Case Studies

Corporate Services

Corporate Services — a bankruptcy remote structure to facilitate a loan to an investment fund with US assets

Overview

The client, a fund manager required a bankruptcy remote structure to facilitate the conclusion of a loan facility. The collateral assets were US based held by a Cayman fund. The lender required the assets to be held in a bankruptcy remote structure to facilitate clean title in the event of default and independent control to enforce this.

Solution

To meet the lender's requirement, a special purpose vehicle was incorporated; to meet certain tax constraints, a Luxembourg entity was used to be the borrower. The Borrower provided security via a swap arrangement with a Cayman partnership where the partnership is the sole beneficiary of a Delaware trust which ultimately owns the security. A 3rd party trustee was used for the Delaware trust and independent directors were used for the Cayman entities. This gave the lender comfort over the management of the structure.

Corporate Services and Tax Structuring — the acquisition of French real estate

Overview

A Dubai resident wished to purchase a commercial property in France and was looking for a tax efficient way to hold the property.

Solution

A Luxembourg company was incorporated to the hold the property. The company was owned by a Luxembourg insurance policy and debt funded by the beneficial owner to facilitate an interest deduction. The Luxembourg company was able to avail itself of the favourable French tax treatment under the double tax treaty.

Funds Services

Fund services — setting up a fund with minimal cost for a start-up

Overview

A capital introducer was looking for a way to market an institutional fund to include sufficient margin to pay their distribution network.

Solution

A cell was created under our existing Cayman segregated portfolio company which provided a low cost solution to both the set-up and the running costs. The cell invested into the institutional fund with a sales charge applied to pay the distribution network. Using the cell approach, the start-up costs were minimal and the fund was able to mirror the underlying funds' performance.

Fund services – facilitating the pooling of individually funded trading transactions

Overview

An investment manager sourced capital for trade finance on a transaction by transaction basis. This often meant that capital raised did not match either the investment size or the risk profile required by an individual client. It also required the manager to continually raise capital on a deal by deal basis.

Solution

A cell was created under a multi-user segregated cell company, were each trade was held in a separate company underlying the fund. This allowed investors in the fund to diversify across a large number of trades whilst allowing a specific investor to participate in only a portion of one particular trade if required. As the capital was not raised on a deal by deal basis it facilitated it being rolled into the next transaction, leading to quicker deal closure.

Pension and Trust Services

Pension administration – outsourcing pension administration

Overview

A Hong Kong trustee wished to outsource the administration of an occupational retirement scheme to a pension administrator with experience in administering qualifying pensions under Hong Kong's double tax agreements.

Solution

Argyll Management Services used its in-house knowledge to set-up procedures to administer a number of jurisdictions to qualify for tax relief. Individual tax opinions were obtained for many of the jurisdictions to clarify some of the procedural requirements.

Trust services – structuring a client's affairs to avail themselves of the United Kingdom's non domiciliary status

Overview

A French national moving to the United Kingdom wished to minimize their tax exposure on certain non UK investments and also benefit from certain double tax treaties.

Solution

For UK tax purposes the French national was deemed non UK domiciled. A trust was settled to hold the assets with the trustees ensuring that capital and income were segregated. This allowed income earned to be used to invest in non-UK assets tax free.

Pension structuring – structuring a multi-jurisdictional pension with tax advantages

Overview

A client with a large expatriate workforce across Africa, Latin America and Asia wished to provide their staff with a pension arrangement that was transportable and tax efficient should they move to Europe or USA.

Solution

A qualifying occupational Hong Kong pension was established. It was structured so as to qualify under the various double tax treaties Hong Kong has with the OECD countries and registered with the appropriate authorities. The employer was able to contribute to the pension on behalf of their staff from a Hong Kong subsidiary. For the staff they could manage their own pensions and take advantage of Hong Kong's tax treaties that give Hong Kong the exclusive right to tax the benefits and its relatively low tax rates.