2 International Hot Topics New Laws and Opportunities Around the World Janet Cooper Partner...
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Transcript of 2 International Hot Topics New Laws and Opportunities Around the World Janet Cooper Partner...
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International Hot Topics
New Laws and Opportunities Around the World
Janet CooperPartnerLinklaters & Alliance
San Francisco, CA5/6 November 2001
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Going Global - Mission ImpossiblePlan your launch
• Planning the launch
• Preparing for the launch
• Hot topics
latest news
countries to watch
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Planning the launch
• Who are you going to go with - get your crew together
HR, Company Secretarial, Legal, Treasury
Legal advisers, software and administration, communication designers, benefit consultants
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Planning the launchWhat vehicle will you use:
• Options
• Free Shares
• Share Purchases
• Cash awards
• Derivative based incentives
• Other?
Depends on
• objectives
• budget
• What’s permitted
}
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Preparing for the launchNeed to know:
• timeframe
• cost
• what decisions need to be made
• what information is needed
• what internal consents/checks
• what external consents/checks
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Preparing for the launchAny instruction manual - check it out
• useful
• manageable
• correct
• readily available
• covers your countries
• good value
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Preparing for the launch
Financially and Legally Undeveloped Countries
• No prohibitions on share offerings
• General prohibition on public offers
• General exemptions
• Specific exemption
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Hot Topics - Latest NewsIndia - trying to encourage
• Liberalisation Exchange controls - employees can remit up to $20,000 (to rise to $100,000)
Favourable tax - exempt gains made on exercise and sale of options/shares BUT limited to options granted to employees of issuing companies
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Hot Topics - Latest NewsKorea - the good and theworrisome
• The good - no filingsoptions not securitiesno numerical limit on participants
• The worrisome - tax enforcement• International revenue cooperation• Amnesty• Ensure compliance!
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Hot Topics - Latest NewsSouth Africa - no employee exemption
• Old Regimeno filings for offers to employees
• New Regimeexemption only for South African incorporated companies or external companies registered in South Africa
No penalties
business as usual
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Hot Topics - Latest NewsRussia - opening up
• Russian residents canremit up to $75,000 to acquire foreign securitieshave foreign bank accounts in OECD countries
• stock options
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Hot Topics - Latest NewsPoland - employee offers of foreign shares
• Old Regimemore than 300 participants - filings
• New RegimeNo public offer - no filingsfor employees of Polish companies controlled by foreign quoted companies
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Hot Topics - Latest NewsHungary - making things easy
• Old Regimeshares in non-Hungarian companyapproval from National Bank of Hungaryuse of broker to offer shares
• New Regimeno constraints
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Hot Topics - Latest NewsSpain - relaxing the regime• Old Regime
offer to more than 50 participants - filings
• New Regimeclearer definition of “non public” - no filings1000 employees presumption
• Favourable tax regime for employeesshares valued PTS500,000/US$2,700 tax free - hold for 3 years33% tax discount each year on shares up to PTS2,600,000/US$15,000option plans - 2 years before exercise
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Hot Topics - Latest NewsItaly - unfortunate developments
• Old Regime minor filings for all offers - achievable
• New Regime - numbersless than 200 - no prospectusmore than 200 - full prospectus
• New Regime - other exemptions:too low - aggregate value €40,000/US$36,800too high - at least €250,000/US$230,000 individual investment
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Hot Topics - Latest NewsIreland - new incentive scheme
• Finance Act 2001
• Approved Option Schemesbeneficial taxation15 February 200170% of total options to all employees on similar terms3 year retention before sell sharesno individual limit
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Hot Topics - Latest NewsUK - national insurance
• Social security cost of unapproved options
• Uncapped liability for employertransfer liability to employeescrystal ball-gazing: capp and prepay NI based on share price on 7 November 2000
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Hot Topics - Latest NewsNetherlands - taxable moment
• Grant
• Exercisableunconditional right to acquire shares
• Exercisewhen have moneymaximise tax complexity
• Don’t miss your chance to choose!
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Hot Topics - Latest NewsBrazil - exchange control and employees
• Employees canacquire securities and shares in offshore investment funds up to US$20,000 a year
no prior Central Bank permission needed
• Wider choice of offshore investment
• Must repatriate fundsif sell securitiesif leaving employment
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Hot Topics - Countries to watch
France - back to base …
• Tax approved stock option planswhen was plan adoptedstockholders to approve new plans every 38 monthspre May 2001 plans - every 5 years
• Tax consequencesincome tax and social security on exercise
• Electronic communicationsinternet website offer - filings
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Hot Topics - Countries to watch
UK/Europe - IASB proposals
• Are options a company cost?
• International IASB - consultation to December 2001
• Exposure Draft - Mid 2002
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Hot Topics - Countries to watch
Belgium - complications
• Securities filingsare directors also employees?
• Odd one out - tax on grant of options
• Translations
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Hot Topics - Countries to watch
China - the offshore offer
• Ideological barriers
• Undeveloped legal and financial system
• Strong bureaucracy and harsh penalties General prohibition on share offers
No procedures
No exemptions
• So what do you do?the offshore offerthe internet replacing powers of attorney
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Hot Topics - Countries to watch
Argentina/Chile/Brazil - the social security trap
• Substitute for wages?
• “Regular operation of the plan”
• Part of employment contract
• Social security payments
• South American trend?