According to a notice published on the OECD's web site, in 2014 Cyprus and 43 other jurisdictions (including Malta, the Netherlands, Great Britain, the Isle of Man and the islands of Guernsey and Jersey) confirmed that the first automatic transfer of tax information, in accordance with the standards proposed by the OECD, would take place in September 2017. It is expected that this group is likely to increase in number as the above countries are joined by other countries willing to support the automatic exchange of tax information.
Who are the target clients? Banks, Financial industrial groups
What is the project? Creation of an effective instrument for financing projects (a Credit fund)
How does the project work?
The fund is formed by paying in money.
Loan rights and rights under credit agreements are acquired by the fund, and are backed by security, sureties or bank guarantees.
Credit funds make it possible to engage in credit activities by providing loans to individuals or legal entities without having a banking license, and also to engage in project financing (by providing loans).
1. Obligations under credit agreements may be purchased from banks, and obligations under loan agreements may be purchased from other persons.
Credit funds provide a wide range of opportunities for banks to manage liquidity, they make it possible to restructure credit and loan indebtedness, and they allow lenders to clean up their balance sheets and organizations to improve their financial indicators.
2. Loans may be provided to individuals and legal entities, backed by security, sureties or bank guarantees.
Credit funds make it possible to engage in credit activities by providing loans to individuals or legal entities without having a banking license, and, in addition:
- There are no reserve requirements;
- There are no requirements relating to the loans (term of the loan, interest rates etc.) or to borrowers;
- Loans must be backed by security, sureties or bank guarantees.
3. Projects may be financed by providing loans, and credit may be obtained from banks using the assets held in the fund as security for the loan.
The advantage of using credit funds (providing loans) for project finance is that when a loan is provided for financing purposes, then the interest on the loan is not subject to profit tax. This makes the project financing cheaper.
4. Asset protection
A unit investment trust is not a legal entity. The management of UITs, as multiple-asset objects, is carried out and supervised by organizations which are licensed to do so by the Bank of Russia. Information about the owners of units in a UIT is not disclosed to anyone. Furthermore, assets held by a unit investment trust cannot be seized to satisfy debts of the management company or unit owners. All these characteristics provide a high level of protection against hostile takeover of the assets.
5. Increased Liquidity
A unit in a unit investment trust is an uncertificated security which serves as evidence of ownership of the property that is included in the UIT. Rights to such units are recorded in a register maintained by a special organization licensed to do so by the Bank of Russia. The unit has all the characteristics of a security, including the ability to use it in transactions. This makes it significantly easier to assign a business, or withdraw from it, simply by transferring the rights to the units in the unit investment trust.