basic ip structuring steps

 1. Establish an offshore IP holding company in a low-tax jurisdiction.
  a. Requires substance: Employees, property, contracts, operations, etc. to avoid giving HoldCo PE in U.S. due to US employees doing activities for IP HoldCo.
     i. Authority to contract and act on own behalf
     ii. Local country sales/marketing efforts
     iii. Foreign management and G&A
     iv. Invoicing and collections
     v. Customer support
     vi. Maintenance of accounting books and records
     vii. No U.S. trade or business activity
   b. Check the box on HoldCo's subsidiaries to give HoldCo substance from US perspective.  Subs do sales and marketing work, but do not conclude contracts with customers.  HoldCo will conclude contracts with non-U.S. customers.
   c. HoldCo performs sales and marketing functions.
2. HoldCo buys into the non-US rights of existing IP.
3. HoldCo and US Parent cost-share for future IP development.
4. HoldCo exploits IP through the sale of foreign goods.
 
Benefits: Estimated decrease in structural tax rate could be 6-12 percentage points.

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