Fund Briefing for Luxembourg, Belgium and the Netherlands

Transcription

1 Fund Briefing for Luxembourg, Belgium and the Netherlands Recent developments in the investment management marketplace January 2012

2 Loyens & Loeff 2012 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or disclosed in any form or by any means (electronic, mechanical, photocopy, recording or otherwise) without the prior written permission of Loyens & Loeff. This briefing is meant to highlight developments and does not purport to be comprehensive or to provide legal or tax advice. Each person should seek advice based on his particular circumstances. Although this publication was composed with the greatest possible diligence, Loyens & Loeff cannot accept any liability for the result of any actions taken on the basis of this information without its cooperation, including any errors and omissions.

3 In this briefing 1. Europe - AIFMD - Directive on Alternative Investment Managers 2 On 21 July 2011 the AIFMD has entered into force. It needs to be implemented by the EU Members States ultimately within two (2) years from that date. The Directive aims to provide for a harmonised European regulatory framework for managers of alternative investment funds. 2. Belgium - New legal framework for Belgian REIT and introduction of institutional REIT status 6 After a large consultation with market participants, Belgium modernizes its REIT legislation and takes this opportunity to introduce the non-listed REIT in its investment vehicles landscape. 3. Luxembourg - The new Law dated 17 December 2010 on undertakings for collective investment and other general changes to the investment fund practice 9 Luxembourg as the as the No.1 worldwide centre for cross border funds was the first to implement the so-called UCITS IV Directive into national law. The article presents the new law and informs about further enhancements and developments in Luxembourg fund law and regulation. 4. Benelux - Application of DTTs and BITs to Benelux collective investment schemes 14 With its strong network of DTTs and BITs, the Benelux is a worldwide leader in this field. This article discusses DTTs and BITs in the investment fund context. 5. Benelux - Islamic funds and the Benelux: a perfect match 19 This article sets out why the Netherlands and Luxemburg are highly suitable jurisdictions for the setting up Islamic funds. 6. Other developments 22 Recent developments in Dutch, Belgian and Luxembourg regulatory and tax legislations that are relevant for the fund practice. Annex 1: table comparing the main fund regimes and fund vehicles in Luxembourg, Belgium and the Netherlands 28 The annex contains a table comparing the main alternative fund regimes in Luxembourg, Belgium and the Netherlands: the SIF, SICAR, FBI, VBI, PRICAF Privée and Institutional SICAV. In addition, a second table compares certain legal regimes that may be used as special purpose fund vehicles (either with or without application of a fund regime). The table does not cover EU coordinated undertakings for collective investment in transferable securities (UCITS). Loyens & Loeff Fund Team 32 Contacts 35

4 1. AIFMD - Directive on Alternative Investment Managers Introduction Scope On 11 November 2010, the European Parliament adopted the proposal for a directive on Alternative Investment Fund Managers (the Directive). The Directive aims to provide for a harmonised European regulatory framework for managers (or AIFM) of alternative investment funds (AIF). Other than those parts of the Directive that relate to third countries, the Directive will have to be implemented into national law within two (2) years from the date on which it enters into force. The implementation deadline for the Directive is expected to be during first half of Certain grandfathering provisions will apply. The Directive applies to AIFMs established in a Member State of the European Union which manage one or more alternative investment funds irrespective of where such funds are established. In addition, the Directive applies to AIFM that are established outside of Europe to the extent that they manage alternative investment funds established within the European Union, or market alternative investment funds (wherever these funds are located) to European investors. In this respect it is relevant to note that the working assumption under the Directive is that an AIFM has legal personality. An alternative investment fund is defined as a collective investment undertaking, or its compartments, which is not covered by the Directive 2009/65/EC (Undertakings for collective investment in transferable securities (UCITS)). The following AIFM are exempt from the Directive: (i) AIFM whose only investors are their parent undertakings, their subsidiaries or other subsidiaries of their parent undertakings provided that none of those investors itself is an AIF (intra-group exemption); (ii) AIFM that directly or indirectly (through a company with which the manager is linked by common management or control, or by a substantive direct or indirect holding) (a) manage AIF portfolios whose assets under management, including any assets acquired through the use of leverage, in total do not exceed EUR 100 million, or (b) manage portfolios of AIFs whose assets under management in total do not exceed EUR 500 million when the portfolio consists of AIF that are not leveraged and have no redemption rights exercisable during the first five (5) years following the initial closing of such AIFs (de minimis exemption). Pursuant to the Directive the management and marketing of alternative investment funds will as a general rule require prior authorisation. 2 loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

5 Ongoing obligations Depositary In case the Directive applies, it imposes various ongoing obligations in addition to the prior authorisation. A few of the most important of these are summarised below. The Directive provides that the European Commission and the European Securities and Markets Authority (ESMA) will draw up further rules specifying many of the ongoing obligations. Valuation In short, the manager must ensure that a single depositary is appointed for each AIF it manages. The depository functions comprise the safekeeping of the AIF s assets and the day-to-day administration of assets. The Directive differentiates in the depositary s safekeeping tasks depending on the type of assets. Where the assets of the AIF can be held in custody, the depositary must hold all financial instruments that can be registered in an account opened in the depositary s books within segregated accounts and must hold all physical financial instruments. Where the assets of the AIF can not be held in custody, the depositary must verify the ownership of such assets and must maintain a record of those assets. The depositary must monitor the AIF s cash flows. The manager must ensure that, for each AIF it manages, appropriate and consistent procedures are established for the proper and independent valuation of the assets of the AIF and that the net asset value (NAV) of the AIF s assets per share or unit is calculated and disclosed to investors. The valuation may either be performed by the manager or by an independent external valuer. Where the manager carries out the valuation, the manager must ensure the (functional) independence of the portfolio management and valuation function. Prudential supervision / organisational requirements The AIFMD imposes a large number of ongoing prudential and organisational requirements on AIF managers, such as requirements with regard to: - risk management; - investment in securitisation positions: the European Commission plans to draw up additional rules regarding the holding of securitisation positions by AIFs; - organisational requirements; - liquidity management; and - capital requirements. In addition, the Directive requires AIFM to have remuneration policies and practices that promote sound and effective risk management. The Directive contains detailed rules on the substance of these policies and practices, such as regarding guaranteed bonuses and the obligation to pay out a substantial portion of any variable remuneration in participations or shares, or equivalent interests, in the relevant AIF. loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

6 Disclosure to investors Portfolio company disclosure A manager is required to disclose certain information to investors of each EU AIF it manages and for each AIF it markets in the European Union. Such information relates, inter alia, to the AIF s investment strategy and objectives, techniques it may employ and associated risks, the use of leverage and collateral, investment restrictions, procedures for changing the investment strategy and policy, the main legal implications of the contractual relationship entered into for the purpose of investment, the identity of service providers and a description of their duties and the investors rights, a description of delegated functions and potential conflicts of interests in that respect, valuation procedure and pricing methodology, a description of liquidity risk management and redemption arrangements, etc. Additional disclosure and notification requirements apply, amongst others, for managers of AIFs which acquire control of non-listed companies or issuers (companies that are admitted to trading on a regulated market) having their registered office in the European Union. Notification of interests in non-listed portfolio companies When an AIF acquires, disposes or holds shares of a non-listed portfolio company which has its registered office in the European Union, the AIF manager is obliged to notify its competent authority (within 10 working days) of the proportion of voting rights held in the non-listed portfolio company, at any time when that proportion reaches, exceeds or falls below the thresholds of 10%, 20%, 30%, 50% and 75% (respectively). Disclosure in relation to controlling interests in portfolio companies The Directive poses additional transparency requirements on managers managing AIFs which acquire control over non-listed companies or issuers. In respect of non-listed companies, an AIF is deemed to acquire control if it either individually, or jointly together with other AIFs on the basis of an agreement, has more than 50% of the voting rights of the portfolio company (thereby taking into account voting rights held by related parties). As for issuers, control is defined by reference to the Directive 2004/25/EC (Takeover Directive). In most Member States this will entail around 30%, but this may vary across the EU and ranges from 25% to 66%. 4 loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

7 The manager of an AIF must notify the acquisition by the AIF of control over a nonlisted company (and certain ancillary information) to: - the non-listed company; - the shareholders of which the identities and addresses are available to the manager or can be made available by the company or through a register to which the manager has or can obtain access; - the competent authority of the home Member State of the manager; and - the manager has to use its best efforts to ensure that the employee representatives (or employees) of the non-listed company are informed. Confidential information need not to be disclosed to employees in cases where disclosure of the information could damage the company. Asset stripping The Directive imposes restrictions on distributions to shareholders (including distributions of profits, capital reductions and share redemptions) and to purchases of own shares by EU portfolio companies (both non-listed companies and issuers) controlled by an AIF during the first two years after acquisition of control by the AIF. Pursuant to the Directive, the manager is not to be allowed to facilitate, support or instruct any of the actions prohibited by the relevant provision, nor can it vote in favour of and it must use its best efforts to prevent such actions. loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

8 2. New Legal framework for Belgian REIT and introduction of institutional REIT status Introduction The Royal Decree of 7 December 2010 on REIT (SICAFI / Vastgoedbevak) modifies the regulatory regime applicable to REITs by abolishing and replacing the royal decrees of 10 April and of 21 June It also introduces the status of institutional REIT (SICAFI institutionelle / Institutionele vastgoedbevak). The Royal Decree is entered into force on 7 January 2011 and contains a series of transitional measures and grandfathering clauses. The key changes are summarised below and in the enclosed newsletter. Key changes for public REIT (SICAFI / Vastgoedbevak) Actors The Royal Decree defines the role and duties of the promoter and now explicitly provides that the requirement of 30% minimum float is a permanent best efforts obligation of this promoter. The Royal Decree also contains specific provisions dealing with the independence of the external real estate appraiser (e.g. rotation requirements). The obligation to designate a custodian is abolished. Investment policy The list of eligible investments is enlarged by adding e.g. the intermediary holdings, the shares of EEA REITs and rights deriving from financial leases as defined by IRFS standard (IAS 17), and analogous rights of use. This last type of investment is added with a view to allow public REITs to participate in public-private partnerships for which a right in rem is not always granted to the private partner. Investment policy and risk diversification must be assessed on a consolidated basis, with a distinction to be made between exclusively controlled subsidiaries and joint subsidiaries. In the interest of the public REIT s investors, the Royal Decree also provides for specific limits with respect to subsidiaries which share capital is not totally held by the public REIT (e.g. maximum of minority interest, compulsory put & call options). Access to capital markets The Royal Decree modifies the legal regime applicable to capital increases and allows for a shortening of the subscription period to three listing days provided that a series of conditions protecting the existing shareholders are met. 1 2 Arrêté royal du 10 avril 1995 relatif aux sicaf immobilières / Koninklijk besluit van 10 april 1995 met betrekking tot vastgoedbevaks. Arrêté royal du 21 juin 2006 relatif à la comptabilité, aux comptes annuels et aux comptes consolidés des sicaf immobilières publiques, et modifiant l arrêté royal du 10 avril 1995 relatif aux sicaf immobilières / Koninkijk besluit van 21 juni 2006 op de boekhouding, de jaarrekening en de geconsolideerde jarrekening van openbare vastgoedbevaks, en tot wijziging van het koninklijk besluit van 10 april 1995 met betrekking tot vastgoedbevaks. 6 loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

9 The shortening of this subscription period should facilitate the access to the capital markets and result in the public REITs being less exposed to volatility and discounts. The public REITs are now also allowed to distribute an optional dividend and to issue securities other than shares (profit sharing certificates remaining excluded). Leverage Public REITs remain subject to a double leverage limit: a debt-to-asset ratio of 65% on both statutory 3 and consolidated level 4 ; an interest ratio of 80%, i.e. the interest expense of the REIT and its subsidiaries cannot represent more than 80% of the operational and financial income. The public REIT is now obliged to actively manage its consolidated indebtedness as it must present a financial plan in case this consolidated debt-to-asset ratio exceeds 50%. Restrictions also apply as to collateral. Distributions Public REITs are obliged to distribute the positive difference between 80% of their net operational result 5 and the net decrease of their indebtedness, subject to the provisions of the Belgian Company Code on capital protection 6. The Royal Decree provides for a detailed computation chart of these amounts and for distribution restrictions in case of deviating indebtedness ratio. Institutional REIT (SICAFI institutionnelle / Institutionele vastgoedbevak) Companies investing in real estate that are controlled exclusively or jointly by a Belgian public REIT can now apply for the status of regulated and nonlisted 7 investment vehicle in real estate, namely the institutional REIT (SICAFI institutionnelle / Institutionele vastgoedbevak). Other shareholders must have the status of institutional investors. This status of institutional REIT permits asset management, cash flows and tax optimisation. It will also allow the development of joint ventures between public REIT and institutional investors, e.g. in the scope of public-private partnerships. Even if the institutional REIT is subject to a less stringent regulatory regime, it remains subject to the supervision of the CBFA 8. The key requirements are as follows: the same list of eligible investments applies but without risk diversification requirement; similar distribution requirements apply; even if the institutional REIT is not subject to these requirements, the risk diversification and the leverage limit are to be assessed on a consolidated basis at the level of the public REIT This leverage limit will enter into force 12 months after entry into force of the Royal Decree. Under deduction of authorized hedging instruments. Realized capital gains may be exempted from distribution obligations subject to reinvestment within a 4-year period. Article 617 of the Belgian Companies Code. Listing is theoretically possible provided that the institutional REIT takes the necessary measures to reserve the subscription to institutional investors. Commission bancaire, financière et des assurances / Commissie voor het Bank-, Financie- en Assurantiewezen. loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

10 The status of institutional REIT is not optional meaning that the public REIT must choose between having all its subsidiaries subject to this status or not 9. Once a public REIT holds an institutional REIT and acquires or incorporates another company, this last has a 24-month period to apply for the institutional REIT status. Accounting aspects Public and institutional REITs apply in their statutory and consolidated financial statements the IFRS-IAS standards. But the scope of application of these standards is broadened to regulatory requirements (e.g. compliance with requirements to be assessed on a consolidated basis as determined by IFRS, definition of faire value and lease). Tax aspects The Royal Decree does not contain tax provisions. The tax regime applicable to public REIT shall also apply to institutional REIT (including the exit tax) Subject to grandfathering clause: this obligation does not apply to subsidiaries held prior to or at 1 January It being understood that the subscription tax amounts to 0.08% for public REIT and 0.01% for institutional REIT. 8 loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

11 3. Luxembourg: The new Law dated 17 December 2010 on undertakings for collective investment and other general changes to the investment fund practice Introduction On 17 December 2010 the new Luxembourg law on undertakings for collective investment (the 2010 Law) was enacted. It entered into force on 1 January The 2010 Law repeals, subject to a grandfathering of certain articles until 1 July 2012, the law dated 20 December 2010 in undertakings for collective investment (the 2002 Law). The main purpose of the 2010 Law was to implement Directive 2009/65/EC of the European Parliament and of the Council of the European Union of 13 July 2009 (the Directive 2009/65/EC known as UCITS IV) into Luxembourg law 11. As was the case with the Directive known as UCITS I Directive in 1985 and the Directive known as UCITS III in 2001, Luxembourg was the first country in the EU to implement the new measure in national law 12. UCITS IV implementation In addition to implementing UCITS IV Luxembourg, as the No.1 worldwide centre for cross border funds, took the opportunity to introduce a number of other changes to its current investment fund legislation concerning both UCITS and other UCI (non- UCITS). Moreover within the last months Luxembourg authorities such as the CSSF changed their practice in relation to certain aspects, e.g. the formal procedures with the CSSF, which are important to know when doing business in Luxembourg. Key elements of the UCITS IV implementation UCITS IV has been implemented into Luxembourg law in as flexible a way as possible. Its main improvements in comparison with the currently applicable UCITS regime are the following: At the same time the Luxembourg Supervisory Authority, the Commission de Surveillance du Secteur Financier, (the CSSF) has issued Regulation N 10-4, implementing Commission Directive 2010/43/EU implementing Directive 2009/65/EC as regards organisational requirements, conflicts of interest, conduct of business, risk management and the contents of agreements between a depositary and a management company; and CSSF Regulation N 10-5, implementing Commission Directive 2010/44/EU implementing Directive 2009/65/ EC as regards certain provisions concerning fund mergers, master-feeder structures and notification procedure. All EU member states must transpose UCITS IV into national law until 1 July loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

12 1. A simplified and accelerated notification procedure for cross-border distribution under the so-called EU passport for UCITS funds (2010 Law, Part I, Chapters 6 and 7). The procedure follows a regulator-to-regulator communication and a public distribution of a UCITS in another EU member state is (in general) allowed within 10 days after the notification to the UCITS home member state. 2. General formalised provisions relating to UCITS mergers (2010 Law, Part I, Chapter 8). The provisions cover both domestic and foreign mergers to take place between one or more UCITS or sub-funds/compartments thereof (merging UCITS) and a receiving UCITS or sub-fund/compartment (receiving UCITS). 3. Possibility of master-feeder UCITS structures (2010 Law, Part I, Chapter 9). To be deemed a UCITS master-feeder, as a main requirement a feeder should invest at least 85% into a single master. 4. A short standardised document summarising key investor information per sub-fund/compartment and/or unit/shareclass of a UCITS (the KIID), to be updated at least 35 business days after the 31 December each year and prior or following material changes of its content (2010 Law, Part V, Chapter 21). The KIID replaces the simplified prospectus of UCITS 5. Introduction of a so-called EU passport for UCITS management companies permitting to perform in another member state all activities it has been authorized for including setting up and managing UCITS (2010 Law, Part IV, Chapter 15). 6. Reinforcement of regulatory requirements - this includes inter alia increased minimum regulatory requirements for management companies and service providers in relation to administrative procedures and control mechanisms, accounting procedures, treatment of conflict of interest, general rules of conduct and the risk management - and strengthened cooperation between national supervisory authorities (e.g. regulator-to-regulator communication) (inter alia 2010 Law, Chapter 20). Grandfathering transitional provisions All Luxembourg UCITS and management companies under chapter 13 of the 2002 Law become subject to the 2010 Law on 1 July However Luxembourg UCITS which have existed under the 2002 Law before such date will have until 1 July 2012 to comply with the new delegation rules, certain transitional provisions will apply. In addition thereto all UCITS which opt to remain under the 2002 Law and continue to use a simplified prospectus after 1 July 2011 must replace the simplified prospectus with a KIID until 30 June 2012, which is also the overall grandfathering deadline for replacing the simplified prospectus under UCITS IV. All other UCI and all other management companies will be subject to the 2010 Law from 1 January Other important changes in the 2010 Law 1. Cross sub-fund investments A sub-fund may in future invest in one or more other sub-funds under the same umbrella (UCITS and other UCI). However, the duplication of management fees is not permitted in this context (unlike investments in another UCITS, where there is no such prohibition, though the maximum proportion of management fees charged must be disclosed). 10 loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

13 2. Management regulations are subject to Luxembourg law For clarification purposes, in particular concerning the residency of common funds managed cross-border (UCITS and other UCI), the 2010 Law requires the management regulations of such common funds to be subject to Luxembourg law. 3. Mergers of UCITS The receiving or absorbing UCITS is granted additional flexibility for a period of six months in relation to certain investment restrictions. 4. UCITS and other UCI organised as investment companies: transfer of annual reports, record date, translation of articles of association a) It is no longer necessary to send shareholders the annual report etc., together with convocations to an ordinary general meeting. b) The board of directors may fix a date five days before an ordinary or extraordinary general meeting as a reference point by which to measure attendance rights and quorum and majority requirements (record date). c) Abolition of the requirement to translate articles of incorporation drawn up in English into German or French for purposes of registration with the Luxembourg Register of Commerce and Companies. 5. Regulatory measures a) The authorisation for one sub-fund under an umbrella (UCITS and other UCI) may now be withdrawn, without entailing the withdrawal of the authorisation of one or all the other sub-fund(s) under that umbrella and/or the entire umbrella. b) When delegating functions to third parties, other UCI and non-ucits management companies (2010 Law, Chapter 16) are subject to the same requirements as UCITS and UCITS management companies (2010 Law, Chapter 15). In particular, asset management functions may only be delegated to authorised investment managers subject to prudential supervision. In the case of a non-eu manager, there must also be a cooperation agreement between Luxembourg and the other national supervisory authority concerned. Management may not be delegated to the depositary. 6. Taxation a) Foreign UCITS and other UCI managed by a Luxembourg management company are expressly exempt from Luxembourg taxation. b) Non-resident investors (including feeder funds) making profits from the sale of shares in a corporate UCITS or other UCI are no longer subject to taxation in Luxembourg. This applies also to the sale of shares/ participations in SICAR and corporate SIF. c) The following are exempt from capital duty (taxe d abonnement): - UCITS or other UCI which are listed on a stock exchange/traded on a regulated market or replicate the performance of one or more indices (this means that in particular exchange traded funds are also exempted from capital duty). - UCITS or other UCI and their sub-funds which are reserved for pension funds (this was already the case under the 2002 Law, but only for pension funds of the same group). - UCI and their sub-funds whose main objective (over 50%) is to invest in microfinance institutions. loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

14 Further changes/regulation 1. CSSF Circular 11/ The CSSF Circular 11/512 follows the earlier CSSF Regulation N 10-4 as well as further ESMA 14 clarification and deals with the main regulatory changes with respect to the risk management to be employed and presented in UCITS. One important change in relation to the documentation is that a UCITS must now, inter alia, include information in the prospectus (i) on the global exposure determination methodology, making a distinction between the commitment approach, the relative Value at Risk (the VaR) or the absolute VaR approach, (ii) the expected level of leverage, as well as the possibility of higher leverage levels (for UCITS using a VaR approach) and (iii) information on the reference portfolio for UCITS using the relative VaR approach. This information shall be included in the prospectus during an update of the same which shall occur by 31 December 2011, at the latest. Our current information is that it needs not to be the first update within this time frame. 2. Filing Forms In order to standardise the documentation to be provided to the regulator, the CSSF implemented the following forms: a) Application questionnaire for the approval of a SICAR b) Application questionnaire for the approval of a UCITS/UCI/SIF c) Application questionnaire for the approval of a new sub-fund/compartment of a UCITS/UCI/SIF d) Form of declaration of honour to be filled in by persons/entities foreseen as manager/director of UCITS/UCI/SIF (including the respective management company) and SICAR 3. One fund management company (2010 Law, Chapter 16) Finally, the extraordinary fiscal advantage (no taxation) of management companies under Chapter 16 of the 2010 Law, before Chapter 14 of the 2002 Law, managing only one UCI or SIF has been abolished with effect as of 1 January The background for this change in fiscal practice seems to be the end of the last grandfathering for the companies under the Holding 1929 regime (also with effect as of 1 January 2011) The CSSF also issued Circular 11/508 on New provisions applicable to Luxembourg management companies subject to Chapter 15 of the Law of 17 December 2010 relating to undertakings for collective investment and to investment companies which have not designated a management company within the meaning of Article 27 of the Law of 17 December 2010 relating to undertakings for collective investment and Circular 11/509 on New notification procedures to be followed by a UCITS governed by Luxembourg law wishing to market its units in another Member State of the European Union and by a UCITS of another Member State of the European Union wishing to market its units in Luxembourg. The European Securities Market Authority (the ESMA), authority which replaced the Commitee of European Securities Regulators (CESR). 12 loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

15 Conclusion Main elements of the legal framework and administrational practice of investment funds in Luxembourg have been amended during the past months. Not only that Luxembourg was extremely fast in transposing the UCITS IV Directive into national law but it has also enhanced other elements. A main objective was to strengthen Luxembourg as a stable, credible and reliable but also innovative and service orientated key player in the world wide investment fund business and to show that additional regulation is understood and implemented as an opportunity for the future. We strongly believe that Luxembourg will be acting based on the same principles when the so called Alternative Investment Fund Managers Directive (AIFMD) is to be transposed into national Law in the near future. loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

16 4. Benelux: application of DTTs and BITs to Benelux collective investment schemes The latest available data from the EFAMA Quarterly Statistical Release of May 2011 show that the aggregate number of UCITS funds domiciled in Belgium, Luxembourg and the Netherlands (the Benelux ) represents EUR m 2,020,149 net assets under management and that the aggregate number of non-ucits funds domiciled in the Benelux represents EUR m 2,362,202 net assets under management. These impressive numbers explain why the Benelux is the leading European funds jurisdiction in terms of domiciliation and distribution of collective investments schemes (the CIS ), which include UCITS funds and non UCITS funds. Since a substantial part of the assets of the Benelux CIS are located outside of the Benelux, most of the Benelux CIS are involved in cross border transactions. In this (crossborder) context, tax efficiency and protection of the CIS s investments, through the use of bilateral tax treaties for the avoidance of double taxation and fiscal evasion (the DTTs ) as well as bilateral investment treaties (the BITs ), are crucial. Application of DTTs to CIS In order to remain attractive jurisdictions for CIS we have noted, over the last years, the Benelux governments, in particular the Dutch and the Luxembourgish ones, being very active in negotiating DTTs as well as BITs with new countries, especially in emerging markets. As of the date of this article almost 240 DTTs and almost 200 BITs entered into by the Netherlands and Luxembourg are in force and many are under negotiation. The purpose of this article is to outline the conditions under which CIS may benefit from the application of DTTs and BITs. a) What is a DTT and which benefits do DTTs provide? Double tax treaties are bilateral treaties signed by two states to avoid their residents becoming subject to double taxation or to no taxation at all with regard to income realized in relation to cross border activities carried out in and cross border investments made in the other state. Most Benelux DTTs are based on the OECD Model Tax Convention issued by the Organization for Economic Cooperation and Development ( OECD ). As Luxembourg and the Netherlands both combine a large DTT and BIT network with a competitive local tax climate, Luxembourg and the Netherlands are often used as fund or holding jurisdictions for cross border investments made by investors all over the world. b) Scope of application of DTTs (residents & direct taxes) Residents are entitled to the advantages of a DTT. Most Benelux DTTs define resident of a state as a person that is subject to tax in that state by reason of residence or place of management but exclude persons who are liable to tax in 14 loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

17 that state only with regard to income derived from certain sources. Residents are not only individuals, but also include companies and any other bodies of persons. DTTs in general apply to direct taxes like corporate and individual income tax, dividend withholding tax but do not apply to indirect taxes like VAT. In general a resident of one state (Resident State) should not be subject to double taxation with regard to activities carried out in or income received out of the other state (Source State) with which the DTT has been concluded. In short it is typically the Resident State that may levy tax, unless a permanent establishment is established in the other state, real estate is present in the other state or under certain other circumstances in which case the Source State may levy (withholding) taxes on dividends, royalties and interest distributed out of the Source State to a resident of the other state. In general, the Resident State needs to provide double taxation relief for the tax that is levied on these sources by the Source State. i) Tax residency and permanent establishment under DTTs As mentioned, the general rule is that the Resident State may levy taxes. However, if a permanent establishment is present in the Source State, the Source State may levy tax with regard to income that is attributable to that permanent establishment and the Resident State should provide relief from double taxation. For an establishment to be regarded permanent a fixed place of business through which the business of an enterprise is wholly or partly carried out should be present. When the enterprise in the Source State is carried out through a legal entity that is located there, this enterprise is in principle not regarded to be a permanent establishment. Only if the enterprise is not carried out in a separate legal entity, the permanent establisment rules apply. To determine the profits that are attributable to a permanent establishment, it should be established which profits the permanent establishment would have realized, would it have been a separate and independent entity that interacts with other enterprises at arm s length prices. ii) Limitation of benefits and beneficial owner concept under DTTs As both the Netherlands and Luxembourg have the beneficial combination of a large BIT and DTT network and an attractive local tax climate, some other countries, for example the US, want to avoid that investors abuse the Netherlands and Luxembourg to become entitled to DTT benefits under the relevant treaty, where if they make the investment directly they would not be entitled to the DTT benefits. For that reason some DTTs include a limitation of benefits clause. This clause adds additional requirements for a resident to be entitled to (certain) DTT benefits. In addition, a resident of a state is often only entitled to tax reduction in the Source State with regard to dividends, interest and royalties if the resident is also to be regarded the beneficial owner of the income. In short a person is to be regarded the beneficial owner if he is free to decide what to do with the funds and investments and/or the received yields. loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

18 c) How do DTTs apply to CIS? Whether or not CIS are entitled to the benefits of DTTs should be determined on a case-by-case basis. First of all it should be determined whether the CIS can be regarded a person that is resident in Luxembourg or the Netherlands. If the CIS is a corporate entity an SA, an SARL, a BV or NV, etc. it is in general subject to tax in Luxembourg or the Netherlands with regard to its worldwide income and for that reason it can in general be regarded a resident for DTT purposes. This is however not always the case if certain local fund regimes apply, like the Luxembourg SIF and the Dutch VBI regime. Treaties may however deviate from the general wording and nevertheless include these, which is the case with regard to the SIF in many Luxembourg tax treaties. In stead of being a corporate entity, a CIS could also be a formed as a partnership or other entity without legal personality. A partnership is in general regarded a person for DTT purposes. To determine whether such a CIS is entitled to the DTT benefits, it should be established whether the partnership is subject to tax. All states apply different national rules to determine whether this is the case. If so, it is regarded a resident for application of the DTT and should be entitled to the benefits of the DTT. If the CIS is regarded transparent for tax purposes, the CIS is disregarded for tax purposes. If both the source and the resident state regard the CIS tax transparent it cannot claim DTT benefits but in stead the investors in the CIS should be able to claim benefits under the relevant DTTs. Application of BITs to CIS Both the Resident State and the Source State approach the CIS from their own perspective so if the Resident State of the CIS regards the CIS to be a corporate entity for tax purposes and the Source State disregards the CIS for tax purposes or vice versa, double taxation or less than double taxation might arise as a consequence of this mismatch. Hence careful planning is required to avoid such mismatches. a) What is a BIT and which benefits do BITs provide? Investment protection, through the use of BITs, plays an important role in modern structuring of international transactions. A BIT is an agreement between two states which aims at providing legal protection of the investors and their investments in the contracting states (the Contracting States ). The main advantages of BITs are that they impose binding obligations on the Contracting States and provide for effective judicial remedies against the Contracting States in case of breach of those obligations. In the event of such breach, Investors which are eligible to benefit from the application of BITs will be entitled to fair compensation which can represent a useful weapon to negotiate with the relevant Contracting State. In practice, BITs offer valuable legal protection for investments in sensitive sectors (such as natural resources, infrastructure, land and real estate) in countries with high political risk and in circumstances of political and legal instability. 16 loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

19 b) Regime of BITs i) Scope of application of BITs BITs apply to selected investors, specific investments and within the boundaries of a defined territory. Investors which may claim the benefit of a BIT are generally: either natural persons with the nationality of a relevant Contracting State, or the legal persons incorporated under the laws of a relevant Contracting State, or the legal persons controlled, directly or indirectly, by such persons. Investments which are in the scope of BITs are investments located within the territory of a relevant Contracting State. They are often defined broadly and thus comprise any kind of asset including but not limited to property and rights with a proprietary character, rights derived from securities, claims to money or any performance having an economic value, Intellectual Property rights, rights granted under public law or contract. ii) Treatment of investors under BITs Although a Contracting State has a discretionary power to set any rule and take any measure (e.g. to levy tax and/or exempt from tax, to grant judicial damages or rights in extraordinary circumstances, to impose or exempt from restrictions on investment acquisition/payment/transfer) which will apply to the investors of the other Contracting State, BITs impose on such Contracting State the respect of certain principles, such as the non discrimination principle, in the treatment of investors from the other Contracting State. Based on the principle of non discrimination, investors will be entitled to the most favorable of the following two rules: i) either a national treatment whereby a Contracting State may not treat investors from the other Contracting State less favorably than its nationals, ii) or the most favored nation treatment whereby a Contracting State may not treat investors of the other Contracting State less favorably than other foreign investors. iii) Expropriation of investments under BITs In practice, acts of expropriation and nationalisation are circumstances under which the application of BITs is most relevant to protect investments. Although BITs generally do not prohibit expropriation or nationalisation, they impose strict requirements on their implementation. Thus a Contracting State may generally only expropriate or nationalise investments if: i) it is made in the public interest and under due process of law, ii) it is not discriminatory or contrary to any obligation imposed on the relevant Contracting State, and iii) it is made in return for the payment of an adequate, prompt and effective compensation. loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

20 iv) Settlement of disputes under BITs Key to the effective protection of investments through the application of BITs is the settlement of disputes by means of international arbitration. BITs give the relevant investors with a right to arbitration in any dispute with a Contracting State. The execution and entry into force by a Contracting State of a BIT implies that for any dispute the settlement via an international arbitration proceeding (under international rules and conventions) may be directly imposed on the Contracting State, at the request of the relevant investor. By this means, the relevant investor will benefit from an alternative to the settlement of its dispute through the domestic judicial proceedings (in the offending Contracting State). In addition, there is generally no requirement that an investor must have exhausted all domestic remedies prior to initiate arbitration proceedings under a BIT. The arbitral award to be given will be binding on the relevant Contracting State and the investor. c) How do BITs apply to CIS? Based on the definition of investor under c) above, a CIS incorporated under the laws of the Netherlands or the Grand Duchy of Luxembourg or controlled, directly or indirectly, by a legal person incorporated under the laws of the Netherlands or the Grand Duchy of Luxembourg[or an individual resident in the Netherlands or the Grand Duchy of Luxembourg], would qualify as investor under most of the BITs to which the Netherlands and the Grand Duchy of Luxembourg are party. BIT protection may directly apply to cross-border investments in countries when the CIS is established in one of the Contracting States. If the investments of the CIS are not covered by a BIT concluded by its own state, the CIS can shop for BIT protection: it can enjoy the protection of BITs concluded by foreign countries by routing its investments through these countries. This can be achieved in two ways: the CIS can opt to make the investment directly via a legal person incorporated under the laws of the relevant Contracting State or, alternatively, it can make its investments in the relevant Contracting State indirectly through a foreign legal entity that is fully owned by a legal person from the relevant Contracting State. 18 loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

21 5. Islamic funds and the Benelux: a perfect match Introduction Since the 2008 financial crisis, the Islamic fund industry has once again been experiencing significant growth over the past year or so. It is roughly estimated that at least 300 Islamic funds have been set up to date. The demand for Islamic finance is said to once again be growing with double digits. In the wake of the recent difficult financial climate, Islamic investors seem to prefer a stable investment climate and greater diversification of their investments. Following this trend, Islamic funds are increasingly structured as onshore (regulated) funds instead of offshore (unregulated) funds. Both Luxembourg and the Netherlands provide a flexible legal, regulatory and tax framework that suits the changing investor requirements. Combining both Islamic finance and investment management expertise, Loyens & Loeff is and has been successfully involved in the setting up and launching of several Islamic funds. Based on that experience, we expect the demand for Islamic funds to continue growing, also since a growing proportion of international investors actively seek Islamic fund investments alongside conventional funds. Basic Islamic principles Below we have included a very brief summary of some of the basic factors to take into account when setting up an Islamic fund. Islamic funds can invest in a wide range of assets such as real estate assets (note that the leverage allowed in respect of such real estate assets is limited, see further below), equity interests, Ijara (lease), commodity, Murabaha (cost plus sale) or a combination of assets, as long as they comply with Islamic finance principles. The key prohibitions that should be taking into account when structuring an Islamic fund are as follows: (a) Riba is the Arabic word for excess and is commonly explained as a ban on paying interest and other fixed guaranteed returns on money. An excess amount for the exchange of commodities which cannot be considered as a return for a specific risk is also considered as riba. (b) Gharar is the Arabic word for deceit. In practice this means that no significant element of avoidable uncertainty may be included in any transaction. The sale of property which one does not own is for example not allowed, but a private equity investment in a company is allowed. (c) Maysir refers to the ban on speculation and gambling. As a consequence, many conventional derivatives and options, and even insurance, may fall foul of this prohibition. loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

22 In addition to the above general prohibitions, the following specific principles must also be taken into account: (a) The return on investment must be linked to actual profits of such investment (asset-backed, not asset-based). However, the return can under certain circumstances be capped by reference to a pre-agreed and well-defined benchmark. (b) The investment must satisfy a so-called industry or sin screen. This means that the underlying business activity must be halal, i.e. may not be connected with the manufacture or sale of products such as alcohol, weapons, insurance, adult entertainment, gambling or conventional banking. (c) The investment must satisfy a financial screen, in that they must satisfy certain financial covenants. The main financial covenants are: (i) debt to market capitalisation ratio (usually 33% to 50%), (ii) interest income to total revenues (usually 5% to 15% limit) and (iii) accounts receivable to total assets (usually less than 45%). (d) Investors in an Islamic fund must be treated equally. However, a fund can be divided into classes and/or sub-funds, provided that the investors in each subfund are treated equally. Potential investments which do not satisfy the above criteria must be avoided. If existing investments do not satisfy the above criteria but are in the portfolio of an Islamic fund, one solution is the purification process, as accepted by most Islamic scholars. In such purification process, profits that originate from non-compliant investments should be donated to charity. Due to the Shari a restrictions, Islamic funds generally achieve less diversification than conventional funds. However, the Islamic finance industry is actively working on expanding suitable Islamic investments to be offered to investors as an alternative to conventional funds. Generally, Islamic funds appoint a so-called Shari a board consisting of three or more Shari a scholars, in order to ensure Shari a compliance and monitor and approve the fund s investments on an ongoing basis. The Shari a board can be installed at different levels in a corporate or common fund structure. An external Shari a board can also be used where necessary. It is estimated that around 50% of the existing Islamic funds have an external Shari a board. Some nominated contracts used for Islamic funds Islamic funds can be structured using one or more of nominated contract forms. The most commonly used contracts for the establishment of an equity fund are for example: Mudarabah. The most common structure used for Islamic equity funds is using the nominated contract known as Mudarabah. A Mudarabah contract can be compared to a limited partnership. Investors (the Rabb-al-Mal) provide capital and an asset manager (the Mudarib) manages the assets in exchange for a (capped) share in the profits (management and performance fees can also be agreed to). 20 loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

23 Losses should be borne by the Rabb-al-Mal only, except if caused by negligence or violation of terms of the contract by the Mudarib. The Mudarib goes unrewarded for his efforts in case of a loss. Comparable to a limited partner, the Rabb-al-Mal has no (direct) control over the management of the fund. Musharaka. Islamic equity funds can also be set up using Musharaka. Musharaka is similar to a joint venture or general partnership. Partners are free to determine how profits are allocated but losses are allocated pro rata to their contributions. Management of a Musharaka can be carried out by one or more investors or outside parties. Islamic funds and the Benelux It is important to note that interpretations differ regarding many of the relevant Shari a principles between different Shari a boards and different regions. Although several organisations seek to unify Islamic finance, each transaction may have its own specific issues. Before structuring an Islamic fund structure, it is therefore essential to understand the requirements of the targeted investor audience thoroughly. Both Luxembourg and the Netherlands are highly suitable jurisdictions for setting up any type of Islamic fund. In Luxembourg, the tax authorities have confirmed on 12 January 2010, by way of circular, the tax treatment (income tax) of Islamic finance techniques and instruments. It has further, on 17 June 2010, issued a second circular clarifying the tax treatment of Murabaha and Ijara for transfer tax and VAT purposes. Their legal, regulatory and tax frameworks provide the necessary flexibility for implementing the Islamic requirements set out above. In addition, the tax authorities can provide certainty in advance in the form of an advance tax ruling. The most efficient structure should be determined on a case-by-case basis, depending on the location of the investments of the fund, the targeted investor audience (institutional / retail, specific countries) and the required regulatory framework. A combination of Dutch and Luxembourg fund entities and/or special purpose vehicles may under certain circumstances also be considered. In both the Netherlands and Luxembourg, a replication, totally or partially, of Islamic indices such as the Dow Jones Islamic Indices or the FTSE Global Islamic Index can be accommodated. Parallel fund structures and co-investment strategies can also be accommodated. In both countries Sukuk are recognised as tradable securities and can be listed. A Dutch stichting may be used as a trust issuing Sukuk. In the Netherlands the Dutch Central Bank has issued a policy paper on the regulatory treatment of Islamic finance transactions, concluding that, with some minor amendments, if any, Islamic finance should fit within the current Dutch regulatory framework. Loyens & Loeff has a dedicated Islamic Finance Group and can advise on the most suitable tax and legal framework for a wide range of Islamic funds. Please refer to for further information on our Islamic finance practice. loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

24 6. Other developments Luxembourg Tax update 2011 Companies Increase of the surcharge for the employment fund from 4% to 5%. This increase results in a combined corporate tax rate for the City of Luxembourg of 28.80% for FY 2011 (instead of 28.59% for FY 2010), which rate includes the corporate income tax of 21%, the 5% surcharge and the 6.75% municipal business tax. Introduction of a minimum fixed corporate income tax levied on Luxembourg holding and finance companies (SOPARFIs), defined as companies that are exempt from any regulation and the assets of which are comprised of at least 90% financial assets. The minimum tax amounts to 1,500 before application of the surcharge. For SOPARFIs forming a fiscal unity, only the parent company is subject to the minimum tax rule. End of grandfathering period of the Holding The Holding 1929 (together with the so called Holding Milliardaire) regime was abolished previously. A grandfathering period for Holding 1929s (and Holding Milliardaires) already in place was applicable until year-end As of 1 January 2011, this regime is no longer available for any company. As a consequence of the end of this grandfathering period, the tax exemption for management companies of a single FCP is also not available anymore. Funds On December 17, 2010, Luxembourg has passed legislation (entered into force on 1 January 2011) to implement the UCITS IV directive (the UCI Law). Certain tax measures were introduced in order to accommodate the UCITS IV Directive and to increase the attractiveness of Luxembourg as fund jurisdiction: Master feeder structures. Introduction of an exemption of non-resident capital gains tax for holdings of non-residents in UCITS or UCIs, to facilitate inter alia feeder funds holding stakes in Luxembourg funds. Without such exemption, non-residents face capital gains tax if they would (be deemed to) alienate a shareholding of more than 10% in a UCITS or UCI. European passport for management companies. Introduction of an explicit exemption for corporate income tax, municipal business tax and net wealth tax of UCITS / UCIs established abroad, but managed from Luxembourg or having their central administration in Luxembourg. The purpose of the exemption is to avoid that where a Luxembourg-based investment manager or administrator is managing or administering a foreign UCITS / UCI, the latter would be deemed to be tax resident in Luxembourg and therefore, subject to taxation in Luxembourg. 22 loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

25 Exemption from the annual subscription tax (taxe d abonnement) for exchange traded index-tracking funds and for multi-employer pension pooling funds. On 12 August 2011 Bill N 6318, whose purpose is to amend the law dated 13 February 2007 relating to specialised investment funds or SIFs (the SIF Law), was released. The main proposed changes to be made by this draft law are summarised below. They essentially seek to align the SIF regime with the UCI Law and with the upcoming Directive: Amendments affecting the regulatory process and supervision: The asset portfolio of a SIF should be managed actively. The idea is to exclude entities whose only purpose is to keep financial holdings from the SIF regime. The launch of a SIF will also not be possible before approval is obtained from the CSSF. In addition, CSSF approval of a SIF will now be subject to knowing the identity of those in charge of managing the SIF s assets. Like directors and investment managers of SIFs, they must be of sufficiently good repute and have sufficient experience in relation to the type of the SIF concerned. The appointment and any change of director or other person in charge of the management of a SIF s assets will be subject to prior approval by the CSSF. New operational requirements: SIFs will have to implement sound and adequate risk management systems in order to appropriately identify, measure, manage and monitor all risks relevant to the SIF s investment strategy and asset portfolio. SIFs must also be structured and organised so as to limit the risk of conflicts of interest between the SIF and anyone involved with or linked to it and, if such risks do arise, to ensure they do not adversely affect the interests of the investors. In addition, SIFs which delegate the task of carrying out functions on their behalf to third parties must notify the CSSF before the delegation arrangements become effective and this delegation is subject to the fulfilment of few conditions. Belgium-Luxembourg Umbrella funds: the withdrawal of CSSF approval for a particular sub-fund will have no impact on the other sub-funds of the same SIF, which will remain registered on the official list of SIFs. In addition, cross sub-funds investments will now be possible. Belgian ruling on tax treatment of a Luxembourg Sicar One of the conditions of the Belgian participation exemption regime is the so-called subject-to-tax requirement. In Belgian law, this condition is defined in a negative way by enumerating five cases in which the participation exemption regime does not apply. One of these five exclusions targets investment companies which benefit from a special tax regime in their country of residence. The law, however, also provides for an exception to this exclusion rule. loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

26 Targeted investment companies continue to qualify if their articles of association provide in the annual distribution of at least 90% of the obtained income (after deduction of fees, commissions and expenses) if and to the extent that this income consists of dividends and capital gains which would themselves qualify for the participation exemption. This type of investment companies is referred to in Belgian practice as DBI/RDT investment companies. The Belgian Ruling Commission rendered an important ruling on the application of the participation exemption regime on dividends received from a Luxembourg Sicar (ruling nr dated 30 March 2010). Pursuant to this ruling, a Luxembourg Sicar which in principle falls under the aforementioned exclusion rule, can under circumstances qualify as an DBI/RDT investment company for purposes of the participation exemption regime. Consequently, if the articles of association of the Luxembourg Sicar stipulate that at least 90% of the net income must be redistributed, the participation exemption can be granted for the dividends distributed by the Sicar, if and to the extent that the dividends consist of dividends and/or capital gains which would themselves qualify for the participation exemption. It is the first ruling in which the qualification as an DBI/RDT investment company for purposes of the participation exemption regime is attributed to a foreign company. Please note that a Luxembourg SICAR can also qualify for the Belgian participation exemption provided it is demonstrated that the SICAR is comparable to the Belgian PRICAF PRIVEE. We recommend requesting a ruling in such a case. Netherlands Amendment Act Financial Markets 2010 On 12 May 2012, the Amendment Act Financial Markets 2010 (Wijzigingswet Wet op het financieel toezicht 2010; the Amendment Act ) has been adopted. The Amendment Act amends, amongst other things, certain parts of the Dutch Financial Supervision Act (Wet op het financieel toezicht, the FSA ). Some of these amendments are of relevance for the investment practice. These are listed below. The Amendment Act has entered into force as of July 2011, save for some exceptions. The following paragraphs will discuss three elements of the Amendment Act, including the date of entry into force of these elements. Voluntary supervision regime Supervision by the Dutch Authority for the Financial Markets (Autoriteit Financiele Markten; the AFM ) of (managers of) investment institutions was only available if the rights of participation of such investment institutions are offered to retail investors. The Amendment Act introduced a voluntary supervision regime for investment institutions, in case rights of participation are offered -exclusively- to qualified investors. This voluntary supervision regime has entered into force in July loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

27 The basis for such voluntary supervision regime is incorporated in a new section (2:69a) of the FSA. The voluntary supervision entails fewer requirements than the mandatory supervision. The following requirements which apply for regulated investment institutions under section 2:65 FSA, do not apply when opting for the voluntary supervision regime 15 : - Requirements regarding policies that safeguard sound and controlled business operations; - Requirements regarding the quality of information; - Requirements regarding the minimum amount of persons determining the dayto-day policy, the location of their registered office and the requirement that the management company has a position on the board of every investment institution it manages; - Requirements regarding the organisation of and cooperation with the depositary; - Requirements regarding the supply of information to the participants and the public; - Certain requirements regarding the filing of financial information with the AFM; - Requirement to have certain assets valued at least once a year by an independent expert; - Authority of AFM to require the investment institution to change its name; - Authority of AFM to dissolve and wind up an investment institution whose license has been withdrawn. The introduction of this new regime implies that managers and/or investment institutions will, from a marketing point of view, be able to have access to qualified investors even if these are only permitted (either statutory or as a consequence of local rules and regulations) to invest in regulated vehicles. The voluntary supervision regime will cease to exist upon implementation of the AIFM Directive (please see section 9 of this briefing) but could be useful as an intermediate step-up for AIFM compliance. Amendment EUR 50,000 exemption Pursuant to the FSA, managers of investment institutions offering rights of participation in the Netherlands are exempt from the requirement to obtain a license with the AFM, inter alia if and to the extent that the rights of participation have a nominal value or are offered against a consideration of at least EUR In anticipation of the implementation into national legislation of alike amendments to the European Prospectus Directive, the Dutch legislator has already increased the threshold for this exemption from EUR to EUR This overview will provide a basic insight into the subjects for which a lighter regime is in place. It does not mean that an investment institution which opts for the voluntary supervision regime is entirely exempt from all requirements related to the subjects included in the overview. The exemptions usually entail the relief of certain further rules and regulations regarding the manner of implementing the requirements. For instance the requirement to provide financial information: the investment institution still needs to submit the annual financial report to the AFM (section 4:51 subsection 1 FSA), but does not necessarily need to comply with the other requirements relating to the financial information (section 4:51 subsection 2 5 FSA). loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

28 In anticipation to these parts of the Amendment Act becoming effective, investment institutions may decide to currently already take into account the increased threshold when offering rights of participation in the Netherlands. The provisions concerning amendments to the threshold in the Amendment Act will enter into force on 1 January Wild west sign The already existing requirement for investment institutions that are not subject to supervision, to include a notice to that effect in all offering materials that are issued by it or on its behalf, should in the near future be have to meet a specific format. The AFM has newly developed standard phrases and symbols for this purpose. The exemption notice is not mandatory where an offer is being made exclusively to qualified investors. The new AFM regulations concerning the standard phrases and symbols will enter into force on 1 January Regulation on transferability For closed end collective investment institutions the question whether their rights of participation are transferable or not determines whether their manager is required to have the investment institution s prospectus approved by the AFM, in addition to its requirement to obtain a license with the AFM (subject to possible exceptions or exemptions that may be relied upon in that respect). In light thereof, the AFM issued the Regulation on transferability on 15 February 2011 (Beleidsregel verhandelbaarheid). Pursuant to the Regulation the AFM takes an economic view of the term transferable. Any participation right which allows the economic value to be transferred, whether directly or indirectly, to a third party is considered to be transferable. The AFM also considers arrangements that (i) allow the rights of participation to be redeemed by the collective investment scheme and subsequently sold to a third party or (ii) allow the rights of participation to be redeemed and cancelled by the collective investment schemes followed by the sale of a similar participation right to third party shortly thereafter, to be transferable. As a result of the Regulation on transferability, more often rights of participation in closed end collective investment schemes, will be considered to be transferable, which is likely to result in more investment institutions being required to have their prospectus approved by the AFM or another competent EU supervisor, unless an exception or exemption applies. 26 loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

29 UCITS IV For an overview of the key elements of UCITS IV which have been implemented in the FSA please refer to chapter 3 Luxembourg: The new Law dated 17 December 2010 on undertakings for collective investment and other general changes to the investment fund practice. UCITS IV has been implemented in the Netherlands by Act of 8 July 2011 amending the FSA and the Dutch Civil Code. The act implementing UCITS IV entered into force on 22 July loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

30 ANNEX I Comparison of six fund regimes: Luxembourg SIF and SICAR regime, Dutch FBI and VBI regime, Belgian PRICAF Privée and Institutional SICAV regime Matter Luxembourg SIF Luxembourg SICAR Dutch FBI Legal form 1. Various corporate entities either with or without SICAV status: Société Anonyme (SA), Société en commandite par actions (SCA), Société à responsibilité limitée (Sarl) or Société coopérative (SCSA). 2. FCP-SIF: Fonds commun de Placement. 3. SCS-SIF: Société en commandite simple (limited partnership). 1. Corporate: Société Anonyme (SA), Société en commandite par actions (SCA), Société à responsibilité limitée (Sarl) or Société coopérative (SCSA). 2. Société en Commandite Simple (SCS) (partnership model). 1. Corporate: Naamloze Vennootschap (NV) or Besloten Vennootschap (BV). 2. Fonds voor gemene rekening (FGR). 3. A comparable foreign entity established under the laws of an EU Member State or certain other jurisdictions. Corporate profile Separate legal personality. Limited liability FCP-SIF: Co-ownership of assets established under Luxembourg law, managed by a Luxembourg management company. No separate legal personality. Investor liability limited to contribution and capital commitment. SCS-SIF: Limited partnership managed by its managing general partner. Limited liability for investors. Corporate SICAR: separate legal personality. Investor liability limited. SCS-SICAR: partnership between a general partner as manager, and investors as limited partners. Limited liability for investors. Separate legal personality if NV or BV. Investor liability limited. FGR: Co-ownership of assets established under Dutch law. No separate legal personality. Investor liability limited to contribution and capital commitment. Investors requirements Either institutional/ professional investors or well-informed investors (investing at least EUR 125,000 or benefiting from a certification). Either institutional/professional investors or well-informed investors (investing at least EUR 125,000 or benefiting from a certification). Various conditions apply to the composition of the FBI s shareholders in terms of maximum interest that a single investor is allowed to hold. Tax treatment Not subject to tax, except for annual subscription tax of 0.01% on net asset value of SICAV-SIF (save for certain exceptions). An exemption from subscription tax applies if the SIF acts as a pooling vehicle for pension funds. In addition, a one-off fixed capital duty of EUR 75. SCS-SIF and FCP-SIF are tax transparent for income tax and dividend withholding tax purposes. Corporate: Subject to corporate income tax, but the return derived from securities is exempt. A SICAR is not subject to net wealth tax. No annual subscription tax. A one-off fixed capital duty of EUR 75. SCS-SICAR: tax transparent for income tax and dividend withholding tax purposes. Corporate income tax at a rate of 0%. Capital gains may be added to a tax free reinvestment reserve. No capital duty. Gearing limitations, an activity test and certain other restrictions apply. Profits must be distributed within eight months after the fiscal year-end, except for capital gains profits added to the reinvestment reserve. All classes of shares must share equally in the profits. Tax Treaty protection SICAV-SIF can make use of roughly half of the bilateral tax treaties concluded by Luxembourg. Most important ones are Germany, Spain, People s Republic of China, Portugal, Austria, Turkey, Singapore and Korea. FCP-SIF and SCS-SIF are tax-transparent: no tax treaty protection. Corporate SICAR can, in general, make use of all Luxembourg s bilateral tax treaties. SCS-SICAR is tax-transparent: no tax treaty protection. As the FBI is subject to corporate income tax (although at a rate of 0%), it can, in general, make use of bilateral tax treaties. Withholding tax SICAV-SIF: No withholding tax. FCP-SIF and SCS-SIF: no withholding tax as a result of its tax-transparency. Corporate SICAR: No withholding tax. SCS-SICAR: no withholding tax as a result of its tax-transparency. An FBI is required to withhold and remit 15% Dutch dividend withholding tax on distributions made to its shareholders unless a treaty or domestic law provides for a reduction or repayment. An FBI is granted a rebate on its remittance obligation for Dutch and (in part) foreign withholding tax incurred by the FBI. Distributions sourced from the reinvestment reserve are free from dividend withholding tax. Regulatory provisions Subject to authorisation and on-going supervision by the CSSF. Application must be filed within one month after set-up. Appointment of a Luxembourg custodian bank entrusted with the safeguarding of the fund s assets and the daily administration thereof. Subject to prior authorisation and on-going supervision by CSSF. Appointment of Luxembourg custodian bank entrusted with the safeguarding of the SICAR s assets. Regulatory supervision is not a condition to benefit from the FBI regime (tax regime). However, depending on the investors base, the manager or the FBI may be subject to a licence requirement and on-going supervision by the AFM. In practice, an exemption often applies (e.g, for funds with an institutional investors base). If, however, the FBI is subject to regulatory supervision, or specifically exempted from such regulatory supervision, the FBI enjoys more relaxed shareholder conditions. If the FBI qualifies as a UCITS, a European passport is available. Risk diversification; minimum net assets and other typical requirements Principle of risk spreading applies. No quantitative, qualitative, geographical or other type of investment restrictions. 30% safe harbour rule. Net assets may not be less than EUR 1,250,000 (to be reached within twelve months). No risk diversification rules apply. Net assets of a SICAR may not be less than EUR 1,000,000 (to be reached within twelve months). No risk diversification rules. The FBI is only permitted to be engaged in passive investment activities (with limited possibility to be engaged in real estate development). 28 loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

31 Dutch VBI-regime Belgian PRICAF Privée Belgian Institutional SICAV Naamloze Vennootschap (NV) or Fonds voor gemene rekening (FGR) or a comparable foreign entity established under the laws of an EU Member State or certain other jurisdictions. Corporate: Naamloze Vennootschap (NV) / Société Anonyme (SA), Commanditaire Vennootschap op Aandelen (Comm. VA) / Société en Commandite par Actions (SVA), Gewone Commanditaire Vennootschap (Comm. V) / Société en Commandite Simple (SCS). Corporate: Naamloze Vennootschap (NV) / Société Anonyme (SA), Commanditaire Vennootschap op Aandelen (Comm. VA) / Société en Commandite par Actions (SVA). FCP : Gemeenschappelijk beleggingsfonds / Fonds commun de placement. Separate legal personality. Investor liability limited. Separate legal personality. Investor liability limited, except for the Comm. VA and Comm. V where at least one participant (the general partner) is jointly and severally liable for all obligations of the company. Corporate: Separate legal personality. Investor liability limited, except for the Comm. VA where at least one participant (the general partner) is jointly and severally liable for all obligations of the company. FCP: No separate legal personality. VBI must function as an investment institution for collective investments. No liability to Dutch corporate income tax. No capital duty. No other levy. No requirements as to the capacity of the investor (investing at least EUR 50,000). Pricaf Privée must have at least six (unrelated) investors. Pricaf Privée can have less than six shareholders if at least one shareholder has a special status such as a Belgian or foreign undertaking for collective investments (UCI) or a Belgian or foreign pension fund. Corporate taxpayer without tax base (except for certain items of income, generally not relevant for funds), meaning effectively tax exempt. No capital duty. No other levy. Institutional or professional investors (defined broadly). Institutional SICAV can be incorporated by one single investor. Corporate: Corporate taxpayer without tax base (except for certain items of income, generally not relevant for funds), meaning effectively tax exempt. No capital duty. Annual subscription tax of 0.01% FCP: Tax transparent for income tax and dividend withholding tax purposes. The VBI is exempt from corporate income tax, and, therefore, not entitled to tax treaty protection. Entitled to tax treaty protection (from a Belgian perspective; unknown whether source countries grant treaty protection) Corporate: Entitled to tax treaty protection (from a Belgian perspective; unknown whether source countries grant treaty protection). FCP: No tax treaty protection. No withholding tax. No withholding tax, except re-distribution of dividends received to individuals (15% withholding tax). Corporate: 25% withholding tax, except for dividends distributed to foreign pension funds and charitable trusts; no withholding tax on acquisition surpluses (redemption of shares) and liquidation surpluses. FCP: No withholding tax as a result of its tax transparency. Regulatory supervision is not a condition to benefit from the VBI regime. However, depending on the investors base, the manager or the VBI may be subject to a license requirement and on-going supervision by the AFM. In practice, an exemption should generally apply (e.g. for funds with an HNWI or institutional investors base). If the VBI qualifies as a UCITS, a European passport is available. No supervision by the Commission for Banking, Finance and Insurance (CBFI). Indirect supervision by the statutory auditor (external auditor). No supervision by the Commission for Banking, Finance and Insurance (CBFI). Indirect supervision by the statutory auditor (external auditor). VBI should apply risk diversification. Requirement should be easily met in practice. Investments restricted to categories of securities / financial instruments listed in regulatory law. This may include bank deposits, as well as foreign real estate if structured through a (tax-transparent) entity. VBI may not be used for direct investments in Dutch real estate. There is a limit on the permitted scope of assets to financial instruments. (semi-) Openended character is compulsory. No obligatory distribution policy. Risk diversification principle applies, but without specific risk diversification criteria, thus easily met in practice. Investments restricted to financial instruments listed in regulatory law and temporary or additional investments listed in regulatory law; mainly financial instruments issued by non-listed companies. Maximum term of a Pricaf Privée is 12 years. Risk diversification principle applies, but without specific risk diversification criteria, thus easily met in practice. Investments restricted to financial instruments and liquid assets. loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

32 Comparison of five entities that frequently serve as fund or feeder entity: Dutch CV, BV and Coop, the Luxembourg Soparfi and the Belgian Holding Matter Dutch CV Dutch BV Legal form Commanditaire Vennootschap (CV) Besloten Vennootschap (BV) Corporate profile Limited partnership with no separate legal personality (a bill is pending that makes it possible to elect for legal personality). Investor liability limited to contribution and capital commitment. Separate legal personality. Investor liability limited. Transferability For tax reasons, transparency can be achieved only if LPA provides for unanimous consent from all the partners for a transfer of limited partnership interests or the admission of new limited partners. A deemed consent may apply for investors not responding within a four weeks period following notification. No specific requirements. Investors requirements No requirements. No requirements. Tax treatment Not subject to corporate income tax, withholding tax, capital duty, net wealth tax or annual subscription tax. Limited partners may be subject to corporate income tax (permanent establishment); in such a situation the participation exemption (see under Dutch BV) may apply and effectively eliminate tax liabilities. Normally subject to 25% corporate income tax. Exemption applies to dividend and capital gains income realised from 5% shareholdings in active companies and real estate companies ( participation exemption ). Tax Treaty protection CV is tax-transparent. Hence, in principle, no tax treaty protection. BV can, in general, make use of Dutch bilateral tax treaties. Taxation of distributions No withholding tax or other tax liabilities as a result of CV s tax-transparency. Subject to 15% withholding tax. Under circumstances corporate income tax is imposed on foreign shareholders. Reduction or elimination of these tax liabilities may apply on the basis of EC Parent-Subsidiary Directive, or tax treaties. Flexibility Flexibility in partnership agreement: lock-up, open/ closed ended, redemption and distribution, etc. However, transferability rules must be taken into account to ensure tax transparency. Flexibility in setup. Regulatory provisions If set up as an institutional fund not subject to prior authorisation or on-going supervision. No reporting obligations and no external audit required. Depending on the investors base, the manager or the BV may be subject to a license requirement and ongoing supervision by the AFM. In practice, an exemption should generally apply (e.g, for funds with an institutional investors base). Risk diversification None. None. 30 loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

33 Dutch Coop Luxembourg Soparfi Belgian Holding Coöperatie U.A. (Coop) Société à responsibilité limitée (Sarl) Société anonyme (SA) Société en commandite par actions (SCA) Société anonyme (SA) / Naamloze vennootschap (NV) Société privée à responsabilité limitée (SPRL) / Besloten vennootschap met beperkte aansprakelijkheid (BVBA) Société en commandite par actions (SCA) / Commanditaire vennootschap per aandelen (Comm. VA) Société en commandite simple (SCS) / Gewone commanditaire vennootschap (Comm. V) Special form of a Dutch association with separate legal personality, which is governed by certain specific rules and the general rules applicable to Dutch associations (verenigingen). Investor liability limited to contribution and capital commitment. Separate legal personality. Investor liability limited (except the General Partner in the case of an SCA). Separate legal personality. Investor liability limited, except for the Comm. VA and Comm. V where at least one participant (the general partner) is jointly and severally liable for all obligations of the company. For tax reasons (see below), a transfer of interests generally requires the unanimous consent from all members. For Sarl the transfer of shares to third parties requires approval of shareholders representing at least 75% of the share capital. For the SA, the share transfer is free, as it is for the SCA (except shares held by the General Partner). No specific requirement. Regarding the SCS / Comm.V., for foreign tax reasons, transparency can be achieved only if AoA provides for unanimous consent from all the partners for a transfer of limited partnership interests or the admission of new limited partners. At least 2 members required at incorporation. No requirements, except for the SCA (At least 2 members required at incorporation). At least 2 members required at incorporation for SA/ NV, SCA/Comm. VA and SCS/Comm. V. Normally subject to 25% corporate income tax. Exemption applies to dividend and capital gains income realised from 5% shareholdings in active companies and real estate companies ( participation exemption ). Normally subject to 28.8% aggregate corporate income tax. Exemption generally applies if dividend and capital gains income is realised from a shareholding (i) which is held or will be held for at least 12 months, (ii) in which Sarl/SA is either invested for 10%, or has an acquisition price of 1.2M (dividend income) respectively 6M (capital gains), and (iii) in case of shareholdings in companies located in treaty states outside of the EU, a subject to tax requirement is met. Normally subject to 33.99% aggregate corporate income tax. 95% exemption generally applies if dividend income is realized from a shareholding (i) which is held or will be held for at least 12 months, (ii) in which the holding is either invested for 10%, or has an acquisition price of 2.5M, and (iii) provided a subject-to-tax requirement is met (generally met for EU shareholdings); 100% exemption generally applies to capital gains on shares provided that the subject-totax requirement is met. Coop can, in general, make use of Dutch bilateral tax treaties. Sarl/SA can, in general, make use of Luxembourg s bilateral tax treaties. The entities can, in general, make use of the Belgian bilateral tax treaties. No withholding tax. Under circumstances corporate income tax is imposed on foreign shareholders. Reduction or elimination of this tax liability may apply on the basis of tax treaties. Subject to 15% withholding tax. An exemption may apply in the case of distributions to entities resident in treaty states (to the extent that the subject to tax test is met) or on the basis of the EC Parent- Subsidiary Directive. Furthermore, reductions may apply pursuant to tax treaties. Alternatively, hybrid financial instruments may be employed to capitalise the Sarl/SA. Subject to 15/25% withholding tax; the following exemptions however apply: - dividends paid to foreign pension funds and charitable trusts; and - dividends paid to parents companies established in treaty states (extension of the P/S Directive to treaty states). Furthermore, exemptions or reductions may apply pursuant to tax treaties. Flexibility in setup. Flexibility in set-up. Flexibility in set-up. Depending on the investors base, the manager or the Coop may be subject to a licence requirement and ongoing supervision by the AFM. In practice an exemption often applies (e.g. for Coops with an institutional investors base). In principle not subject to regulation. In principle not subject to regulation. None. None. None. loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

34 Loyens & Loeff Fund Team Fund formation Our Investment Management practice is the largest to offer a full range of investment management services in the Benelux. Our practice is multidisciplinary and closely integrated with other related practice areas, such as Private Equity (focusing specifically on private equity transactions such as leveraged buyouts and venture capital transactions), Tax, Real Estate and Banking & Finance. Fund formation constitutes a large part of a comprehensive range of investment management services. For the past 20 years, we have assisted sponsors of and investors in private equity funds pursuing all major investment strategies in a variety of markets, including buyout, venture capital, real estate, mezzanine, infrastructure, healthcare, energy, as well as fund of funds. Structuring such funds requires not only expertise in corporate, tax and securities law, but also a significant amount of industry knowledge. Our expertise is continually reinforced by our database of current market terms assembled through our fund formation work and through review of funds on behalf of institutional investors. In addition, we regularly assist in the formation, registration and maintenance of UCITS in the Netherlands and Luxembourg and the listing and delisting of public funds. Assistance with fund investments Our fund formation services include: Structuring and negotiating of the fund documentation with investors, from a tax and corporate perspective Structuring of carried interest, organisation of employee investment entities and structuring of other incentive arrangements Providing advice on complex investment management-related VAT issues Assisting with the registration and maintenance of UCITS in the Netherlands or Luxembourg Providing regulatory, corporate and tax advice to public investment entities and mutual funds (including UCITS), hedge funds, and proprietary funds sponsored by insurance companies, banks and other institutional investors Rendering capital markets-related work in relation to listings and delistings (through public offers or otherwise) of investment funds. We regularly act on behalf of several large institutional investors in respect of their investments in private equity, real estate, hedge and other funds, in a tax as well as corporate and regulatory capacity. 32 loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

35 Asset pooling and asset management arrangements Our specialists We are regularly involved in asset pooling and asset management arrangements, including fiduciary management arrangements for institutional investors and pension funds and institutional asset managers. Our services include corporate, regulatory and tax assistance. Clients Our specialists are based in our Amsterdam and Luxembourg offices, closely working together with team members in Brussels for Belgian investment management services. Team members posted to our foreign offices are increasingly involved in the team s investment management work. We are heavily involved with associations such as the Dutch Venture Capital Association (NVP), the European Venture Capital Association (EVCA), the European Association for Investors in Non-listed Real Estate Vehicles (INREV) and the European Public Real Estate Association (EPRA). Our Fund Team maintains close relationships with leading law firms and tax advisers in Europe, the United States and the Far East. Clients include a variety of funds and fund managers: European captive and independent private equity funds (buy-out and venture capital), mutual funds, quoted REITs with a European property portfolio, cross border private equity real estate funds, US investment banks managing European opportunity funds and investment managers setting up fund-of-funds. We advise large institutional investors for the formation of their funds, or who act as lead investors for funds set up by others. Please visit our website for a current overview of the practitioners of the Loyens & Loeff Fund Team, their publications and seminars. loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

36 Loyens & Loeff Loyens & Loeff is an independent full-service law firm specialised in providing legal and tax advice to enterprises, financial organisations and governments. The intensive cooperation between attorneys, tax lawyers and civil law notaries places Loyens & Loeff in a unique position in its home market, the Benelux regions. Internationally, Loyens & Loeff is a reputable adviser on tax law, corporate law, financial and capital markets, cross-border financing, private equity, real estate, the energy sector, European law, regulatory law, VAT and employment law. When providing international advice, Loyens & Loeff maintains close relationships with leading law firms and tax advisers in Europe, the United States and the Far East. Worldwide, Loyens & Loeff has more than 1,500 employees, including over 800 tax and legal experts in six of the Benelux offices and eleven branches in the major international financial centres. Awards Each year, Loyens & Loeff is awarded the highest ranking in the Tax category in the Chambers guide, Legal 500 and International Tax Review s World Tax. Also with respect to Corporate / M&A, Banking & Finance, Investment Funds, as well as many other categories, Loyens & Loeff achieves excellent results every year in the leading guides on legal and tax services providers. 34 loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January 2012

37 Contacts t The netherlands LUxembourg Mark van Dam, attorney Marc Meyers, attorney T T E [email protected] E [email protected] Marco de Lignie, tax lawyer Thibaut Partsch, attorney T T E [email protected] E [email protected] Ronald Wijs, tax lawyer Johan Terblanche, attorney T T E [email protected] E [email protected] belgium Stefaan Deckmyn, attorney T E [email protected] Christophe Laurent, tax lawyer T E [email protected] Marc Vermylen, attorney T E [email protected] loyens & loeff Fund Briefing for Luxembourg, Belgium and the Netherlands - January

38 In this briefing

39 Offices BENELUX AMSTERDAM 1) Fred. Roeskestraat ED Amsterdam The Netherlands Telephone Fax arnhem 4) (oosterbeek) Utrechtseweg AJ Oosterbeek The Netherlands Telephone Fax brussels 3) Woluwe Atrium Neerveldstraat Brussels Belgium Telephone Fax eindhoven 2) Parklaan 54a 5613 BH Eindhoven The Netherlands Telephone Fax luxembourg 3) 18-20, rue Edward Steichen K-Point Building 2540 Luxembourg Luxembourg Telephone Fax RotterdaM 1) Blaak GA Rotterdam The Netherlands Telephone Fax INTERNATIONAL ARUBA 4) ARFA Building (Suite 201) J.E. Irausquin Boulevard 22 Oranjestad, Aruba Telephone Fax CURAÇAO 4) Landhuis Arrarat Presidente Romulo Betancourt Blv 2 Willemstad, Curaçao Telefoon Fax DUBAI 1) Dubai International Financial Centre (DIFC) Gate Village, Building # 10, Level 2 P.O. Box Dubai, United Arab Emirates Telephone Fax FRANKFURT 3) Barckhausstraße Frankfurt am Main Germany Telephone Fax geneva 4) Rue du Rhône 59 (1st floor)) 1204 Geneva Switzerland Telephone Fax Hong Kong 3) 28th Floor, 8 Wyndham Street Central, Hong Kong T: F: london 1) 26 Throgmorton Street London EC2N 2AN United Kingdom Telephone Fax new york 1) 555 Madison Avenue 27th Floor New York, NY U.S.A. Telephone Fax paris 1) 1, avenue Franklin D. Roosevelt Paris France Telephone Fax (legal) Fax (tax) singapore 3) 80 Raffles Place # UOB Plaza 1 Singapore Singapore Telephone Fax tokyo 3) 15F, Tokyo Bankers Club Bldg Marunouchi, Chiyoda-ku Tokyo Japan Telephone zurich 4) Dreikönigstrasse Zurich Switzerland Telephone Fax ) attorneys at law, tax advisers and civil law notaries 2) tax advisers and civil law notaries 3) attorneys at law and advisers 4) tax advisers EN-BFB