GGI European Regional Conference in Lausanne, Switzerland

Lausanne 1

The 2015 GGI European Regional Conference took place in the magnificent city of Lausanne, Switzerland, between 23 and 26 of April, 2015 also celebrating GGI’s 20th anniversary. The event was hosted by the GGI member firm Fiduciaire FIDAG SA and welcomed over 200 delegates from all around the world staying at the spectacular Beau Rivage Palace, located on the shores of Lake Geneva.

The conference kicked off with a very well-attended meeting of the International Taxation Practice Group on Thursday afternoon, prior to the formal start of the Conference. The welcome dinner took place later in the evening at the Olympic Museum, where all delegates could also enjoy a private tour of the museum itself. During the dinner, Michael Reiss von Filski, Global CEO of GGI, introduced the various new members and candidates who were attending a GGI conference for the first time.

Lausanne Claudio

The Friday programme started with a welcome speech delivered by Claudio G. Cocca, President and Founder of GGI, and featured a series of interesting contributions by the two keynote speakers.

Keynote speaker Prof Benoît Dubuis

Prof Benoît Dubuis discussed innovation as the new currency of competition. He analysed the current situation in Switzerland, facing times of great change and transition. The country produces many winners as a result of its innate ability to channel its passion into action and turn involving ideas into successful businesses. During his contribution, Prof Dubuis explored sustainability strategies that are required to maintain this status, as well as associated threats and opportunities.

Keynote speaker General Peter E. Regli

The second keynote speaker scheduled for the morning session was General Peter E. Regli, who delivered a speech regarding the current threats to Swiss homeland security. The topic of safety is becoming ever more important today. Finding the perfect balance between personal freedom and data protection versus security, precaution measures and observation is difficult and causes much debate. General Regli recalled the security developments of the last 14 months and assessed the importance of the war in Ukraine, Islamic State and the cyber war, as well as their importance for Europe and our countries. Lastly, he gave a presentation on the Swiss security system and the geopolitical scenarios likely to occur in the near future.

On Friday afternoon, two rounds of various practice groups took place, during which experts from all over the world exchanged technical knowledge and visions as well as exploring opportunities for future joint business projects. After a very interactive day, member delegates were invited to a dinner cruise on Lake Geneva, enjoying the stunning sunset view and delicious Swiss food.

The Saturday session featured further meeting opportunities. Randall S. Leff and Gary Freedman (Ervin Cohen & Jessup LLP, USA) led the session “Creating and sustaining an environment that stimulates business development activities”. The workshop focused on the challenges of creating and sustaining an environment that stimulates business development activities. It featured lively discussions about the cultural differences between European and North American cultures, including which models work best and where, and what each can learn from the other. As part of this process, the importance of creating a positive cultural perspective within the firms and stimulating an attitude of abundance rather than scarcity were discussed, together with the details of how Ervin Cohen & Jessup has implemented such a programme and the results that have been achieved so far.

Lausanne Exchange of Ideas

During the workshop “CPA firm growth: selling HR”, Wim Cox (Cox 360, Netherlands) presented a human resources (HR) model which enables an accountant to navigate clients through the complete HR value chain, from selecting the most promising candidates in the recruiting and assessment process to predicting attrition and identifying the characteristics of successful leaders. The unique HR model can be applied universally and helps in selling proposed HR measures, such as investment needs, learning development and hiring plans.

“The Post FATCA Form W-8: how to help your clients to correctly complete this form” was the topic introduced by Galia Antebi (Ruchelman P.L.L.C., USA). In today’s world, no bank or investment fund will open an account or maintain an existing account without obtaining Form W-8 or equivalent from the institution. It is therefore essential to know how to complete it correctly. This was the main topic of the session.

Oliver Biernat (Benefitax GmbH, Germany) and Dr Karl Friedrich Dumoulin (FPS, Germany) led the “What can we learn from people with charisma?” workshop. Charisma is a trait associated with many historic figures, such as Mahatma Gandhi or Winston Churchill, and leaders in religion, politics, cultural life or economics. However, there are also darker connotations to charisma, which link to evil throughout the world. This workshop explored the positive lessons that can be learnt from people with charisma. It also tried to answer the question: what constitutes charisma, confidence, optimism, emotion, empathy, intelligence and interaction? The aim was to determine how these elements can be transposed into the daily lives of GGI professionals.

Domizia Badodi (Studio Legale Baldi, Italy) led the workshop “Across the Atlantic: U.S. Chapter 11 and Italian composition with creditors proceeding”, which explored the features of the Chapter 11 of the U.S. Bankruptcy Code and provided examples of famous companies, such as Metro-Goldwyn-Mayer, Napster and General Motors, which took advantage of it. She also provided an overview of the consequences and benefits for Italian companies. The workshop was an active forum where participants could discuss actual and practical cases and compare the respective national rules.

Networking Lausanne

The last workshop scheduled for the morning was held by Michael Reiss von Filski who, with his “Understanding GGI” session (compulsory for new members and candidates), provided an interactive overview offering a better understanding of the daily life of GGI, membership criteria, selection of members, conferences, workshops, practice groups, charter and the functioning of Head Office, Regional Offices and Executive Committee.

During the second half of the day, delegates and accompanying persons could enjoy a variety of sightseeing options such as visiting the Chillon Castle, a tasting of Swiss wines, a little time out at the hottest thermal baths in Switzerland, the Les brains de Lavey, or the Salt Mines of Bex to discover the various techniques of salt mining from 1684 to the present day.

The conference ended on a high with a gala dinner at the Beau Rivage Palace, featuring entertaining activities such as acrobatic performances on a flag pole, a magic show by Federico Soldati, former winner of Italy’s Got Talent, and a dancing session with the Irish band Spring Break. All delegates attending this fantastic black tie event enjoyed themselves as the conference came to a successful end.

The 2016 GGI European Conference will take place in Warsaw, Poland, between 21 and 24 of April (tbc). GGI is pleased to invite all the members to this event to enjoy another splendid meeting together.

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GGI German Speaking Chapter in Salzburg, Austria

Salzburg with Salzach River, Austria

As hosts of this year’s GGI German-speaking conference, GGI member firm Prodinger & Partner (www.prodinger.at) are delighted to welcome many German-speaking GGI colleagues to the banks of the Salzach River in September this year. The law firm has drawn up an appealing and varied programme which will combine specialist subjects and lively exchanges of experiences and knowledge with culinary delights.

The programme begins on Saturday with a speed networking session. This is a great opportunity to introduce yourself and your company while establishing contact with the many new German-speaking GGI member firms expected to attend.

Dr Josef Fritz will hold a presentation on the subject of “Supervisory Board success factors – Supervisory and Control Boards in flux”. Afterwards, participants will be encouraged to take part in a discussion on this subject and will have the opportunity to report on their own experiences and explain the situation in their countries.

Roland Haslauer of Prodinger & Partner’s speech will tackle the subject of “Green Business – Future Driver of Economic Success”.

Once official business for the day is over, participants will be invited to head over to the m32 restaurant. Aperitifs will be served on a terrace offering spectacular views over Salzburg. From here, there will be a guided walking tour to the Salzburg Marionnette Theatre, where GGI conference participants can enjoy an exclusive show. After this amazing performance, the tour continues to the oldest restaurant in Europe, St Peter Stiftskeller, where the event is to be brought to a close.

Dr Manfred Schekulin will be happy to recommend cultural activities, golf courses and walking tours around the region. Please contact him should you wish to extend your stay.

German Speaking GGI members who have not yet done so, can register using the online registration tool at http://www.ggi.com (member login > Events). The conference programme is also available on the website, as well as the hotel booking form.

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Recap: GGI Latin American Regional Conference in San Jose, Costa Rica

San José, the capital of Costa Rica, was the location for this year’s GGI Latin American Regional Conference.
Costa Rica Audience

Costa Rica is a country that has no army, and instead redirects its entire budget to education and health. The beauty of Costa Rica and the kindness of its people transformed the conference into a truly memorable experience.

This was GGI’s 14th regional conference, celebrating the 20th anniversary of GGI. GGI Latin America especially thanks GGI’s Founder and President Claudio G. Cocca and Global CEO Michael Reiss von Filski for their participation in the regional conferences over the years and for their care and support in this region.

Costa Rica Group Photo

Members from across Latin America, the USA and Europe congregated together at the Hotel Marriot de Costa Rica on Thursday, 16 April 2015.

A challenging programme had been put together, ensuring that business development was equally as well represented as focussed practice group meetings.

During the Latin American Council meeting, an important decision was made to hold the next regional conference (2016) in Madrid as the first IberoAmerican conference. The dates are still to be confirmed, but the most probable month will be June.

This conference had top-class speakers, including the Former Minister of Commerce of Costa Rica and the former Costa Rica Ambassador in China, Marco Vinicio Ruiz. Marco Vinicio Ruiz described the Chinese economy and the consequences in the globalised world while Edgar Herrera shared the possibilities and advantages of doing business in Costa Rica. Dr Miguel Mantelli’s regional management report underlined the perpetual exchange between the different disciplines and also between the sub-regions across Latin America.

Costa Rica leadership photo

Focussed technical sessions during the practice group meetings engaged delegates in a lively exchange of information. They covered a broad range of topics which included auditing, reporting and compliance, trust and estate planning, mergers and acquisitions as well as international taxation.

A group has been created to strengthen ties between the continents and develop new business opportunities. The region made a strong commitment to attend the world conference in Boston with the aim of reaching members from other regions. An interactive session about transfer pricing was held on Saturday 18 April, running in parallel with a lawyers’ meeting.

Costa Rica Excursion

All participants thoroughly enjoyed a well-balanced and extraordinary conference. Delegates expressed their appreciation of the host firm from Guardia Montes & Asociados. The overall organisation was great, with the typical dances during the Saturday dinner in the exclusive Country Club of San José being a particular highlight.

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GGI Nordic-Baltic Meeting in Helsinki, Finland, 10 to 12 September 2015

GGI’s third Nordic-Baltic Meeting will take place in Helsinki, Finland, between 10 and 12 September 2015 (tbc). The event will be hosted by the GGI member firm Rantalainen Accounting Services.

Kappeli Restaurant

The conference will kick off on Thursday evening with a welcome dinner at the historic Kappeli restaurant in the centre or Helsinki, followed by a seminar and a comprehensive tour of Helsinki on Friday. Rantalainen promises to introduce the city to guests from the ground, the water and the air, with the main theme of the event being: “Finland as a gateway to Russia – or not?”

Aside from fascinating presentations and workshops, all delegates can expect excellent networking opportunities and a well-balanced programme of fringe activities. One of the main objectives of the conference is to strengthen cooperation between the Nordic-Baltic GGI member firms, create synergies between them and unlock potential business opportunities.

With an urban population of 1.2 million, Helsinki is the largest city and capital of Finland. It is located in the south of the country, on the shore of the Gulf of Finland, an arm of the Baltic Sea. The nearby municipality of Vantaa is the location of Helsinki Airport, which is approximately 18 km from the city centre.

There is much to discover in Helsinki, with not only a fine selection of museums such as the National Museum of Finland, the Helsinki City Museum, the Design Museum and the Finnish National Gallery consisting of three museums, but also many excellent restaurants. Host firm Rantalainen Accounting Services has created a varied programme to introduce their home city to all participants. They will provide a first impression during a short city walk from the seminar venue to the harbour, passing Senate Square.

The Senate Square and its surroundings form a unique and cohesive example of neoclassical architecture. The square is dominated by four buildings: Helsinki Cathedral, the Government Palace, the main building of the University of Helsinki and the National Library of Finland. Be sure to remember a camera as Helsinki Cathedral, which celebrated its 150th anniversary in 2002, is arguably Finland’s most famous and photographed building. The oldest stone building in Helsinki is the Sederholm House located on the south-east corner of the square.

The Senate Square also hosts a sound installation called the Sound of the Senate Square. It is a modern version of the European “Glockenspiel” and can be heard every day at 5:49 pm as it travels from one building to the next. The composition runs for 5 minutes and 18 seconds and is composed by Harri Viitanen and Jyrki Alakuijala.

Suomenlinna

For lunch, participants will enjoy a sightseeing cruise through the archipelago in a historic sailing vessel and visit the world heritage site Suomenlinna whilst enjoying a Finnish meal on board. This breath-taking tour is followed by a visit to the new Finnair Skywheel to get a bird’s eye view of the city.

GGI member firm Rantalainen Accounting Services recommends that those attending combine their journey to Helsinki with a visit in St. Petersburg. No visa is required for cruise customers.

The conference invitation and programme, as well as the registration form can be viewed and downloaded in due course on http://www.ggi.com (member login > Events). GGI members can then register directly with the host firm.

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Leadership through a collaborative culture | GGI Leadership Forum in Eisenberg, 11 to 14 June 2015

Hotel Das Eisenberg
Another GGI highlight is fast approaching: the Leadership Forum in Eisenberg, Austria.

Leadership in GGI member firms presents a particular set of challenges. Those attending the GGI Leadership Forum will discuss several concepts of business leadership as they apply them to independent professional firms. The planned presentations, workshops and discussions will provide a forum for experienced and knowledgeable input from GGI business leaders. Many do not have someone in their business with whom they can discuss matters of leadership, strategy, family issues, the intersection of personal and business cash flow and the toll that the business can take on their personal lives.

The GGI Leadership Forum is also a unique opportunity for partners and managing partners of GGI member firms to explore a critical and persistently frustrating problem: what don’t I know that could be holding my business back from healthy and robust growth?

The aim of this Leadership Forum is to have a vivid exchange of ideas, to allow quality networking amongst partners and managing partners of GGI firms and to discuss concepts and strategies that increase business, enhance marketing activities, assist decision-making and generate new ideas, in a pleasant environment with like-minded fellow members from all over the world.

Do not miss the first GGI “World Café”. The purpose of the two sessions on Friday is to explore aspects of leadership in an interactive and relevant capacity for attendees.

In the morning, participants will discuss: “The leader’s role in realising potential through collaboration – going beyond stakeholder engagement to foster collaboration.”

Many leaders today try to incorporate collaboration and relationships into both their own leadership values and the culture of their business, but many fail. This failure comes from a mix of challenges: lack of clarity on a cultural definition of collaboration, appropriate personal skills (e.g. walking the talk), and finally embedded mechanisms and methods within their businesses to make collaboration really work and stick.

Leadership Workshops

Over the course of this session delegates will explore, first via a short presentation and discussion and then via World Café methodology, some fundamental elements that go into ensuring a collaborative environment and culture, helping participants move towards a clearer definition of a workable collaborative culture for their own business, and across the GGI network going forward.

The Friday afternoon session will help participants build on the outputs from the morning session, identifying some practical challenges and opportunities to potentially take forward to help deliver on the envisioned culture. The theme of this second session will be: Becoming Collaborative – applying the whole system collaboration model. Applying some of the key learnings from the first session and again utilising the World Café methodology, participants will self-select joining a group to focus on how they might practically take on a collaboration challenge and/or seize a collaborative based opportunity.

On Saturday morning Prof Dr Teodoro Cocca and Marko Mihkelson will be delivering speeches. Many of you already know Prof Cocca from previous GGI events. His CV is included in the conference documents on GGI’s website.

Eisenberg Speakers 2015

Marko is the chairman of the Foreign Affairs Commission in the Estonian Parliament and also a member of the European Union Affairs Commission in the Estonian Parliament. He is well known as an expert in the field of Foreign Affairs in Estonia.

Two sightseeing tours on Saturday afternoon round off the programme and offer an excellent networking opportunity. Delegates might either join a tour of a Slovenian Vineyard, or a Walking Tour of Graz. Depending on the weather, a team-building exercise on the River Raab might be offered as well.

Hotel Das Eisenberg is situated in very attractive surroundings and offers all attending the ideal conditions to relax a little in addition to the Conference with top-notch speakers and interactive workshops.

For example, one option is to take a bicycle tour (bikes are available from the hotel) to one of the numerous castles or palaces for which the region is so famous.

The Burgenland, which is not far from the Slovenian and Hungarian borders, has an incredible amount to offer in terms of both landscape and culture.
GGI members who have not yet done so, can register using the online registration tool at http://www.ggi.com (member login > Events). The Conference programme is also available on the website, as well as the speakers’ CVs.

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GGI Italian Business Summit, 29 to 31 May 2015 in Florence, Italy

Foto Florence

By Stefania Turco

With the start of EXPO 2015 in Milan and the announcement from the Holy See in Rome of an “Extraordinary Jubilee Year” for the church, Italy has been in the headlines this May.

For GGI and for most of its members the truly big news is that GGI member firm Studio Sistini-Grossi in Florence will host the third edition of the Italian Business Summit (IBS).

Studio Sistini-Grossi located right next to the historic heart of Florence is proud to welcome GGI members and other participants to IBS 2015. It will take place in their locale where traditional, elegant Florentine style meets the most advanced and efficient technological solutions facilitating global connectivity. Just as Studio Sistini-Grossi assists clients in their own business, they will also take you on an incredible three-day journey of delicious food, beautiful sights and interesting group activities.

With Studio Sistini-Grossi hosting this year’s IBS, we would now like to present Dr Federico Grossi – a name worth remembering. Dr Federico Grossi is a graduate of Economy and Economic Sciences from Florence and Santa Clara University. In planning for the IBS 2015, he has shared not only his extensive ability and expertise, but also a great deal of time with GGI to ensure that all delegates have an unforgettable experience.

There are two practice groups organised for the Friday afternoon, when participants are scheduled to arrive: ITPG and LDR. The meetings will focus on Italian business, law and professional interaction with the world in general. Speakers will include Claudio G. Cocca, Ugo Girardi, Oliver Biernat, Johan Langelaar, Arlene Rochlin, Patrizia Giannini, Stefania Averni and a representative from the National Council of Notaries (Consiglio Nazionale del Notariato) among others.

The Saturday morning session will focus on Italian business, including conventions and hallmarks of the way in which business and professional activities are traditionally conducted in Italy.

Please remember to bring one a variety of outfits suitable for different occasions (casual, business and elegant evening). Delegates also need to bring a desire to meet new people and gain knowledge, because as one of Florence’s most famous sons Dante himself once wrote: “We were not made to live like brutes, but rather to follow the path of virtue and knowledge.”

We look forward to meeting many GGI members in Florence.

 

GGI member firm

Studio Sistini-Grossi

Auditing & Accounting, Tax, Advisory, Corporate Finance, Fiduciary & Estate Planning

Florence, Italy

Dr Federico Grossi

E: studio@sistini-grossi.it

W: www.sistini-grossi.it

 

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GGI is proud to announce three new firms in Europe

.LUTZ | ABEL Rechtsanwalts GmbH – Germany

Founded in 1994, LUTZ | ABEL Rechtsanwalts GmbH has established itself as a well-respected business law specialist. The history of the firm has been marked by steady growth and the efficient handling of mandates and projects.

LUTZ | ABEL advisory services are based in an area where legal matters and business management coincide. Their expertise covers all key areas of Business Law: Antitrust and State Aid Law, Banking and Capital Market Law, Corporate Law, Intellectual Property Law, IT and Data Protection Law, Labour Law, Public Law, Restructuring / Insolvency, Real Estate, Venture Capital / M&A and Public Procurement Law.

Headquartered in Munich they currently have 39 lawyers, overseen by 21 partners, and overall 61 staff. The company provides an excellent level of legal qualification, business know-how with a sound knowledge of a wide range of different sectors.

BNHS.151845

Dr. Bernhard Noreisch

Munich
Germany
T: +49 89 544147 0
F: +49 89 544147 99
E: noreisch@lutzabel.com
W: http://www.lutzabel.com

 


 

Fondia Oy – Finland

Fondia Oy is a leading Finnish law firm established in 2004 headquarted in Helsinki with additional offices in Finland, and abroad.

 

Fondia Oy is highly regarded for its unique concept offering companies complete legal departments as a service (LDaaS).  The firm has also extensive traditional legal services advising clients  on among others Corporate, Employment, IT&IP, Financing, Mergers and Acquisitions, Real Estate and Dispute Resolutions.

 

The Company employs more than 100 persons of which more than 60 lawyers and has the ability to serve its clients in English, Finnish, Swedish, Estonian, French, German and Italian.

MartenJanson_Fondia.163541

Mårten Janson

Helsinki
Finland
T:  +358 20 7205 400
F:  +358 20 7205 499
E:  marten.janson@fondia.fi
W: http://www.fondia.fi/

 


 

COX360 – The Netherlands

Established in 1995, COX360 is a professional accountancy and tax consulting firm based in Hoofddorp, The Netherlands. Hoofddorp is part of the Greater Amsterdam Area.

COX360 specialists offer support in a wide range of fields including International Tax Advice, Tax Compliance Services, Payroll Services, the Compilation of Financial Statements, and Monitoring. The firm boasts a large audit practice. Having a personal and long-lasting relationship with their clients and offering flexibility and acting proactive is key to the services they provide.

COX360 helps entrepreneurs and medium sized enterprises how to prepare for new business models and new kinds of contractual relationships. In addition to traditional services of audit, assurance and tax, COX360 is helping clients to succeed by offering effective consulting services in the field of marketing and sales support, HRM, and IT.

COX360 have 4 partners and 40 professional staff who are multidiscipline and multilingual professionals with the ability to serve their clients in Dutch, English and German.

RenvanZelst_cox.164125

René van Zelst

Hoofddorp, The Netherlands
T:  +31 23 55 55 000
F:  +31 23 55 55 005
E:  r.vanzelst@cox.nl
W: http://www.cox.nl

#NewsFlash: GGI looks to the future with the addition of three new outstanding firms

Kikivarakis & Co. – The Bahamas

Kikivarakis & Co. is a professional services firm based in the Bahamas, founded by an experienced team of principals whom collectively have over 130 years of experience in providing financial advisory services to the public and private sector.

The company specialises in Audit & Accountancy, Tax Consulting, Insolvency, Corporate Advisory, Forensic Investigations, Litigation Support, Business Management, Real Estate and Support Services.

Kikivarakis & Co. has a staff of twelve professionals including five directors; they provide services in English.

Kareem Kikivarakis

Kareem Kikivarakis

Nassau, The Bahamas

T: +1 242 327 0399
F: +1 242 327 1319
E: info@kikivarakis.com
W: http://www.kikivarakis.com


Grow Finance – Estonia

Grow Finance are an Accounting company based in Estonia. They opened in 2000 and for the past fifteen years have developed steadily through expansion of services, specialising in business development. They offer support to compile business plans, provide advice and help in forming support applications. In addition they also offer traditional business and financial leading services.

The company has a strong emphasis on outsourced accounting. This is an excellent solution for small and mid-sized companies.

With a multidisciplinary team of ten professionals overseen by one partner, they are a multi-lingual firm, with the ability to serve their clients in Estonian, English, Finnish and Russian.

Ulvi Tallo

Ulvi Tallo

Tallinn, Estonia

T:  +372 6850 800
E:  ulvi.tallo@grow.ee
W: http://www.grow.ee


Delta Partners Certified Public Accountants S.A. – Greece

Delta Partners Certified Public Accountants S.A. is GGI’s newest European member firm. Their corporate headquarters are located in Athens and there is a branch office in Thessaloniki allowing them to offer full services throughout Greece.

The company provides Audit & Assurance, Advisory, Tax and Accounting Services in Greece. More specifically, they offer a full range of value added professional services to a wide range of clientele consisting of all kinds of legal entities, which are operating in various industries in Greece, some of them listed on the Athens Stock Exchange.

There are 4 partners and approximately 50 professional staff who are multidisciplinary and multilingual professionals with the ability to serve their clients in Greek, English, French, German and Italian.

Akis Damilakos

Akis Damilakos

Athens, Greece

T:  +30 211 10 95 700
F:  +30 211 10 95 790
E:  a.damilakos@deltapartners.gr

ITPG Winter Meeting 2015

High-quality tax training, recharging the batteries and cocktails

Oliver Biernat

In addition to the obvious benefit of professional development, tax meeting in the south of Spain in February certainly included some other pleasing aspects. The meeting at hotel El Fuerte Marbella was perfectly located directly on the beach and within short walking distance of Marbella’s old town. Only one participant complained that it was “only” 18 degrees centigrade and sunny while he had been enjoying 30 degrees when he left his home country; South Africa.

The meeting attracted 44 delegates and several accompanying persons to Marbella, coming not only from Europe, but also from Canada, Colombia, India, Mexico, South Africa and USA. This gave the event a truly international flavour. It was an opportunity for old friends to catch up and new acquaintances to be made.

A short walk started off the meeting on Thursday evening. Our hosts, GGI Member firm Javier Carretero y Asociados (JC&A) Abogados, represented by Maria José Rubio and Santiago Lapausa, introduced the participants to the tapas culture in nearby bars. In a relaxed atmosphere, all participants had the chance to get to know each other while enjoying delicious food and drinks.

As global chairman of ITPG, I opened the technical programme with a presentation about international tax planning software on Friday morning. After the official start of the meeting, Professor Robert Anthony took over and introduced a case study on international holding and trade companies.

Six team leaders then formed six groups with the participants, identified by scarves of different colours. Each team had three hours to prepare a 10 minute presentation explaining: “Which country would in their opinion be best to incorporate a holding company?” This was very intense and involved highly practical tax work in small groups.

After listening to all six presentations, the jury (Professor Robert Anthony, Claudio Cocca and I) decided on the winners: Team Purple, which included Julie Bryant (UK), Viviane Moro (France), Bärbel Wierzoch (Germany), Claudine Heinrich (France) and Oyvind Baltzersen (Norway). The lucky winners were awarded a bottle of French champagne, sponsored by Benefitax.

As the weather was extremely good on Friday, lunch was laid outside the hotel with a panoramic view of the Mediterranean Sea.

In the afternoon, another challenge awaited the participants and accompanying persons. In a teambuilding event, eight teams – all with members from different countries – were equipped with a map of Marbella, a questionnaire and some pesetas and had to make their way through the old town of Marbella. To successfully finish this town rally, team members had to answer questions and fulfil various tasks, not least demonstrating their drinking skills and dancing the authentic Spanish Flamenco. The afternoon was enjoyed by all, with some already planning to return to Marbella at some point in the near future.

In the evening, dinner was organised at the Club Marítimo Alevante on the harbour-front in Marbella. The winners of the teambuilding event received a prize and celebrated their success. As promised, all attendees were served a delicious Sex on the Beach cocktail.

On Saturday, I had the privilege of moderating technical tax sessions throughout the day. Ashish Bairagra (India) started with a presentation on “Taxation of indirect transfers and how do different countries tax such indirect transfers”. That was followed by a case study on “Base erosion/profit shifting” chaired by Klaus Küspert (Germany). I was joined on the panel by Brian Marita (USA), Julie Bryant (UK), Viviane Moro (France), Carlos Frühbeck (Spain), Sergio Finulli (Italy) and Artur Plutowski (Poland).

After the coffee break, I updated the participants on internal ITPG topics, the regional chairs reported news and projects from their regions and Federico Grossi introduced the next Italian Business Summit in Florence, Italy (30 May 2015). Before lunch, Robert Worthington (Canada) presented on “Cross-border financing using hybrid instruments” and Huub Kapel (Netherlands) on “Art 15 OECD/split salary”.

After lunch, Matteo Bedogna (Italy) shared his knowledge on “Transfer pricing litigation – case history with the Italian tax authority”. He was followed by Arlene Rochlin (Italy), who talked about “Compliance is elementary, my dear Watson” covering the elements of compliance for both accountants and lawyers.

After the coffee break, our host Santiago Lapausa (Spain) discussed the “Spanish Golden Visa and the Spanish tax reform”. Last but not least, Stanley Ruchelman (USA) informed on “Treaty Abuse under B.E.P.S. – L.O.B.? G.A.A.R? Both?” and Marc Nideröst (Switzerland) gave an “Update on planned major corporation tax reform in Switzerland”.

At 5.40 p.m. the meeting was closed and the participants were given a little spare time to relax. In the evening, the successful conclusion of the meeting was celebrated with complimentary drinks in the hotel lobby followed by dinner at Restaurante Buenaventura in the old town. At around midnight, more than half the attendees decided to go for another BEPS session, this time standing for “Beer Every Person Slurps”, in the nearby Irish the Claddagh bar with live music and live dancers in the shape of GGI members. After the pub closed, some went on to a discotheque near the beach with the hosts, where they danced into the small hours.

Those who had booked the golf training for beginners on Sunday morning went to the Monte Paraiso Golf Club in Marbella. In a beautiful surrounding, GGI members received individual and group training in putting and driving from golf professionals. After almost three hours, all became golf masters and five GGI teams battled against each other in a competition of two holes. All teams did very well and celebrated their newly learned skills in the open air restaurant of the golf club with a wonderful lunch of salads, paella and dessert accompanied by Spanish summer wine.

All feedback has been positive and the combination of high class technical tax topics, networking opportunities and city exploration was perceived as perfect by the majority of the participants. Our hosts summarised it brilliantly: “At the end, it is all about good friends having fun.”

ITPG 1 ITPG 2 ITPG 3 ITPG 4

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Russian banking system 2015: between sanctions and prospects

by Armen Danielyan

Red-square-moscow-russia-tours-wallpaper-2014-07-03-40

Today Russian economy shows all signs of slowdown and upcoming crisis with lowering oil prices and foreign economic sanctions tied to geopolitical tensions as main factors lying at the root of it.

Introduction of the US and EU sanctions against major Russian banks and oil companies banned middle- and long-term debt financing for the periods of more than 30 days. Another pressure point was major rating agencies’ lowering foreign currency sovereign credit ratings on Russia and its regions to speculative grades with a negative outlook. The direct effect of all these measures was the reduced supply and the increased cost of foreign currency borrowing in the money market.

Still the key questions are (1) to what extent the imposed sanctions influence the current state of Russian banking system and (2) what are the banking system prospects assuming the retention of sanctions through 2015.

  • To what extent the imposed sanctions influence the current state of Russian banking system

Analysis of the performance of banks included in the original sanctions list shows that the sanctions had no material adverse effect of the operations of those banks till September 2014. According to the Bank of Russia statistics their total assets rose by 18.0% during the period. The banks significantly reduced the volume of transactions with non-residents and focused on the Russian market. Transactions with residents expanded by 35.0%. A negative consequence of the imposed sanctions was a decrease in the volume of individual deposits by approximately 23% according to the Bank of Russia, but in general the funds raised from residents till September 2014 increased by more than 20%.

The effect of the second wave of sanctions was also not as adverse as it could have been. The banks covered by sanctions have substantial capital: according to the Bank of Russia data the capital adequacy ratio ranges from 10.5% to 15.7%. The banking system is stable now, although moderate negative trends resulting primarily from recent structural slowdown in the Russian economy are observed.

  • Lower liquidity

At the end of 2014 lack of liquidity in Russian banking sector was caused mainly by ruble devaluation processes as well as individual intentions to run on a bank. In order to stabilize Russian rouble exchange rate the Bank of Russia increased the key interest rate from 10.5% to 17% but it was not enough to keep rouble from devaluation and the lack of liquidity problems deepened. In 2015, in spite of the key interest rate decrease to 15%, most small and middle-sized banks suffer from liquidity challenges. Even widening the list of banks able to take part in the Bank of Russia credit auctions was not enough to ease tensions.

At the same time the imposed sanctions affect only current liabilities of banks and those banks and financial organizations that used external borrowing to cover cash deficiency will continue using this opportunity in future.

In order to solve current liquidity problem the Bank of Russia plans further key interest rate decrease, widening credit auctions and – if needed – lowering reserve ratio.

  • Assets devaluation

Rouble deposits of banks lost their value because of Russian rouble devaluation and inflation rate appreciation. Today banks act decisively to increase corporate loan interest rates aiming to reduce risks of assets devaluation. At the same time these measures cut demand for corporate loans.

Quite a different situation can be observed in retail lending. According to the Russian legislation banks and financial institutions are not in the position of changing retail interest rates unilaterally otherwise stated in loan agreement. So the bank activity in retail lending remains under pressure. As for the borrowers’ debt burden according to polling data provided by the Bank of Russia the debt burden of borrowers remained largely unchanged, and the weighted average value of the debt-to-income ratio (calculated as the ratio of borrowers’ total payments under a loan agreement for the past quarter to their total income) stays at 33%.

Despite the constant level of the borrowers’ debt burden, according to Unified Credit Bureau data an upward trend in the number of loans per borrower is observed. The situation may be challenging for the banks specializing in retail lending, especially for those with foreign currency denominated loans, as steep Russian rouble devaluation questions the timely repayment of debt.

  • Net income depreciation and demand for capital

Continuing Russian rouble weakness and exchange rate volatility also dented the confidence in the local currency and put a drain on deposits. To retain depositors, banks sharply increased interest rates on deposits which also led to a rise in their liability costs and further squeezed interest rate margins increasing balance sheet problems.

According to the official statistics net income in the banking sector in 2014 decreased 41% owing to earnings from operations dilution and charge for impairment provision increase. Losses on stock markets along with inability to attract foreign capital and increasing funding costs aggravated a problem of demand for capital.

These developments prompted the authorities to implement coordinated stabilization measures. The Bank of Russia introduced new 28 and 365 days foreign currency loans to banks with a capital over RUB 100 billion (for which 11 largest banks qualify). The government approved a RUB 1 trillion recapitalization plan for banks financed with domestic sovereign bonds (OFZ). The State Duma approved a bill allowing the government to place up to 10% of the National Wealth Fund on subordinate deposits and subordinate bonds of Russian banks. Banks will get RUB 550 billion from the National Wealth Fund including RUB 300 billion for Vnesheconombank, the state development bank, to increase «lending to organizations of the real sector». The authorities also prompted that more measures to avoid banking system crisis might be introduced.

  • Wave of bankruptcies

Responding to current tough conditions some experts await a wave of bankruptcies in 2015 with as many as 20% Russian banks at risk of folding. The Center for Macroeconomic Analysis and Short-Term Forecasting estimates that 200 banks face collapse this year and 160 – next year on the back of combination of bad loans and Russian rouble devaluation. Others are predicted to face a steep challenge to stay afloat.

These forecasts seem to be exaggerated. The resolution of Russian banking system is a prerequisite for its globalization and, according to the projections based on evaluation of already taken and planned stabilization measures the number of bankruptcies will not exceed its usual annual ratio: 20-30 banks with most weak financials.

Thus, current problems of Russian banking sector, not so much originating from the imposed sanctions, as dealing with structural slowdown in the Russian economy, are far from being critical or adverse.

  • What are the banking system prospects assuming the retention of sanctions through 2015

Taking into account (but no fully based on) the imposed sanctions the main tendencies in Russian banking system through 2015 are supposed to be as follows:

  • Net loss: Russian banks are expected to post net loss in 2015 of about RUB 500 billion.
  • Key interest rate – 13%: The expected key interest rate level will remain at the level of 13% or higher throughout the 2015, substantially increasing the overnight REPO price.
  • Authorities support: Russian authorities will continue implementing coordinated stabilization measures, including capital injection which may prevent Russian rouble from strengthening.
  • Lending revival: a RUB 1 trillion recapitalization plan for banks financed with domestic sovereign bonds (OFZ) is set to revive lending and increase loan portfolio by about RUB 800 billion annually.
  • Consolidation: Increasing dominance of state-related banks and progressive concentration of the market are likely to continue. New entrants will be limited due to economic situation and 20-30 banks with weakest financials will go bankrupt.
  • Eastern money market in focus: Over the long Russia is predicted to seek less dependence on Western capital markets in favour of Asia and BRIC countries.

Cooling economic growth, provoked by lowering oil prices and foreign economic sanctions, triggers certain challenges for Russian banking system in 2015. At the same time processes, that take place in Russian banking at the moment, will make it much more resistant to external shocks in the long run.

 

Armen Danielyan

 

Delovoy Profil

Auditing & Accounting, Tax, Advisory, Corporate Finance

Moscow, Russia

Armen Danielyan

E: Danielyan@delprof.ru

W: http://www.delprof.ru

 

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