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

1. Presented by
Leighton Peter Prabhu, BCom MPhil CA CPA
Managing Partner, Interstice Consulting LLP
Board Member, Canada-Eurasia-Russia Business Association (CERBA)
Introduction to offshore
corporate structuring
Moscow State Institute of International Relations (MGIMO)
23 April 2013

2. What does
“offshore corporate
structuring” mean?

3. Offshore structures
“Creating legal structures in
jurisdictions external to a company’s
principal base of operations, with
the goal of creating an economic
benefit”

4. Offshore financial centre (OFC)
“A jurisdiction where the bulk of
deposit and lending activity is
transacted with non residents, typically
offering a high degree of secrecy, little
regulation and zero/low taxes to such
customers.”

5. Cross-border sales
& purchases
Investments &
financing
Areas of application

6. Significant benefits
Text
$2 trillion held offshore
by US companies alone

7. Offshore terminology
Double Irish
Bankruptcy remote
SPV / SPC
Harmful tax competition
Transfer pricing
Information sharing
Dutch Sandwich
Tax haven
Assignment of
intellectual property
rights
Royalties
Layering

8. Specific benefits of
offshore 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 and
risks?

16. Implementation

17. Compliance

18. Operations and management

19. Change in laws

20. Change in application of laws
Source: NewYork Times

21. Political

22. Political

23. Political

24. Reputational

25. Specific OFCs

28. Cayman Islands

29. Bermuda

30. Ireland

31. Cyprus

32. Examples of offshore
structures

33. Hedge funds
Source: Hedge Fund Fundamentals

34. Structured finance
Source: IMF

35. Real estate investments
Source:

36. “Double Irish” + “Dutch Sandwich”
Source: Mike Seccombe,The Global Mail (graphic by Ella Rubeli)

37. Regulatory landscape

38. •Global Forum on
Transparency and Exchange of
Information for Tax Purposes
•Aggressive Tax Planning
•Fighting Unintended Double
Non Taxation
G20
•Information sharing
•Tax competition - Ireland
•Cyprus
•Foreign Account Tax
Compliance Act (FATCA)
•Automatic exchange of tax
information
Current themes

40. 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
• Reputational
BENEFITS COSTS
RISKS MAIN OFCS REGULATORS
APPLICATIONS

41. Resources

42. Спасибо!
Leighton Peter Prabhu
BCom MPhil CA CPA
Managing Partner
Interstice Consulting LLP
Tverskaya 9
Moscow 125009
Email: lsp.prabhu@intersticeconsulting.com
Mob: +7 916 4*4 *7 *2
Blog: intersticeconsulting.com/russia/e-commerce