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Structures for Private Wealth Management

Almaty, Kazakhstan

Presented by Simon Mackenzie

Partner – Ogier GroupGroup Director - Ogier Fiduciary Services

May 2011

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Contents

1. Introduction to trusts

2. Foundations

3. Companies

4. Case study and example structure

5. Administration issues

• Control

• Due diligence / “KYC”

• Confidentiality

• Incorporation

• Ongoing administration

• Liquidation

6. Features and benefits of international jurisdictions

7. How can Ogier help?

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Trusts - introduction to the trust concept

A trust is a legally binding arrangement whereby a person (known as a settlor) transfers assets to another person (known as a trustee) who is entrusted with legal title to the trust assets, not for his own benefit, but for the benefit of other persons (known as beneficiaries, who may include the settlor or for a specified purpose).

The components of a trust:

• Settlor

• Trustee

• Beneficiaries

• Trust fund

• Protector (optional)

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Trusts - structure

Letter of Wishes

Trustee

Trust Fund

Company Company Company

Beneficiaries Settled assets

Protector(optional)

Settlor

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Uses of trusts

Trusts can be established for many reasons, be it business continuity, personal succession, asset protection, tax efficiency, family governance or confidentiality. Potential benefits include:

• Provide for dependants - distributions can be made to children at predetermined ages, or for specific purposes such as funding education

• Business continuity and preservation of family wealth - pass on wealth intact through generations

• Protection of assets against future claims against the owner

• Estate planning - avoid costs, delay, legal problems, publicity and unwanted procedures on death

• Avoidance of forced heirship

• Tax planning

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Foundations - introduction to the foundation concept

• Foundations are vehicles for holding assets.

• A foundation is traditionally viewed as being somewhere between a trust and a company

• A foundation must usually be established with one or more ‘objects’. Objects can be charitable, non-charitable or a mixture of both

• Permissible objects might include, for example, benefiting a particular person or class of persons or carrying out a specific purpose or holding a particular asset

• “Ownerless” incorporated vehicle with separate legal personality

• A foundation’s powers will be exercised by its council (similar to a company’s board of directors)

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Foundations – structure

Founder

Foundation Council

Foundation(charter and regulations)

Company Company Company

ObjectsRegistered office

Advisors(optional)

Guardian(optional)

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Uses of Foundations

Common reasons for the establishment of a Foundation include:

• Business planning

• Holding assets to benefit family members.

• Succession planning to enable family assets such as businesses to benefit the next generation without the need to physically divide that asset.

• Carrying out charitable or philanthropic purposes.

• Retaining and preserving specific assets.

• Holding an asset such as a company to carry out a specific transaction.

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Companies

A company is an incorporated body with separate legal personality formed for the purpose of business or a special purpose

Uses of international companies:

• Holding vehicles

• Segregation of assets

• Funding and financing

• Listing vehicles

• etc

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Company structure

Shareholders

Board of Directors

Memorandum of AssociationArticles of Association

Business Business Business

Registered office

Advisors

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Case Study

Key considerations:

• Income for owner and family members

• Succession planning for the business

• Asset protection

• Estate planning

KazakhHolding Co.

Subsidiary Subsidiary

Businesses in Kazakhstan

Kazakh Individual

100% owns

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Example Structure Trust

Holding Company(Double Tax Treaty Jurisdiction)

InternationalHolding Co.

KazakhHolding Co.

KazakhHolding Co.

Business Assets in Kazakhstan

(Assets outside Kazakhstan)

International Holding Companies

Subsidiary Subsidiary Subsidiary Subsidiary

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Administration - issues of control

• Governance

• Potential tax liability

• Methods of retaining influence

• Trusts

• Foundations

• Companies

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Administration – due diligence / “KYC”

• Why is it required?

• Documents / information required

• Who is it provided to?

• Confidentiality

• In what circumstances could it be released?

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Administration – incorporation

• Incorporation

• Memorandum and Articles of Association

• Subscribers

• Beneficial Ownership

• Corporate Purposes

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Administration – ongoing issues

• Directors

• Company secretary

• Registered office

• Accounting

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Administration – liquidation

• Liquidation plan

• Declaration of solvency

• Filings at the registry

• Effect of appointment of liquidator

• Certificate of dissolution

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Features and benefits of international jurisdictions

• Tax neutrality

• Stable jurisdictions – politically and economically – internationally recognised by banks, multi-nationals, stock exchanges etc

• Flexible and robust regulatory regimes and effective court systems

• Confidentiality

• Flexible corporate legislation

• Exit strategies

• Internationally compliant – AML, regulation, tax – OECD/IMF/FATF/EU

• Professional expertise

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How can Ogier help?

• Integrated legal and administration expertise – “one-stop shop”

• Bespoke services tailored to individual client requirements

• Access to highly qualified and motivated staff

• Responsive and consistent client service – “can do” attitude

• Transparency / flexibility regarding fee charging arrangements

• Access to multi-jurisdictional expertise through one group

• Geographic / time-zone locations

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Our Global reach

Over 800 staff, 52 partners, 190+ lawyers and 285 professional administrators across nine jurisdictions

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Presented by

Simon MackenziePartner – Ogier GroupGroup Director, Ogier Fiduciary Services

Tel: +44 1534 504392Fax: +44 1534 504444simon.mackenzie@ogier.com

Thank you