Investment Fund Analysis & Strategy
Current hurdles in fund structuring
Manager/
GP
4
•
Investors
Advisory
Company
Management fees
Fund
1-2
HoldCo 1
HoldCo 2
3-4-6-7
HoldCo 3
BidCo
Target
Classic features of a fund structure
•
Fund & GP located in a low tax jurisdiction with flexible regulatory
requirements.
Tax neutral structure for investors.
Key challenges in the current BEPS environment
1. PE exposure - Activities of the advisory company may give rise to a
PE exposure for the fund or its investors.
-
2. TP risk and regulatory constraints The remuneration model
within a fund structure must be at arm's length while at the same time
compliant with regulatory constraints.
3. Anti-treaty shopping measures
-
For non-CIV funds, DTT access
for intermediary HoldCos is likely to be increasingly challenging
under the contemplated anti-treaty shopping measures.
4. Hybrid mismatches - Current hybrid structures are likely to be
caught by new anti-hybrid measures.
5. Transparency initiatives - Reporting requirements such as CbCR,
FATCA and CRS will significantly increase the workload, staff and
expertise of fund managers.
6. Danish Court Cases - Impact on holding locations needs for
economic substance and purpose.
7. ATAD 3 - Impact of anti-shelf entities.
PwC
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