Family Business: New era for structuring

International economic substance and transparency are the new drivers for businesses today. Management of succession, control, and structure, seeking a balance between business and family are central to family business continuity. More than ever, with aggressive tax structures being scrutinized, families are looking for knowledgeable and trusted partners to assist them in offering transversal solutions in a 360º service, updating old structures, and adapting to the new international standards and needs.

Maintaining family wealth across generations is many times quite complex, especially with factors such as inter-generational relationships, a legacy of diverse ownership structures, businesses, and assets overseas, residency, and citizenship issues.

Given Amicorp’s global presence and its´ platform with compliant robust products and services, Amicorp is well placed to assist large global families. Migrating to a well-reputed country and finding optimizations in organization and operations, with a simplified and robust structure adapted to the new BEPS/transparency world with substance and good practices guaranteeing the efficient transition of the legacy to the next generation.

OUR ENHANCED SERVICES SOLUTIONS

• GLOBAL: Solutions to address every need for both: family and business.
• ANALYZE: Assurance analysis to check the impact of the new international drivers of transparency and economic substance.
• ADAPT: Optimization to create corporate robustness and improve governance.
• IMPROVE: Check and find efficiencies for costs and processes.
• GROW: Business expansion to grow internationally.
• CONTINUE: Monitor developments and make a plan for the next generation.

“Tax transparency is about putting an end to bank secrecy and tax evasion through global tax co-operation.” —OECD.“Tax transparency is about putting an end to bank secrecy and tax evasion through global tax co-operation.” —OECD.

In the past few years, more than 100 jurisdictions have adopted the OECD’s Base Erosion Profit Shifting (BEPS) project and domestic increasing implementation of Place of Effective Management (POEM) and General Anti-Abuse Rules (GAAR). The intention is to combat tax avoidance by multinationals who are shifting profits from high-tax jurisdictions to entities in low or zero tax jurisdictions without adequate economic substance.

Amicorp can assist you with a BEPS/Substance health test and solutions to adapt the structure to the new international drivers of transparency and economic substance applicable to international structuring.

BEPS/SUBSTANCE HEALTH TEST TO STRUCTURE IMPROVEMENTS

Assurance: Impact assessment report:

BEPS/Substance health test: analysis of the corporate structure, business reasons, and substance identifying impact/risk of the latest changes in regulations and providing recommendations on improvements of the existing structure or alternative structure solutions:

• Where is the Place of Effective Management (POEM)? Local directors and sufficient board meetings?
• Adequate economic substance in the local country: employees, expenditures, premises?
• Are transactions at valid commercial reasons which reflect economic reality?
• Does the entity meet the latest tests to take benefit of a tax treaty or EU Directive?
• Are transfer prices and profits aligned to value creation and adequately documented?

Improvements: Substance & Governance:

• Improve substance: implement Enhanced Corporate Services (ECS) moving towards more corporate robustness
• Improve governance: provide directors to support the Board and to mitigate conflicts of interests with a separation of ownership and management
• Add staff to local payroll and monitor local outsourcing to support the creation of added value
• Company re-organization or re-domiciliation of entities to nearshore and onshore
• Check and improve transfer pricing policies
• Add other benefits: Implement asset protection and wealth preservation plan

Alternative structuring solutions: Check the existing structure and generate business opportunities:

• Find efficiencies in costs, financing alternatives, and processes
• Establishing investment funds, venture capital, trusts, foundations, and securitization vehicles
• Support in issuing bonds or listing to stock exchanges
• Focus on your core business and delegate the non-core to Amicorp
• Grow internationally expanding your business with Amicorp as your trusted business partner

Continuous monitoring:

• Ensure structures/transactions are non-fiscal driven
• Document the business reasons for the various arrangements with a proper defense file
• Continuous monitor legislation developments

Make a plan for a successful transition to the next generation:

• Succession planning: with proper advice for global families
• Governance planning: professionalizing the structure with a family office model with trusted professional
• administration for investment, wealth management, and dispute resolution.

Amicorp can also assist you in adapting the old private structure to the new international drivers managing, protecting, and growing your wealth, and this can include re-evaluating, restructuring, or relocating or other.

For more information, please contact:

Eric Boes - Global Head – Regulatory Reporting and Tax Compliance Services e.boes@amicorp.com

Shweta Aggarwal - Assistant Manager
shweta.aggarwal@amicorp.com