International law firm Integrites in cooperation with renowned experts in the sphere of asset structuring from Great Britain, Netherlands and Jersey shared new European ways for asset management and asset protection in the light of the legislative realities of Ukraine.
The international business seminar was organized by ILF Integrites and touched upon the most pressing issues for the protection of corporate and personal assets. The seminar took place on November, 20 at InterContinental Kiev Hotel and became the unique business platform for owners and top managers from more than 40 leading financial group and large companies from the real economy sector of Ukraine.
The moderator of the business seminar was Ilya Soykis, partner of ILF Integrites, well-known expert in tax and corporate law, M&A. During the first session speakers focused on the realities of the current business environment, namely expansion of assignments to state budget, increased government control over trading operations, mandatory disclosure of information on beneficiaries. In particular, Yaroslav Abramov, Senior Associate of ILF Integrites explained why now it was high time we thought about the security of business and personal capital. During the speech Integrites expert examined emerging risks for the business and showed alternative ways to minimize them, revealed principles of operation of business structures, described the objective pros of the different jurisdictions and recommended “to depart from the well-known cliched schemes, which increase the risk of unscheduled inspections by the tax authorities and simply don ‘t take root in the structure of the company”.
The next took the floor Lilia Gontcharova, Senior Associate of the CIS Desk from Loyens & Loeff N.V, a recognized leader in the legal market in Europe. Focusing mainly on the peculiarities of doing business in Ukraine, Mrs Gontcharova advised specific solutions for Ukrainian market, revealing the advantages and opportunities of the Dutch jurisdiction, pointing to the practical features of the work of Ukrainian business with the Netherlands for both direct and reverse investment: “Among the most attractive features of the Dutch jurisdiction there are: CIT rate: 20% - 25%, wide double tax treaty network, no WHT on profit distributions, interest / royalties and such special tools as cooperative and STAK foundation”. Mrs Gontcharova paid special attention to the Dutch legislative innovations over the 2012.
The second session was opened by Frederick Deacon, Director of Whitmill Trust Company Limited, with a speech on “International Structuring Tools for Ukrainian, Russian & CIS Clients”. In the course of the report he highlighted the main advantages of Jersey as international financial center, demonstrated the most common structures of using this jurisdiction, presented opportunities and constraints, including such tool as a trust. Analyzing benefits and risks of trusts Mr. Deacon noticed “Today in the world using of trusts is becoming a trend. One should note that one of trusts’ main “trumps” is the ability to migrate. It means if the legislation of the country, where trust is registered, has changed, you could choose other jurisdiction with more attractive conditions”.
Andrew Terry, Head of International Corporate Tax and Joint Head CIS Group Withers LLP (London), delivered the final speech was dedicated to the key aspects of using such tools of asset protection as foundations, trusts and holding companies and outlined determinants required for the choice of jurisdiction. Mr. Terry highlighted: “besides well-known offshore zones such as Belize, the Cayman Islands, Panama, etc., there are a number of attractive jurisdictions in Central Europe. Choosing the most appropriate jurisdiction for your structure look at international ratings: S&P, Moody’s, Fitch”
One the most burning issues for Ukrainian business, a new Cyprus Convention, signed on November, 8 by the Presidents of Ukraine and the Republic of Cyprus, was discussed during the seminar. Consequences of the Convention, its main similarities and differences from the Russian, signed in early 2012, were actively discussed during the panel discussion by all participants. Despite the diversity of issues that sounded from the audience, the guests of the business seminar agreed on one thing: in view of recent legislative initiatives and tightening of state control over transfer pricing, Ukrainian business more badly needs revision of efficient business structures, modification or development "from scratch" of efficient schemes for asset protection. At that time the presence of large arsenal of structuring tools, advantages and disadvantages which are not always easy to combine in a single clear "picture" often make business use one of the most common schemes, that ultimately haven’t been giving the desired result. Indeed, one of the key stages of the process is choosing the best tool for a particular business structuring and asset protection, as well as the selection of the most appropriate jurisdiction.
CONCLUSIONS AND MATERIALS OF THE BUSINESS SEMINAR (password integrites155):
YAROSLAV ABRAMOV, Senior associate of ILF Integrites (Kiev), “Go-ahead Times: Reasons to Think about the Security of Business and Personal Capital Once Again”
LILIA GONTCHAROVA, Senior Associate of the CIS desk from the Loyens & Loeff N.V (Netherlands), “Dutch Tax and Legal Opportunities for Ukrainian Business”
FREDERICK DEACON, Director of Whitmill Trust Company Limited (Jersey), “International Structuring Tools for Ukrainian, Russian & CIS Clients”
ANDREW TERRY, Head of International Corporate Tax and Joint Head CIS Group Withers LLP (London), “International Corporate Structuring and Wealth Planning Issues and Solutions for the Ukrainian Client”