1 Netherlands as a holding Jurisdiction West End Hotel, Mumbai Itzik Amiel, adv.

2 Agenda  ANT/AMACO Introduction;  Introduction - The Netherlands;  Traditional features of the Dutch tax system;  Dutch Tax Reform 2007;  Proven Tax Structuring opportunities with India.

3 ANT/AMACO Introduction

4 ANT/AMACO Group’s Profile About Us  Origin: ANT , Amaco ;  Independent - maintain a position of absolute independence towards its business partners and clients;  International - international scope; strategically positioned to cater to the strong international growth in demand for our services;  In-Business - positioning ourselves as partner in business to help the strength and the growth of our clients;  Tradition of Trust - established track record and long- lasting relationship.

5 ANT/AMACO Group’s Profile About Us  We are a genuinely international management, trust, corporate and asset administration group;  A growing global network - ANT Group continues to grow. To build extra capacity, we are investing heavily in human resources, technology and infrastructure, and in the next few years, we expect to increase the size of our network also to other jurisdictions;  Acts under supervision of the Dutch Central Bank as per the WTT (Act on Supervision Trust offices) and under the Netherlands Antilles central bank [while the NV is under the supervision of AFM];  Strong emphasis on professional skills, such as;  Language skills (English, French, Dutch, German, Italian, Spanish, Portuguese, Greek, Arabic, Croatian, Bulgarian, Chinese and Hebrew) at “operational level”;  Qualifying (Tax) Legal degrees;  Qualifying Accounting degrees.

6 The Added Value of ANT/AMACO Reasons to involve ANT/AMACO:  The solid financial background and track-record;  High commitment/ loyalty of clients;  Close contacts with advisers and clients.  Administration capabilities for Implementation of tax planning (based on a tax lawyer’s advice);  Administration capabilities for Implementation of financial engineering advice (based on the financial advise);  Confidentiality;  The global network (intermediaries; clients etc.).  Proven successful experience with Indian clients.

7 The Added Value of ANT/AMACO Benefits for client:  Global platform  Geographical platform providing a range of services for trust and fiduciary services from which to develop new business opportunities  Expertise  High quality workforce with extensive experience in rendering administration services for structuring of, private and corporate wealth/ transactions, and long commitment of employees to ANT/AMACO.

8 The Added Value of ANT/AMACO Benefits for client:  Quality  High level compliance and risk management minimizing reputation risk for the business and its partners.  Independence  Focused independent service provider with minimal conflicts of interest with its partners or clients.  Inpersonal  We know our clients and our clients know us.

9 Types of Clients Main types of clients of ANT/AMACO:  Large-medium national and multinational companies;  Institutional clients;  High Net Worth Individuals. We are proud to have the largest Indian clients portfolio

10 ANT/AMACO - Products and Services Tax Driven:  Management & Domiciliary services (for Holding, finance, royalty and investment companies);  Corporate Services;  International Licensing and Collection services;  Off-shore trading/re-invoicing companies;  Anglo-saxonTrust Services;  Business Center Facilities (for substance purposes);  Captive Insurance companies (in some of the locations);  Off-shore banking.

11 Licensing & Financial Services Two dedicated subsidiaries:  A Dutch company focusing on the exploitation of intellectual property rights (“IP Rights”) and other intangible assets company incorporation or sale of existing companies. NCS Universal Rights B.V. NCS Finance B.V.  A Dutch company focusing on the rendering financial services like escrow arrangements and back-to-back loans and also focusing on the ownership of Special Purpose Vehicles.

12 ANT/AMACO - Products and Services Non-Tax Driven:  Structured Finance Services:  Securitization Deals;  Special Purpose Vehicles;  Other Special Products.  Escrow Services;  Custody services;  Trustee services;  Paying Agent services;

13 ANT/AMACO - Products and Services Non-Tax Driven (continued):  Asset Administration Services:  Electronic Voting;  Employee Benefit Programs;  Securities Investment systems;  Custodian for Investment Funds.  Registrar and Shareholder Services:  Administration of shareholders registers;  Personal Consult and Support.  Fund Administration Services.

14 The Netherlands Introduction

15 Introduction - The Netherlands The Netherlands

16 Introduction - The Netherlands Interesting Facts About The Netherlands Did you know that...? `the Netherlands' and 'Holland' are used to describe the same country? the population density of the Netherlands is approximately 480 inhabitants per square km? the Netherlands, covering a mere 0.008% of the world's surface, is the world's third biggest exporter of agricultural produce? the Netherlands is one of the founding members of The European Union? the Dutch are the tallest people in Europe? the Netherlands is the eight biggest exporter in the world? Amsterdam is the capital of the Netherlands, but The Hague is the seat of government? most Dutch people speak at least one foreign language? Amsterdam is home to almost 200 nationalities? the Netherlands has one of the youngest populations in the EU? [ Source: Dutch Ministry of Foreign Affairs]

17 Introduction - The Netherlands  For years, a reputable position as a good location for international tax planning of foreign groups. Generally recognized as having a positive impact on the Dutch investment climate:  Well educated, flexible, multilingual and motivated workforce and top professionals;  Central geographical position, combined with accessibility and excellent infrastructures such as the Port of Rotterdam and Schiphol Airport;  Strong international focus of the Dutch economy including open attitude of authorities.

18 Introduction - The Netherlands  Easy access to Stock markets via public listing at Euronext;  Currency is Euro (strong currency), no exchange control regulations;  Trading nation with long history: exposed to different cultures and open minded;  Internationally competitive tax rate;  Intra group finance/licensing activities;  Favorable international holding regime;  Hardly ever blacklisted;

19 Introduction - The Netherlands With the introduction of the 2007 amendments to the Dutch corporate income tax act, the Netherlands should be one of the first countries again to consider as a holding or financing location.

20 Traditional Features of the Dutch Tax System The Netherlands

21 Traditional Features of the Dutch Tax System  No Corporate Income Tax (‘CIT’) on dividends and capital gains from (foreign) qualifying participations (‘participation exemption’);  No CIT on income from qualifying foreign permanent establishments;  No Withholding Taxes (‘WHT’) on interest and royalties paid by Dutch companies.

22 Traditional Features of the Dutch Tax System Vast and favorable tax treaty and agreements network (over 80 tax treaties and more than 100 investment protection treaties)  Low or no WHT on foreign income received by Dutch companies, credits available. The tax treaty between the Netherlands and India is beneficial. EU directives  Provided certain conditions have been fulfilled: No withholding tax on intra EU dividends, interest and royalties. Domestic rules  Good domestic rules for avoidance of double tax if no treaty applies.

23 Dutch Tax Reform 2007

Dutch Tax Reform  Reduction of the Dutch CIT maximum rate from 29,6% to 25,5%;  R eduction of the Dutch dividend WHT rate from 25% to 15% (often lower in case tax treaty or EU directives applies);  Changes to the participation exemption;  Special tax regime on intra group interest income? – Subject to EU approval

Dutch Tax Reform Dutch Corporate Income Tax Rate Overview of Dutch corporate tax rates during the past few years YearTax Rate first bracket(s)Tax rate on remaining profit …200429% (profits to € 22,689)34.5% % (profits to € 22,689)31.5% % (profits to € 22,689)29.6% % (profits to € 25,000) 23.5% (profits of € 25,000 to € 60,000) 25.5% % (profits to € 40,000) 23% (profits of € 40,000 to € 200,000) 25.5%

Dutch Tax Reform Reduction of Dutch dividend withholding tax rate  Dutch dividend WHT rate to be reduced from 25% to 15%.  In practice often lower or nil as a result of tax treaties or EU law.

Dutch Tax Reform Dutch Participation Exemption  The participation exemption is a good tradition in Dutch corporate taxation. It is an exemption of Dutch corporate tax on dividends, capital gains and other benefits derived from shares that meet certain characteristics.  The 2007 legislation simplifies the rules and takes away some problems that were there previously.

Dutch Tax Reform Dutch Participation Exemption On the basis of the proposed legislation:  It applies to shareholdings of 5% or more; It also applies if a group company owns 5% or more and the Dutch company holds less than 5% or to a so called “hybrid loan”.  Subsidiaries that are not ‘passive’ will not have to be subject to tax; The same applies to so called “real estate companies”.  It also applies to “passive” participations or passive group financing participations, provided their profits are taxed at 10% or more (profit determined on the basis of Dutch standards).

Dutch Tax Reform ≥5% >50% Passive Tax rate >10% Tax rate >10% 0% tax rate Non EU EU No Dutch participation exemption Fully exempt Capital Gains Dividends ≤50% Passive <5%

Dutch Tax Reform Dutch Participation Exemption If tax haven ‘active’, e.g. performing (group) trading activities, participation exemption will be granted, irrespective of the level of taxation at tax haven. If tax haven ‘passive’ and not effectively taxed at 10%, participation exemption in principle will not apply Cyprus has a tax rate of 10%, but also various exemptions, so effective tax rate should be monitored closely.

Dutch Tax Reform Dutch Participation Exemption 100% >5%<5%

Dutch Tax Reform Dutch Participation Exemption The experience with the new regime:  New regime generally include more subsidiaries as qulifying subsidiaries;  Only in exceptional cases the new regime would cause the subsidiary to be no longer qualifying (have interest below 5%);  An (indirect) participation in an active business, generally participation exemption will apply;  An (indirect) participation in a passive real property company, generally participation exemption will apply;  Rules for exemption for PE income have not changes.

Dutch Tax Reform Dutch Interest Box A special tax regime in respect of interest received from group companies has been developed containing the following characteristics: Approximately 80% of inter-company interest income less expense to be exempt; the remainder will be taxable against 25,5% (effective tax rate approx. 5%); Taxpayer has to opt for application of the interest box together with all affiliated Dutch companies; Affiliated companies; shareholdings of at least 50% held by the tax payer or another group company. BUT, subject to certain conditions and restrictions Subject to EU approval

34 Proven Tax Structuring With India

35 IndiaCo DutchCo LTSub1 10% WHT (article 10 Treaty) 0% CIT (participation exemption) generally no WHT (domestic law) LTSub2 Holding- Dutch Intermediary Company 100%

36 IndiaCo DutchCo TaxHaven Capital Loan Holding – use of losses Interest losses

37 IndiaCo LuxCo DutchCo Capital Hybrid Loan Group Financing – Hybrid Loan [1] Group Loans

38 DutchCo Target Loan Group Financing – Hybrid Entity [1] LP

39 IndiaCo Target Group Financing – Hybrid Entity [2] Sub1 bank loan BelgCo equity i/c loan

40 IndiaCo DutchCo Dividend/Interest /Royalty on sublicense Loan/license Foreign Sub Finance/IP in low tax jurisdiction 100% Tax HavenCo. 100%

41 Caveat  ANT/AMACO does not advise on tax or legal matters. When structures are discussed, the purpose is to find a potential solution for a specific issue, which should subsequently be checked with the client’s tax or legal advisor.  This applies at the beginning of the relationship as well as during its lifetime. It also applies if and when NCS Universal Rights or NCS Finance is involved.  Before actually entering into a relationship ANT/AMACO needs to check and verify the background and the motives of the planned transaction(s) and the reputation and identity of the parties directly and ultimately involved. WE ARE NOT TAX ADVISERS !

42 End Note. Albert Einstein We owe a lot to the Indians, who taught us how to count, without which no worthwhile scientific discovery could have been made

43 Itzik Amiel, Adv. (LL.B., LL.M.) Director International Business Development T: M: F: E: W: Thank You!