate that on the death of the life assured (generally the same person as the subscriber), the life insurance company is to distribute the total value of the policy to the subscribers children (Mr Xs wife and/or children). Designates Subscriber (Mr X) Transfer of ownership (premium) Chooses Regulators Control and Supervision
Insured Person(s)
Foreign Insurance Company (e.g : Luxembourg) Distribution on death of policy holder Beneficiaries
Please note that, contrary to a Trust or a Foundation, a life insurance policy does not constitute a long term and asset/distribution monitoring tool as upon the death of the subscriber, the insurance company will distribute the capital to the beneficiaries.
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Estate Planning Vehicles Life insurance - Purposes

Estate planning The assets wrapped in the life insurance policy will be attributed to appointed beneficiaries according to the beneficiary clause of the contract. This beneficiary clause is drafted according to subscribers wishes Flexibility The subscriber can at any time modify the beneficiary clause of the contract (so long as its benefit has not been accepted by its beneficiaries). The subscriber would have buy-back and revocation rights The subscriber determines the investment policy of the insurance policy and chooses the investment manager. Tax planning Favourable tax treatment in the jurisdiction of the insurance company (e.g. no taxation in Luxembourg) and in the jurisdiction of the subscriber : Income tax : usually no taxation on investments wrapped in the life insurance policy until a withdrawal is made Inheritance tax : Assets wrapped in the life insurance policy are not part of the subscriber's estate during his lifetime with the result that inheritance tax should usually not be levied on the distribution of the policy to the subscribers heirs upon his death. Asset protection / confidentiality : Since the life insurance company is the legal owner of the assets, attacks by eventual future creditors of the subscriber will not be opposable. Professional / banking secrecy in the jurisdiction of the insurance company (e.g. Luxembourg). In Luxembourg, should the insurance company default, the subscriber is a first-rank privileged creditor i.e. he is paid back the assets before any other creditor of the insurance company. Based on civil law, Life insurance benefits from a strong international recognition (EMEA, LatAm,)
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Holding Vehicles
A. B.
II.
A.

B.
Holding Vehicles
1. 2. 3. 4.
C.
III.

1. 2.
Recent Tax News
A. B.
IV. Questions
18
23.01.2009
Holding Vehicles Holding Companies

Notion of holding company
Companies set up with the main purpose of holding intangible assets
9 9 9 9 Stocks Bonds IP rights (or tangible assets generally limited to real estate)
Objective: benefiting form a domestic favourable tax treatment

9 Optimization of financial flows:
Low or no taxation of dividend/ interest / royalties payments Low or no taxation of rental incomes Low or no taxation of capital gains
9 Optimization of capital gains 9 Optimization of withholding taxes (inbound and outbound):
Tax planning tools

9 9 9 9 Domestic law (e.g. participation exemption, withholding tax exemption) Treaty network EU Parent Directive EU Directive on interest and royalty payments
Tax constraints
9 Capital duty and transfer taxes 9 Anti-abuse legislation (CFC rules, transfer pricing rules) 9 Thin capitalization rules
19 23.01.2009

Illustration: EU harmonization of dividend flow taxation the EU Parent Directive
Minimum 95% corporate Tax exemption on dividends received from subsidiary EU Parent company
Favourable tax treatment:

9 Corporate tax exemption on dividend received (minimum 95%) in the member State of the receiving company (Parent) 9 Withholding tax exemption in the member State of the distributing company (Subsidiary)
Conditions of application:
9 Companies incorporated in EU member States 9 Legal form listed in the Directive 9 Company subject to tax without possibility to be exempt in its jurisdiction 9 Minimum participation rate (depending on jurisdictions, generally 10%) 9 Minimum shareholding period depending on jurisdiction, generally at least 1 year)
EU subsidiary
Dividends (withholding ta exemption)
For outgoing dividends: shares need to be held at 25% and at least 1 year (depening jurisdiction))
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23.01.2009
Illustration: advantages of a Maltese holding company

Upon dividend distribution from Dutch holding: o No withholding tax in the Netherlands by application of EU parent directive (condition: participation in Dutch holding > 5%) o No taxation in Malta (condition: participation in Dutch holding > 10%) Upon sale of the shares in Dutch holding: o No capital gain tax in the Netherlands (by application of Dutch participation exemption regime - condition: participation in Dutch holding > 5%) o No capital gain taxation in Malta (by application of Maltese participation exemption regime - condition: participation in Dutch holding > 10%) Upon dividend distribution from Malta Company to BVI: o No withholding tax in Malta Remark: subject to substance requirements of the Maltese company
b
Mr X
(Ukraine)
THIRD PARTNER
(Netherlands)
Nominee shareholder
BVI company
0.05%
99.95%
Malta company
30%
70%
Dutch Holding
100%
Cyprus Holding
100%
Ukrainian Company
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Holding Vehicles Holding Companies Luxembourg

Exemptionofdividends *participation *retentionperiod Exemptionofcapitalgains *participation *retentionperiod Subjecttotaxconditionforforeignsubsidiary DomesticWHTondividends (canbereducedby DTT) ExemptionofWHTondividendstoEu parent *levelofparticipation *retentionperiod WHToninterest (domesticlawcanbereducedby DTT) WHTonliquidation distribution Yes 10%orEuro1.2million 1year Yes 10%ormin.Euro6millions 1yearorcommitment Yes(min.15%effectivetaxrateif nonEUsubsidiary,unlessDTT) 15% Yes 10%orEuro1.2million 1year No No
Denmark
Yes 15%(10%from01.01.09) 1year Yes none 3years yes 15% Yes 15%(10%from01.01.09) 1year 25% sametreatmentascapital gains
Cyprus
Yes 1% n/a Yes none n/a Yes No Yes n/a n/a No No
Capitalduty DTTnetwork Taxrate For internal use only SWITZERLAND
0,5for2008/Euro100from 01.01.2009 51 29.63%inLuxembourgcity 30.8%inotherdistricts

22
No 80 25%
0,6%ofthenominalvalueofthe authorisedcapital 112 10%

23.01.2009
Holding Vehicles Holding Companies Switzerland

Exemptionofdividends *participation *rentention period Exemptionofcaptial gains *participation *rentention period Subjecttotaxconditionforforeignsubsidiary DomesticWHTondividends(canbereducedbyDTT) ExemptionofWHTondividendstoEu parent *levelofparticipation *rentention period WHToninterest(canbereducedbyDTT) WHTonliquidationdistribution Yes 20%ormarketvalueChf 2mios 1year Yes 20% 1year No 35% Yes 25% 1year 35%forinterestderivedfrom Swissdebtors 35%
UK
No(creditmethod) 10% No Yes 10% 1year No No Yes No NO 20% No
Netherlands
Yes 5% n/a Yes 5% n/a Yes 15%(unlessparticipation exemptionapplies) Yes 5% n/a No 25.5%
Capitalduty DTTnetwork rate use only ForTax internal SWITZERLAND
1%fromCHF1000000 88 25%(federalandcantonal) 23
No 112 28%
No 81 25.5%
23.01.2009
Holding Vehicles Private Investments Companies -PIC

Characteristics of Private Investment Companies
9 IBC : International Business Company = company that does not undertake commercial activities but is primarily established to hold personal asset 9 No taxation of inbound and outbound incomes 9 A local agent provides the head office, pays the annual taxes and can provide local directors 9 Generally, assets limited to financial assets: currencies, monetary products, stocks, bonds, precious metals, structured products, etc.) 9 Set up in many jurisdictions: Panama, BVI, Bahamas, Hong-Kong, Cyprus, Belize, 9 Registered or Bearer shares depending on the jurisdiction; if registered shares, a nominee shareholder is generally provided (by authorized fiduciary provider or BNPP Trust Companies)
Operational remarks:
9 Legal ownership is kept by the Client (beneficial owner) day to day management of the company handled by nominee directors management of financial assets can be handled by Private though an appropriate mandate 9 The assets of the PIC can generally be used as a guarantee for personal loans 9 The BO can have a signature on the bank account of the PIC, subject to confidentiality 9 A PIC is not ,as such, an estate planning vehicle: a deed should be executed or the PIC should be associated to a Trust or Foundation
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23.01.2009
Context :
Holding Vehicles Illustration: Real estate in France
Our client (Mr X) is a UAE national, residing in UAE He contemplates to acquire a commercial building in Paris and receive rental incomes
Tax planning:
During the lifetime of the operation:
o Optimisation of French corporate tax: French corporate tax applies on net profits of the SAS (i.e. : rental incomes interest payments): -> Optimisation by maximum level of debt of the SAS Remark: attention to be paid to limitation of tax deductibility of interests paid with respect to shareholders loans (thin capitalization rules), meaning favorize bank loan rather than shareholder loans Optimisation of French wealth tax : French wealth tax applies on the net value of the shares of SAS -> Optimisation by maximum level of debt of the SAS Optimisation of the 3% tax French 3% tax would not be applicable as long as the identity of the beneficial owner (Mr X) is disclosed Optimisation of capital gains by the use of a Luxembourg company (SOPARFI) + French company (SAS socit par actions simplifie ): Step 1 : SOPARFI sells the shares of the SAS : No capital gains taxation neither in France nor in Luxembourg Step 2 : liquidation of SOPARFI and distribution of the proceeds up to Mr X: No taxation in Luxembourg Optimisation of transfer tax French transfer tax (approx. 6%) would be due on transfer of shares of the SAS to the acquirer Alternative solution : 2 SOPARFI + SAS. Indeed, the sale of shares in a 1st SOPARFI by a 2nd SOPARFI holding the SAS would not give rise to French transfer taxes.
25
o o o o
Exit of the operation:
25
23.01.2009
Mr X
100%
LuxCo 1
100%
Optimization of capital gains taxation by sale of shares of the SAS or the shares of a 2nd LuxCo (LuxCo 2)
LuxCo 2
Optimization of French transfer tax if sale of the shares of LuxCo 2
SAS French operating entity
Optimization of French corporate tax by debt (deductibility of interest) Optimisation of French wealth tax by debt
100%
Commercial building
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23.01.2009
Acquisition through a SAS + LuxCo Financing by a bank loan

Mr X
100%
No withholding tax if liquidation of LuxCo 1
No transfer tax in France if the transfer of shares in LuxCo 2 by LuxCo1 to the acquirer No taxation in Luxembourg on dividends paid by LuxCo 2* to LuxCo 1 No taxation in Luxembourg on the sale of LuxCo 2 shares* by LuxCo 1 No taxation in Luxembourg on dividends paid by the SAS* to LuxCo2 (or LuxCo1) No withholding tax on dividends paid by SAS to LuxCo 2 (or LuxCo1)** No taxation in Luxembourg on the transfer of the SAS shares* of SAS by LuxCo1 to acquirer
BNP Paribas
LuxCo1
100%
LuxCo 2
100%
If sale of the shares in SAS by Lux Co2 (or LuxCo1), capital gain tax exemption in Luxembourg* Lombard loan (50%) Mortgage loan (50%) SAS French operating entity
Taxation of SAS on rental income at corporate income tax 33.33% BUT deductibity of interest paid with respect to bank loans Avoids thin capitalization rules as shareholder loan is replaced by a bank loan (Lombard loan): 100% BNPP financing *condition: min 1 year and min 10% holing of the shares in the subsidiary, (Luxembourg participation exemption regime). ** condition: holding min 2 years and min 15% of the shares in the subsidiary, 27 (European Parent-Subsidiary Directive).
100%
Commercial building
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23.01.2009
Holding Vehicles Business Activities Preliminary remarks:

WARNING: Restricted use of commercial bank accounts within Private Bank
9 BNPP Private Bank is not equipped and not designed to deal with commercial bank accounts, flow bank accounts or implying many operational transactions 9 In principle, referral to Corporate Banking 9 For bank accounts of holding companies, contact with the compliance department for checking of nature of transactions and assets
Large value added of structuring business activities

9 Large potential: business are family owned 90% in Italy, 74% in UK, 58% in US 9 Potential for Private Bank: obvious link between private concerns and family business 9 Large value added of tax planning for clients: reduce tax burden, increase return at private level, enhance competition, develop market strategies
WARNING : Careful structuring of business activities

9 Implementation and structuring of tax planning business and operational activities should be carefully reviewed by our Tax and Estate Planning team and validated by an external law firm 9 Indeed, such activities (even more than private operations) are subject to large scrutiny by tax administrations. 9 These kind of planning should respect basic domestic rules such as transfer pricing regulations and CFC restrictions (use of tax havens)
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23.01.2009
Illustration: UK trading agency
Holding Vehicles Business Activities

Fiduciary Service provider
Agency Agreement 100% shareholding
b
100% with nominee shareholders
Germany Italy market USA
PRINCIPAL BVI holding company (nominee shareholders)
AGENT UK company
Purchases
Sells
Profits from the trade less a 5% deduction of commission payable to UK company for its services
Russian Importer
Transfer of goods
Step 1 : Execution of a trading agreement between the UK trading agency and a BVI company incorporated for Mr X Step 2 : The UK Agent purchases goods produced in Italy, Germany, the USA, then sells the goods to Russian importer Step 3 : Taxation in the UK of the commissions received by the UK Agent (30% of 5%). 95% of the profit generated by the Agent is transferred to the principal (BVI company) without suffering any taxation in the UK Advantages of the UK trading agency: 9 Optimization of tax treatment on financial flows : UK corporate tax rate (30%) will only apply on 5% of the profits generated by the UK Agent (according to a ruling granted to the UK agent) 9 The Principal (BVI company) can book its assets with Private Banking
29
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23.01.2009
Illustration: Restructuring of private + operating business

Step 1: Transfer of residence to Belgium
Holding Vehicles Business Activities
b
100%
Trademark X
No taxation of latent capital gains
b
100%
X Holding
Trademark X
X Holding
Step 2: Sale of Trademark to a Luxembourg SPV
b
100%
X Holding
SPV Luxembourg Trademark X
X Operating companies
residence and timing constraints) 9No wealth tax in Belgium 910% Luxembourg taxation on royalties 9No withholding tax on royalties from EU licensees 910% effective tax on dividends received by Mr X 9No capital gain tax upon sale of shares in X Holding by Mr X
9No taxation of capital gains (subject to actual
30
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23.01.2009
Meeting Clients Needs

A. B.
II.
A.

B.
Holding Vehicles
1. 2. 3. 4.
C.
III.

1. 2.
Recent Tax News
A. B.
IV. Questions
31
23.01.2009
Presentation of Fiduciary Offer PRIVATE Cooperation TEP / Fiduciary services BANKING

9Tax and estate planning 9Wealth protection 9Asset consolidation
Non-financial offer
Prospects Clients RM Switzerland / Monaco
9 Incorporation and administration of legal entities / trusts
Tax & Estate Planning -TEP
Trust & Fiduciary Services - TFS BNP Paribas Trust Company SA
TEP Geneva
Lawyers and tax planners specialised in international tax and estate planning and tax optimisation Specialists of patrimonial structures (holding companies, life insurances, family foundations, private investment companies, trusts, etc.) Responsibility for commercial development: offer global tax expertise and advisory services which are free of charge for international private clients. constant development of new opportunities (monitoring, R&D). offer workshops on specific legal and tax topics
32
Main products: Constitution and administration of family foundations, trusts and private investment companies Main services: Realisation of all legal operations concerning the constitution and administration of structures with its local, internal and external providers, transfer of domicile, provision of directors and nominee shareholders, account opening and maintenance as well as different services to ensure the good standing of the legal entity
23.01.2009
Presentation of Fiduciary Offer Cooperation TEP / Fiduciary services

1 Stages:
Advice
If the client and the personal advisor do not have a clear vision of the clients tax and estate planning needs, they should contact the TEP team
Evaluation
The TEP team evaluates the client needs and provides the necessary advice (external advice if necessary)
Proposition
When the TEP team suggests the setup of an estate structure, it suggests an internal or external provider of fiduciary services which suits the most the clients needs
Constitution
After the acceptance of the case, the service provider proceeds to the constitution of the recommended structure
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23.01.2009
Presentation of Fiduciary Offer Internal Offer BNP Paribas Trust Company SA

Company established under Swiss law in Geneva, 100% shareholder: BNP Paribas Part of Products and Services / Private Banking Part of the TFS (Trust & Fiduciary Services) network: Geneva, Luxembourg, Jersey; Hong Kong,
Singapore, Panama, Bahamas, Amsterdam

Objective = set up and to administer wealth management and corporate structures for international
private clients, selected in close collaboration with the International Tax & Estate Planning Teams and the personal advisors of the clients
Board of Directors: Patrick du Saint, Franois Dacquin, Marc Weber Authorised Swiss Financial Intermediary and controlled by the Federal Administration of Finance
concerning Anti-Money Laundering

Team: Patrick taverne (Director), Juliane Jungo, Christian Seifert, Luca Nacci, Jennifer Simons, Sabile
Zeqiri
Trust Acceptance Committee (CAT): compliance, administrator, Trust Company, Wealth Management
charged with accepting the opening, maintenance, closure and all significant changes in relations
For internal use only Switzerland SWITZERLAND
34
Trust Company
2008
Presentation of Fiduciary Offer Internal Offer
Internal offer is not adapted for: Structures without bank relationship to BNP Paribas Group Structures which do not allow to guarantee a high level of risk management and control, i.e. particularly: Structures pursuing a commercial activity Re-invoicing Structures used as transit account Structures created with the purpose to purchase/hold aircrafts, yachts, artworks,
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23.01.2009
Illustration: Trust/ Foundation
client
Mandate agreement
BNP Paribas Trust Company SA
BNP Paribas (Suisse) SA
Foundation / Trust Liechtenstein
Bank account
Board of Foundation/ Trustee
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23.01.2009
Illustration: PIC

client
Mandate agreement
BNP Paribas Trust Company SA

Bearer or registered shares (Nominee shareholder provided by the Trust Company)
BNP Paribas (Suisse) SA
Company Bahamas, Panama, BVI
Bank account
Local directors provided by the Trust Company

General power of attorney in favour of the Trust Company
37
Trust Company
2008
Notices:
Legally, the customer of the bank is the Foundation / Trust / Company and not the BO The instructions of the BO must be transmitted to the Trust Company in order to obtain the
signature of the representatives of the Foundation / Trust / Company

For private investment companies:
y y y y
3 different modes of operation: full service by Candeo SA (account opening and signature right) bank account signature authority given to the client directly by directors (except Bahamas) client acts as director himself Original shares certificate always kept by the Trust Company Choice of being provided with nominee shareholder (+ declaration of trust) Investment authorities in favour of third parties - form 50324 Possibility to issue a Will
38
Trust Company
2008
Presentation of Fiduciary Offer External Offer
Use of the external offer : If no internal offer available If the client asks for it MUST ABSOLUTELY be made through our AUTHORIZED fiduciary providers network (listing of authorized providers available with the tax end estate planning team) There is an agreement procedure for the two types of providers the bank is using : Legal and tax advisers External fiduciary companies
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23.01.2009
Recent Tax News

A. B.
II.
A.

B.
Holding Vehicles
1. 2. 3. 4.
C.
III.

1. 2.
Recent Tax News
A. B.
IV. Questions
40
23.01.2009
Project of Amendment to EU Savings Directive

Broaden application scope of the current Directive:
1. Application to intermediary structures
Scheme 1: intermediary structure outside EU and paying agent in the EU
Paying establishment EU
Non-EU structure Payment of interests
b
BO EUs-resident
APPLICATION OF THE DIRECTIVE BY THE EUs PAYING AGENT (knowledge of the BO by application of the anti-laundering rules)
Scheme 2: intermediary structure within EU* and paying agent within EU or outside EU
Paying establishment EU or non-EU
Payment of interests
EU structure*
b
BO EUs resident
* are aimed EUs transparent structures (ex : trusts, foundations, private investment companies, partnerships)
APPLICATION OF THE DIRECTIVE BY THE INTERMEDIARY STRUCTURE EU ( paying agent on reception )
2.
Broaden definition of interest payments:

Securities equivalent to debt claims (capital invested protected and return on capital defined at the issuing date) Life insurance contracts which performance is strictly linked to income from debt claims or equivalent income, when they provide for very low biometric risk of coverage in relation to the capital insured)
41 23.01.2009
Project of Amendment to EU Savings Directive
3.
-
Application to any type of investment funds :

current Directive applies only to funds subject to the EU Directive (i.e. having a European passport) the reform intends to extend its application to all investments funds (UCITS/non-UCITS, EU and foreign)
Timing and conditions for the implementation of the project :

1. Grand-fathering clause:
application to incomes from debt claims and equivalent securities issued after 1 December 2008; application to life insurance policies subscribed after 1 December 2008 At this stage, we do not know if this retroactive date would be kept in case of vote by the EU member States.
2.
-
CAUTION: Non-definitive provisions

To enter in force, this draft should be presented to the EU Council and approved by the EU member States unanimously. Concerning Switzerland:
No direct application except in case 2 above To be applicable in Switzerland, the new Directive should give rise to negotiations with the EU for the revision of the bilateral agreement which is scheduled for 2010, implying no application before 2012. Switzerland has thus a competitive advantage comparing to EU State Members such as Luxembourg Switzerland has subjected the opening of negotiations on the Directive to the implication of Singapore, Hong-Kong and Macao within the revision process.
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Recent Tax News

A. B.
II.
A.

B.
Holding Vehicles
1. 2. 3. 4.
C.
III.

1. 2.
Recent Tax News
A. B.
IV. Questions
43
23.01.2009
Exchange of information treaties
BVI signed Tax and Information Exchange Agreements (TIEA) with UK and Australia in October 2008. Jersey and Guernsey signed similar agreements with Nordic economies of Denmark, Faroe Islands, Finland, Greenland, Iceland, Norway and Sweden also in October 2008. Liechtenstein supposed to sign one TIEA with USA. Entering into force as soon as the respective governments have completed the legislative procedures needed to give them effect. No automatic exchange of information but exchange of information on request relating to specific criminal or civil tax matters under investigation. Information exchanged without regard to whether the conduct being investigated would constitute a crime under the laws of the requested party if it occurred in the territory of the requested party. Information exchanged without regard to whether the conduct being investigated would constitute a crime under the laws of the requested party if it occurred in the territory of the requested party.
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23.01.2009
Exchange of information treaties
Obtain and provide upon request : information held by banks, other financial institutions, and any person, including nominees and trustees; information regarding the ownership of companies, partnerships and other persons, including ownership information on all such persons in an ownership chain; in case of trusts, information on settlors, trustees, beneficiaries and protectors; in case of foundations, information on founders, members of the foundation council and beneficiaries. Safeguards: information exchanged to be kept confidential, no fishing expedition permitted, all other means have been used to collect the requested information, requesting party must provide many details in its request (identity of taxpayer, nature and type of requested information, tax purposes for which the information is sought, reasonable grounds for believing that the information requested is present in the territory, etc.)
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23.01.2009
Recent Tax News

A. B.
II.
A.

B.
Holding Vehicles
1. 2. 3. 4.
C.
III.

1. 2.
Recent Tax News
A. B.
IV. Questions
46
23.01.2009
Questions
QUESTIONS?
For addition questions or clarifications, your Tax and Estate Planning Team remains at your entire disposal:
47
23.01.2009

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International Tax & Estate Planning

Wealth Planning Structures

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Meeting clients needs Tax and legal constraints

Estate Planning Structures

Estate Planning vehicles

Fiduciary offer presentation

Recent Tax News

Meeting Clients Needs

Meeting clients needs Tax and legal constraints

Estate Planning Structures

Estate Planning vehicles

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Recent Tax News

Meeting Client Needs Key family concerns

Issues driven by country of residence

Mobility: transfer of tax residence

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Tax and legal constraints

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