1. Royalty Structure Technical Assistance Structure Financing Structure
Arturo Garza Barragan & Associates
April 25th. 2007

2. Common features
In absence of a treaty, royalty, technical assistance and interest income are subject to a high withholding tax at source.
Royalty and interest payments are generally deductible for the payer.
The royalty or financing company may be subject to corporate income tax on an arm’s-length spread.
In some cases, the royalty or financing company can be an Amicorp (Hansa Mercator Group HMG) in-house company, and therefore:
Transfer pricing rules may not apply.
The Amicorp in-house company (and not the client) would be liable to pay the corporate income taxes.
Client does not pay for the administration of the in-house company
These companies are ready (ie. have tax residence certificates, VAT numbers…).
Saves taxes, time and money.

3. Royalty Structure IP Co. Intangible Owner
CV/UK LLP
IP Co.
Intangible
Owner
The owner or developer of the intangible contributes it to a tax transparent entity, (IP Co. a Netherlands CV or other tax transparent entity).
IP Co. that licenses the rights to an underlying entity (resident in the treaty country) (in Netherlands, Luxembourg, Denmark).
The royalty company sublicenses rights to a Latin American company for its own use or for subsequent commercial exploitation.
Appropriate license agreements are executed.
License Rights
Client group company or HMG IN-HOUSE COMPANY
Royalty Company
Netherlands/ Luxembourg/ Denmark/Sweden
Latin American
Company sublicenses
Sub-Licence rights
Latin American Entity

4. Vice President of Sales and Marketing, Americas
From:
Maria G. Soto – Zachmann
Vice President of Sales and Marketing, Americas
Miami Office: (305)
Mobile: (305)