Crypto And Trusts

The Tortoises In The Race

James Brockhurst
Forsters LLP, London

Blockchain technology has opened up huge entrepreneurial opportunities that a great number of industries have been quick to exploit. The trust industry, on the other hand, is naturally (and with good reason) circumspect about all things blockchain. But perceptions within the industry are rapidly changing.

The trust industry, and the private client industry generally, have always lagged behind the corporate and funds industry in adoption of cryptoassets. Now trustees and trust companies, or at least the majority of them, have accepted the inevitability of cryptoassets and that they will be asked by settlors or investment advisors to hold such assets.

Trustees are therefore now grappling, in some cases urgently, with the challenges of holding cryptoassets in trust. The three core challenges that every trustee is considering are custody, investment risk and compliance.

Global Regulation

Could I Speak To The Owner?

Richard Grasby
Partner, Appleby, Hong Kong, Shanghai

Imagine the scenario. You are having a meal in a fine restaurant and over the evening, a few things are not up to standard. You decide enough is enough and ask to speak to “the owner”. But who exactly do you really wish to speak to?

You really want to speak to someone with responsibility for the provision of your meal – the person in charge of delivery – most likely the head waiter; possibly the chef.  This is unlikely to be the “owner”.

The ownership and operation of a restaurant – particularly those in a global five-star hotel chain – is most likely a complex array of investors – many of which will themselves be collective investment vehicles with a matrix of terms – together with franchise agreements and the like. All may have some consequence over how the restaurant is run but none of which would have any direct influence on the enjoyment of your meal.

In a similar way, the concept of beneficial ownership (particularly in the private wealth context) has evolved to something far wider than ownership. Today the notion of beneficial ownership encompasses control and influence as well as traditional ownership.

Brexit One Year On

Impact On The UK’s Overseas Territories

Alastair Sutton
Brick Court Chambers, London

In the past 30 years, I have advised the three Crown Dependencies (Jersey, Guernsey and the Isle of Man), Gibraltar and Bermuda on their legal and economic relations with the European Union (EU).

Under international and EU law, all of the UK’s 20 or more dependent territories are “objects” rather than “subjects” of international law and fall under UK sovereignty. Although each dependency is “autonomous” or self-governing, the UK bears ultimate international responsibility for ensuring their conformity with international law.[i]

My purpose here is to assess, almost one year after the UK’s complete[ii] withdrawal from the EU, the extent to which – as dependencies of the UK - these jurisdictions have been affected by the UK’s new status as a “third country” of the EU.

Interview

From Minimum CIT To BEPS

Pascal Saint-Amans
Director, OECD Centre for Tax Policy and Administration

IFC Media Interviews Pascal Saint-Amans, Director, Centre for Tax Policy and Administration, OECD.

IFC: There has been concern from some developing countries, where the economy is almost entirely based on the presence of foreign multinationals, that the Pillar Two proposals would reduce tax incentives and thereby make them less competitive. How would you address these concerns?

PSA: Developing countries had a significant influence on the terms of the deal. The agreement acknowledges calls from developing countries for more predictable international rules; provides a redistribution of taxing rights to market jurisdictions based on where sales and users are located, which is often in developing countries; and reduces the incentives for MNEs to shift profits out of developing countries. In addition, the agreement also protects the right of developing countries to tax certain base-eroding payments (like interest and royalties) when they are not taxed up to the minimum rate.

Jurisdiction in Focus

BVI Report 2022

For nearly 40 years, the British Virgin Islands has been one of the world’s leading international finance centres; and is the go-to jurisdiction for the incorporation of companies to facilitate cross-border trade, investment and business. In this special report, we consider the challenges and opportunities ahead for the jurisdiction in 2022.

Cover Story

Beyond Tax

As part of a “historic” deal, G20 finance ministers have endorsed a global tax initiative aimed at curbing corporate practices by multinationals through the introduction of a global minimum tax of 15 per cent.

Whilst the OECD has argued that the developments will “put a floor on competition over corporate income tax”, the proposals have been met with fears that the initiative will create an unattractive environment for business and investment.

While recognising that having tax incentives is an attractive feature of many IFCs, our feature demonstrates how IFCs are not necessarily defined by their tax rates and contribute vastly to the global financial ecosystem by offering a wide array of business entities, regulated spaces and innovative structures for different industries and services.