Infrastructure Bonds - Brazilian American Chamber of Commerce, Inc.

Report
Investing in Infrastructure Bonds in Brazil
Chair:
Karyn Koiffman - Kirkland & Ellis LLP
Speakers:
Celso Costa – Machado Meyer
Silvia Fiszman – Machado Meyer
José Prado – Machado Meyer
Fernando Tonanni – Machado Meyer
Richard L. Winston – K&L Gates LLP
Machado Meyer
Foreign Investment in Brazil
Offer and Distribution of Debentures in Brazil
Investment Funds
February 09th, 2012
Foreign Investment in Brazil
Direct Investment
Indirect Investment
by creating a new corporate entity
or by acquiring an equity
participation in existing Brazilian
entities
by investing in the financial and
securities market where there is no
requirement to create or acquire
participation in a Brazilian company
Legal basis:
Direct Investment: Law n. 4131/62 (the Foreign Capital Law), Resolution No. 3844/10 issued by CMN, and the Regulations of the
Foreign Exchange Market and International Capital (Regulamento do Mercado de Câmbio e Capitais Internacionais, or “RMCCI”),
established by the Central Bank by means of Circular No. 3280/2005 and amendments
Indirect Investment: Resolution No. 2689 issued by CMN on January 26, 2000 (“Resolution 2689”), and Instruction No. 325 issued
by CVM on January 27, 2000, (“CVM Instruction 325”) and amendments
3
Foreign Investment in Brazil
Direct Investment
Indirect Investment
The 4131 Investment shall be registered in the
RDE-IED Module (Registro Declaratório
Eletrônico – Investimento Externo Direto),
which is part of the Central Bank’s on-line
Information System
Non-resident investors may invest in the
Brazilian financial and capital markets
Requirements:
(a) both the Brazilian recipient company and
the foreign investor must be previously
registered before the corporate registry of
the Central Bank (“CADEMP”);
(b) the Brazilian company shall create a RDEIED number that shall link its CADEMP to
the CADEMP of the foreign investor.
Requirements:
• appoint an agent in Brazil
• fill-out an application form attached to
Resolution 2689;
• enroll himself with CVM, application to the
Brazilian Revenue Service and issue its
respective enrollment number (the socalled “CNPJ/MF”);
• register the investment proceeds with the
Central Bank (“RDE-Portfolio”);
• enter into a custody agreement with a
financial institution
4
Foreign Investment in Brazil
Types of accounts
Proprietary Account
Omnibus or Collective
Account
 The non-resident investor can be both the account holder and also a
participant in one or more accounts. The accountholder of an omnibus
account may invest his/its own funds in this same account, as long as
registration for this purpose has been requested;
 Omnibus accounts are generally available to foreign financial institutions
or broker-dealers which operate in the name of third-party investors.
5
Foreign Investment in Brazil
Restriction
in purchase
or sale
Restriction
in purchase
or sale
• securities carried out outside stock or commodities exchanges,
electronic systems or organized over-the counter markets (“Organized
OTC”) authorized to operate by CVM
• that involves securities or financial instruments traded on OTC markets
which are not Organized OTC or which are managed by entities not
authorized to operate by CVM
Exception: securities acquired through initial subscriptions; bonifications; conversions of
convertible debentures into shares, indexes referenced in securities; purchases and sales
of quotas of open-ended investment funds; and, if previously approved by CVM, delisting,
trading cancellations or suspensions, judicial settlements and the acquisition or disposition
of shares subject to shareholders agreements
6
Offer and Distribution of Debentures in Brazil
•
The debentures give to their holders the right against the company, under the conditions
contained in the issuance and, if there is, in the certificate
•
Can be made several issuances and each issuance can be divided into series. Those of
the same series have the same par value and grant their holders the same rights
•
Legal basis: Law No. 6,385/76 (the Securities Law), Law No. 6,404/76 (the Brazilian
Corporation Law) and specific regulation by CVM (ICVM 400 and ICVM 476)
•
No public issuance of securities will be distributed on the market without prior registration
and conditions established by CVM (exception: ICVM 476)
7
Offer and Distribution of Debentures in Brazil
Public Offer
No Restricted Placement Efforts Offering
Legal basis: ICVM 400
Concept: offering conducted by means of the use of lists or bulletins of sales or subscription, offering
circulars, prospectuses or any form of advertisement to the public; negotiation in stores, offices or other
premises; and use of marketing;
Realized by companies registered with CVM as public companies.
Restricted Placement Efforts Offering
Legal basis: ICVM 476
Concept: Distribution of debentures in the market with restricted sales effort, without the prior registration in
CVM;
Offerings of certain securities targeted at 50 and bought by up to 20 qualified investors.
Qualified investors: (i) financial institutions; (ii) insurance companies and capitalization companies; (iii)
pension funds; (iv) individual or legal entities holding financial investments in excess of R$ 300,000.00 and
who confirm in writing their eligibility as qualified investors; (v) investment funds organized for qualified
investors only; and (vi) portfolio managers and consultants that are duly accredited as such by CVM
8
Offer and Distribution of Debentures in Brazil
Public Offer – Comparative Chart
Register at CVM
Prospectus
Marketing
Investors
Restrictions to new offer of debentures
Admission to trading on the OTC market,
organized or not
Fiduciary Agent
Possibility of guarantees
Restrictions of maturity term
ICVM 400
YES
YES
YES
No restriction
NO
ICVM 476
NO
NO
Restricted
Qualified Investors
Minimum 4 months
YES
YES
YES
YES
NO
YES
YES
NO
After 90 days of
subscription or
acquisition
YES, possibly limited
Possible
NO
Restrictions to commercialize
NO
Due Diligence
Indication of use of funds
Convertible into shares
YES
YES
YES
9
Investment Funds
Terms and Conditions
•
•
•
Currently regulated by the Instruction No. 409
Specific regulation for specific funds, such as private equity funds, receivables funds, real
estate funds.
Regulation of the Investment Fund – approved by the administrator
1) filed before the Registry of Titles and Deeds (3 business days);
2) applied to the Brazilian Revenue Service to obtain its respective enrollment number (4
business days) and;
3) filed before CVM (until 30 days)
Purpose
Types
condominium designated for investments in assets available in the financial or capital
markets
Open-end : the quota-holder may request the redemption of their quotas at anytime
Closed-end : the redemption is only allowed upon liquidation of the fund
Lenght of
Term
Determined term
Target
Audience
General investors
Undetermined term
Qualified investors
10
Offer and Distribution of Investment Funds Quotas in Brazil
Public Offering
Legal basis: ICVM 400
Document: prospectum registered in CVM
Concept: offering of quotas with use of marketing
Restricted Placement Efforts Offering
Legal basis: ICVM 476
Concept: Distribution of debentures in the market with restricted sales effort, without the prior
registration in CVM
Offerings of certain securities targeted at 50 and bought by to 20 qualified investors
Qualified investors: (i) financial institutions; (ii) insurance companies and capitalization
companies; (iii) pension funds; (iv) individual or legal entities holding financial investments in
excess of R$ 1,000,000.00 and who confirm in writing their eligibility as qualified investors;
(v) investment funds organized for qualified investors only; and (vi) portfolio managers and
consultants that are duly accredited as such by CVM
11
Machado Meyer
Investing in Infrastructure Bonds in Brazil
February 09th, 2012
Infrastructure Bonds in Brazil – Economic Background
•
Infrastructure investments have not accompanied the economic grow of Brazil. Currently, Brazil demands
heavy investments in airports, roads, energy, telecom, ports, sanitation, etc. In addition, in the next years,
Brazil will host two of the most important sportive events: 2014 FIFA World Cup and 2016 Olympic
Games, which will also demand relevant investments.
•
BNDES (equivalent to the US Eximbank) and the Brazilian Government cannot alone support these
investments.
•
In this scenario, Law N. 12,431/2011 introduced in Brazil the Infrastructure Bonds, aiming at increasing
long term financing transactions in the private markets. In this sense, the private markets would act as a
complementary source of funding.
•
Brazilian Infrastructure Bonds were clearly inspired in the Projects Bonds model, created in 90’s and very
used in the USA, Australia, Canada and the United Kingdom.
•
Two kinds of Infrastructure Bonds: General Investment Bonds and Infrastructure Bonds (respectively,
Sections 1 and 2 of Law N. 12,431/2011).
•
In order to make attractive the Infrastructure Bonds, they were granted with certain tax benefits.
13
Infrastructure Bonds in Brazil – Possible Structures
2,689
Investor
Abroad
2,689 Custodian
Bank
Brazilian Investor
(legal entity)
Brazil
Brazilian
Investor
(individual)
Fund
Brazilian Entity
14
General Investment Bonds
• Bonds of Public Negotiation, issued by non-financial entities and regulated by Brazilian
Securities Exchange Comission (“CVM”) or Brazilian Monetary Council (“CMN”).
• Interest: predetermined interest rate, not been allowed, even partially, the usage of post
fixed interest rate.
• Requirements:
i.
Average maturity term greater than 4 years;
ii.
Call of the bond by the issuer not permitted in the 2 first years and it is not possible
its early liquidation, redemption or prepayment;
iii.
No resale commitment assumed by the buyer;
iv. Term for periodic payment of interest, if any, at intervals of at least 180 days;
v.
Prove that the bond is negotiated in regulated markets; and
vi. Simplified procedure which demonstrates the goal to allocate the funds derived from
the bond issuance in investment projects, including those related to research,
development and innovation.
15
General Investment Bonds
• Tax Benefits – Exclusive for Non-Residents
• 0% WHT:
i.
on interest produced by the bonds, when paid or remitted to beneficiary not located in
Low Tax Jurisdiction (“LTJ”) that performs financial transactions in Brazil through a
2,689 account (2,689 Investor).
ii.
0% WHT on interest derived from investment funds quotas, when such funds have
exclusively non-resident investors and invests, at least, 98% of its portfolio in General
Investment Bonds. Rules related to Infrastructure Bonds Funds must be observed.
•
0% IOF/Exchange
•
Exemption on capital gains related to the trade of the bonds at the exchange.
16
General Bonds in Brazil – Summary of WHT Taxation
2,689
Investor
Abroad
Section 1 - General Investment
Bonds
Brazil
2,689 Custodian
Bank
Non-residents:
Withholding interest Tax (“WHT”)
on the interest derived from the
bonds or by funds quotas - 0%.
Fund
IOF/ Exchange – 0%.
Brazilian
Entity
17
General Investment Bonds – Comparative Chart w/ Other
Assets
Taxation on interest
Tax
General Investment
Treasury Notes
Bond
(predetermined interest)
Other Fixed interest
Investments
IOF/Exchange
0%
6%
6%
WHT
(beneficiary not
located in LTJ)
0%
0%
15%
WHT
(beneficiary
located in LTJ)
22,5% a 15%
22,5% a 15%
22,5% a 15%
18
Infrastructure Bonds
•
Issued by a Special Purpose Entity (“SPE”), incorporated specifically to implement infrastructure or
research, development and innovation projects.
•
Infrastructure Bonds must obey the issuance requirements of the General Investment Bonds and be
issued until December 31st, 2015.
•
Projects must be considered as priority by the Federal Government – Defined by Decree N. 7,603/2011.
•
Infrastructure projects subject to Ministry approval (Ministries related to each Sectors below).
Goals of the Project:
i. implementation;
ii. expansion;
iii. maintenance;
iv. recovery;
v. fitting; and
vi. modernization.
Sectors:
i. logistics and transportation;
ii. urban mobility;
iii. energy;
iv. telecommunications;
v. broadcasting;
vi. sanitation;
vii. irrigation; and
viii. among others.
19
Infrastructure Bonds
•
Tax Benefits – For Non-Residents, Brazilian Entities and Individuals
•
On interest produced by the bonds:
i.
2,689 Investor: 0% WHT;
ii.
Brazilian Individual: 0% WHT;
iii.
Brazilian Entity: 15% WHT.
•
Exemption on capital gains in case of 2689 foreign investors that trades the Infractructure Bonds
at the exchange.
•
Benefits also applicable to financial institutions investors.
•
For Brazilian Entities, the interest payments may be excluded from the interest Tax (“IRPJ”)
calculation basis (Lucro Real), but not from the Social Contribution on Profits (“CSLL”)
•
Losses related to Infrastructure Bonds are not deductible from the IRPJ calculation basis (Lucro
Real).
•
Penalty: 20% on the amount of bonds issued if the project is not implemented. To be paid by the
shareholders of the SPE.
20
Infrastructure Bonds in Brazil – Summary of WHT
Taxation
Section 2 – Infrastructure
Bonds
2,689
Investor
Abroad
2,689 Custodian
Bank
Brazil
Brazilian Investor
(legal entity)
Brazilian
Investor
(individual)
Non-residents:
WHT on the interest derived
from the bonds - 0%.
IOF/Exchange - 0%
Brazilian Entities
WHT on the interest derived
from the bonds - 15%.
Brazilian Individuals
WHT on the interest derived
from the bonds - 0%.
Brazilian Entity
21
Comparative Chart:
General Investment Bonds vs. Infrastructure Bonds
Taxation on interest
Beneficiary
General Investment Bonds
Infrastructure Bonds
WHT
IOF/Exchange
WHT
IOF/Exchange
Non-resident
(not located in LTJ)
0%
0%
0%
0%
Non-resident
(located in LTJ)
22,5% to 15%
0%
22,5% to 15%
0%
Brazilian Individual
22,5% to 15%
N/A
0%
N/A
Brazilian Entity
22,5% to 15%*
N/A
15%**
N/A
* Regular taxes on corporate income (IRPJ and CSLL) is of 34 % (banks 40%). Interest derived from
General Bonds shall be subject to both IRPJ and CSLL but is it is allowed to discount the WHT previously
paid on it.
** Interest derived from Infrastructure Bonds will be taxed at 9% (banks 18%) by the CSLL only.
22
Infrastructure Bonds Funds
• Investment Funds created by entities authorized by CVM to perform securities and portfolio
management.
• Infrastructure Bonds Funds Portfolio:
i.
At least, 85% invested in Infrastructure Bonds; or
ii.
Investment funds, which invest in other investment funds quotas, must have, at least,
95% invested in Infrastructure Bonds Funds.
• After the incorporation of the fund, 180 days to fulfill the investment requirements above.
• If, by any reason, the fund no longer meets the requirements above, it will have 90 days to
recompose its portfolio.
23
Infrastructure Bonds Funds
• Tax Benefits – For Non-Residents, Brazilian Entities and Individuals
• On interest produced by the funds quotas:
i.
2,689 Investor: 0% WHT;
ii.
Brazilian Individual: 0% WHT;
iii.
Brazilian Entity: 15% WHT.
•
Exemption on capital gains in case of 2689 foreign investors that trades the
Infrastructure Bonds at the exchange.
•
For Brazilian Entities, the interest may be excluded of IRPJ calculation basis (Lucro
Real).
•
Losses related to Infrastructure Bonds Funds quotas are not deductible from the IRPJ
calculation basis (Lucro Real).
24
Infrastructure Bonds Funds
•
Penalty: If the Fund does comply with the portfolio requirements, it will be either
liquidated or transformed in another kind of fund. In this scenario, the interest
produced by the quotas will be taxed as follows:
i.
2,689 Investor: 15% WHT;
ii.
Brazilian Individual and Entity: 22,5% to 15% WHT and full corporate taxation (34%)
for Brazilian legal entities, or 40% for Brazilian financial institutions.
25
Infrastructure Bonds Funds in Brazil – Summary of WHT
Taxation
Section 3 – Infrastructure
Bonds Funds
2,689
Investor
Abroad
Brazil
2,689 Custodian
Bank
Brazilian Investor
(legal entity)
Brazilian
Investor
(individual)
Non-residents:
WHT on the interest derived
from fund quotas - 0%.
IOF/Exchange - 0%.
Brazilian Entities
Fund
WHT on the interest derived
from fund quotas - 15%.
Brazilian Individuals
Brazilian Entity
WHT on the interest derived
from fund quotas - 0%.
26
Items Still Under Discussion
• General Investment Bonds:
i.
Penalty (not specified by Law N. 12,431/2011);
ii.
Term for Issuance of such Bonds (specified in the Law N. 12,431); and
iii.
CMN Regulation (limitation of a tax benefit).
27
Items Still Under Discussion
• Infrastructure Bonds:
i.
Possible of inclusion of costs already incurred by the Issuer Entity (refinancing);
ii.
Non-deductibility of losses derived from the bonds for IRPJ purposes;
iii.
For Brazilian Entities: extension of the tax benefits for Social Contribution on interest
(“CSLL”) purposes; and
iv. CVM Regulation about the information and language to be included in the
Prospectus.
28
Items Still Under Discussion
• Infrastructure Bonds Funds:
i.
Term for compliance with the Fund portfolio requirements
29
Richard L. Winston
Investing in Infrastructure Bonds in Brazil
An Overview of the Opportunities Available to Foreign Investors
Brazilian-American Chamber of Commerce
New York City, NY
February 09th, 2012
What Does a Lower Interest Withholding Tax Mean For
Bonds Issued Under Law 12.431?
•
Interest payments made by the Brazilian corporation are generally deductible against
the Brazilian corporate interest tax (34% tax rate) of the Brazilian corporation issuing
the instruments.
•
When the interest withholding tax drops from 15% to 0%, the Brazilian corporation
paying the interest retains its same interest deductions against its 34% corporate
interest tax, but the holder of the corporate instrument earns a greater post-tax return
on investment.
•
The Brazilian corporation issuing the instruments can thus offer a lower overall
interest rate to investors while allowing for a greater after-tax return to those same
investors (compared to other market investments).
•
Cheaper borrowing costs can produce a greater return on investment for the Brazilian
corporation.
31
U.S. Tax Planning for Brazilian Inbound Investment
•
The Brazilian corporate interest tax rate is 34% (25% CIT + 9% CSLL).
•
The top U.S. corporate interest tax rate is 35%, plus 0-9% state corporate interest tax (+40%).
•
The goal for most U.S. companies investing in Brazil will be to strip the Brazilian earnings base to
reduce the overall effective corporate interest tax rate of the Brazilian corporation.
 One technique that is commonly used to strip away the 34% taxable base in Brazil is the
creation of deductible interest payments through the issuance (by the Brazilian company) of
debt instruments.
 Interest stripping is limited by Brazil’s thin capitalization rules (generally, a 2:1 debt/equity
ratio is allowed).
 Brazil imposes withholding taxes on interest payments, but paying the withholding tax (15%
on the gross amount) is generally worthwhile to earn the financial benefits of a tax deduction
(deduction against 34% taxable interest), assuming that the Brazilian company is moderately
profitable.
•
Because U.S. corporate interest tax rates are high (+40%), there is usually no hurry to repatriate lowertaxed funds back to the United States.
•
Tax deferral is usually less important if the offshore profits are taxed at higher rates.
32
U.S. Tax Planning for Brazilian Inbound Investment
Deductible Payment Example
U.S.
Corporation
(+40% Tax Rate)
Brazilian
Corporation
(34% Tax Rate)
Interest Payments
(1) Deduction against 34% taxed interest
(2) Only 15% WHT on regular interest
and “interest on equity”
(3) 0% WHT on special instruments issued
under Law 12.431.
Royalties Payment
(1) Deduction against 34% taxed interest
(2) Only 15% WHT (no CIDE on software)
33
Does Law 12.431 Really Benefit the typical U.S. Investor?
•
When the interest paid by the Brazilian corporation is received by the U.S. corporation, the U.S.
corporation must pay tax on the interest at a corporate interest tax rate of 35%, plus 0-9% state
corporate interest tax (+40%).
•
The U.S. corporation will be entitled to claim a “dollar for dollar” direct foreign tax credit (for any
Brazilian taxes paid) against its U.S. federal (and state) corporate interest taxes.
•
Does the U.S. corporation really enjoy an advantage if the Brazilian withholding tax (on a Law 12.431
investment) is reduced to a 0% tax rate rather than a 15% tax rate?
 If the Brazilian withholding tax on a $100 interest payment is $0, then the U.S. corporation will
pay $40 of corporate interest taxes to the United States (based on a 40% federal plus state tax
rate) and $0 to Brazil.
 If the Brazilian withholding tax on a $100 interest payment is $15, then the U.S. corporation will
apply a $15 foreign tax credit against its $40 U.S. tax burden ($25 of taxes to the United States
and $15 to Brazil).
 Either way, the U.S. corporation still pays $40 of total taxes, although the U.S. corporation may
appear more “patriotic” to the United States if it takes steps to reduce the Brazilian interest
withholding tax rate and pay higher taxes to the United States.
•
In reality, the U.S. corporation will always try generate low-taxed foreign interest due to the way that
the U.S. “foreign tax credit system” operates, which sometimes places U.S. corporations in an “excess
foreign tax credit” position.
34
Brazilian Sociedade Anônima Versus Limitada
U.S.
Corporation
(+40% Tax)
U.S.
Corporation
(+40% Tax)
99.9%
loan
“Disregarded”
interest
loan
99.9%
interest
U.S. LLC
U.S. LLC
0.1%
Brazilian
S.A.
(34% Tax)
0.1%
Brazilian
Limitada
(34% Tax)
35
U.S. “Check-the-Box” Rules – “Checking” the Limitada
•
The U.S. tax rules allow U.S. taxpayers to “elect” to treat certain types of foreign entities as
“tax transparent” for U.S. interest tax purposes (our so-called “check the box” elections).

A U.S. corporation may file a “check the box” election for a Limitada, but not for a Sociedade
Anonima (“S.A.”).
•
If the Limitada, which requires 2 owners under Brazilian law, can be structured for U.S.
purposes as a single-member entity, it will be treated as a “disregarded” entity for U.S. tax
purposes
•
If the Limitada is treated as “disregarded” for U.S. tax purposes, it will be treated as a
“branch” (all assets and liabilities of the Limitada will be deemed to be the assets and
liabilities of the owner(s)).


•
Any loans or licenses from the U.S. parent to the Brazilian subsidiary would also be
“disregarded.”
If, for example, a loan is “disregarded,” the interest payments will give rise to a Brazilian
corporate deduction, but there will be no U.S. corporate inclusion of interest because the loan
will not exist in the eyes of the United States (only Brazilian interest withholding taxes of 15% or
0% will have been imposed).
Problem: the “special purpose entities” (SPEs) that are generally used to benefit under Law
12.431 must be S.A.’s rather than Limitadas.
36
Interest-Stripping Structure Which Generates Tax
Deferral of Low-Taxed Brazilian interest
U.S. Corp
Equity
99.9%
Dutch
CV
Loan (0% Dutch interest withholding tax)
99.9%
Dutch BV
or
Cooperative
Brazilian Withholding
Tax
“Disregarded”
Loan
99.9%
Back-to-Back Loan
Small “spread” earned by
Dutch BV (small Dutch
tax)
U.S.
LLC
0.1%
Interest = 15% or 0%
WHT (gives rise to a tax
deduction against 34%
interest tax).
Brazilian
Limitada
(or S.A.)
37
“Low-Tax Investor” Strategy
•
For a “tax-haven” investor, any Brazilian tax is a “bad” tax.
•
The typical tax-haven investor will simulate the same strategies used by U.S. multinational
corporations that have “excess” foreign tax credit positions which cannot be easily used.
•
For many years, the U.S. Limited Liability Company (“LLC”) was considered to be the perfect
“intermediary” investment vehicle for a tax-haven investor investing in Brasil.
•
The U.S. LLC, when owned by a foreigner, is now “gray-listed” by the Brazilian government.
 U.S. LLCs with foreign owners that invest in Brazilian companies will create “thin
capitalization” problems for Brazilian companies that wish to issue debt instruments.
 Tax deductions to the Brazilian company will be limited if “thin capitalization” rules apply.
 Are the financial instruments set forth under Brazilian law No. 12.431 subject to
Brazilian thin capitalization restrictions? Yes.
•
The U.S. Limited Partnership (“LP”) is now commonly used by offshore funds to provide the same
benefits that the U.S. LLC formerly provided.
38
Low-Tax Investor Strategy Under Law 12.431
•
The Brazilian tax authorities understand that financial instruments issued under Law 12.431 may
“strip” the Brazilian taxable earning base to some extent (i.e., interest payments will lower the
taxable interest of the Brazilian corporation), but the tax authorities expect that the interest
payments that are deducted by the Brazilian issuer of the debt will be paid to entities located in
countries that will tax the interest payments at rates of at least 20%.
•
When interest payments are made to entities located in countries that do not apply a rate of at
least 20%, the benefits offered under Law 12.341 are reduced (i.e., the interest withholding tax
rate increases).
 Does the established Brazilian “tax blacklist” (2010) apply to define which countries
apply a tax rate of less than 20%? Would, for example, Swiss entities that invest in
instruments under Law 12.431 be subject to higher interest withholding tax rates?
•
Many investment funds that would normally invest in bonds under Law 12.431 are located in the
low-tax jurisdictions.
 Do investment funds located in low-tax jurisdictions have structuring options to avoid
losing the benefits offered under Law 12.431?
39
Investment Structures – Options
Intermediary Blocker Entities
Cayman
Fund
Cayman
Fund
99.9%
equity
100%
equity
100%
equity
Delaware
LLC
Delaware LLC
(2,689 Company)
Public
Securities
Investment
Delaware LP
(2,689 Company)
Investment
Brazilian
SPE
Public
Securities
Investment
0.1%
equity
Investment
Brazilian
SPE
40
BIOGRAPHY—RICHARD L. WINSTON
Richard L. Winston is a partner with the Miami Office of K&L Gates LLP where he practices in
the areas of corporate and international taxation. He represents a number of Global 500
corporations on various cross-border initiatives in Latin America and Europe. Mr. Winston is
ranked by Chambers Global, Chambers Latin America, Latin Business Chronicle, and many
other publications among the leading international tax lawyers (and corporate/M&A lawyers)
in the United States.
Mr. Winston earned his J.D. from the University of Virginia School of Law where he served as
an editor on both the Virginia Law Review and the Virginia Tax Review. He also has an LL.M.
in taxation from the New York University School of Law.
K&L Gates LLP is an international law firm with more than 1900 attorneys operating through
41 offices on four continents.
41
QUESTIONS OR COMMENTS?
•
THANK YOU!
Karyn Koiffman
[email protected]
Celso Costa
[email protected]
José Ribeiro do Prado Jr.
[email protected]
Fernando Tonanni
[email protected]
Silvia Rajsfeld Fiszman
[email protected]
Richard L. Winston
[email protected]
42

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