Greeting corporate innovations: Innovation, structuring and business protection were spoken at VI Annual Legal Counselors Forum

The VI Annual Forum of Legal Counselors was held on October 24, – a special event, designed for heads of legal departments of companies. Participants of the forum discussed issues of legal support of business, corporate innovations, structuring and criminal-legal protection of business, legal professions of the future and much more. Particularly, Yaroslav Romanchuk, the managing partner of the EUCON Legal Group became the participant of the second session of the ForumCorporate Innovations”.

So, the speaker told the audience about the role of a foreign element in corporate structuring and explained the reasons for its application, performing the topic “Do owners of foreign companies have time to change their jurisdiction and introduce transparent corporate structuring?”,. Mr. Romanchuk noted that many companies use a foreign element, first of all, to meet export needs and promote their own product / goods to new markets. Also, the speaker stressed that previously the use of foreign jurisdiction helped to hide the ultimate beneficiary of the company, which made it impossible to identify the real owner. Yaroslav Romanchuk noted that up to 80% of world trade is on operations in a group of companies, and gave statistics according to which Cyprus, the Netherlands, and the United Kingdom were the main investors of Ukraine last year, although in reality these funds were the funds of Ukrainian companies reinvested in foreign jurisdictions. Thus, a foreign element in the structure of group companies was often used for reinvestment, as well as to increase the investment attractiveness of a business group for a foreign investor. The expert also pointed out necessary factors for choosing a foreign element: first of all, the absence / presence of jurisdiction in the EU’s “black list”, effective rates of tax on passive and other incomes, the existence of a convention on avoiding double taxation with Ukraine, the cost of maintaining a company (registration, office rent, etc.), as well as specific requirements (licenses, concessions, purchase of real estate, etc.).

The speaker reminded that Ukraine joined the unified international tax rules (BEPS Action Plan), committing itself to implementing the minimum standard (4 out of 15). In view of joining the BEPS plan, including signing, within the framework of its implementation of the MLI, the work of the system of automatic exchange of tax information, etc. soon the need for offshore will simply disappear: taxes will have to be paid, and concealing the beneficiary and real incomes will be meaningless and impossible. In turn, international corporate structuring is a successful, optimal, universal and profitable tool for protecting business from third parties. Mr Romanchuk has, for example, presented the neighboring Poland, which is attractive for attracting the country as a foreign element, thanks to open beneficiaries, rich financial resources and favorable investment conditions. Thus, Poland has become the most successful beneficiary of EU funding in 2014-2020, having received over EUR 111 billion of business compensation for innovation, investment in job creation, research, agriculture, green energy, etc.

In conclusion, the speaker expressed the view that Poland could be a successful alternative to offshore. Business, first of all, exporters, having registered a company in Poland, receives: 1) the opportunity to be closer to its customers; 2) the possibility to diversify risks in Ukraine, foreign exchange, inflation and a number of others; 3) access to cheap leasing programs, financial resources of Poland and the EU, the refinancing rate of the National Bank is 1.5%; 4) the opportunity to have a transparent foreign company for corporate structuring of business and asset protection in Ukraine; 5) the opportunity to significantly reduce the costs of maintaining and administering its foreign company. Mr. Romanchuk also spoke about the initiative to establish a Ukrainian Business Hub Business Center in Warsaw, which was implemented by the EUCON Legal Group. The content of this project is that there are various companies that provide a wide range of outsourcing services in various fields in one building. Clients of the Center for business services are Polish companies, the final beneficiaries of which are Ukrainian residents. So, the mechanism of the hub is that the client is able to get all the services in one place. He or she receives a legal address and can register the company at this address. In addition, UBH provides legal services to the EUCON Legal Group, which has more than 10 years of experience in the Polish market.

The participants of the event also were: Anna Vronska – Supreme Court judge, secretary of the court chamber for the consideration of cases of corporate disputes, corporate rights and securities of the Court of Cassation in the Supreme Court, Maxim Libanov – the member of the National Commission on Securities and Stock Market, etc. The Moderator of the session – Aminat Suleymanova – the co-managing partner of AVELLUM.

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