Vistra on track with Global Expansion
On 6th November 2006 Vistra was formally launched in Jersey. Today, just over one year later, Vistra is active in 10 jurisdictions and employs over 180 professionals. In our first Newsletter of 2008 we take a closer look at two of the latest additions to our network: the opening of our office in Istanbul and the acquisition of Monterey Group, which has offices in The Netherlands and Curaçao. This important transaction was completed on 12th December 2007, after receiving full approval from the Dutch Central Bank.
Vistra continues to innovate, creating specialist services that add real value for our clients and complement our full range of trust and corporate services. In the previous edition of our newsletter we highlighted the benefits of coming to the UK and the role Vistra’s Immigration Desk can play in helping clients make this important move. In this issue we continue the theme by examining the advantages of moving to Switzerland.
Combining innovation with a more traditional range of services is an integral part of Vistra Group’s strategy to lead the field as an independent trust and corporate services provider. As our network grows, so does Vistra’s expertise and ability to offer an extensive range of solutions. Importantly, this expansion has been accompanied by rapidly increasing brand awareness and in this Newsletter we give you an insight into how this has been achieved.
In the coming months, Vistra will embark on further expansion by upgrading our existing global presence. A top priority is to further develop our Cyprus office as well as to continue developing high value services for our clients. In doing so, we will always stay conscious of the fact that as a Group, we need to be large enough to provide the full range of cross border solutions but small enough to guarantee the personal and tailored service our clients deserve.
I wish you all the best for 2008.
Bart Deconinck
Group Chief Executive
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Monterey go ahead
Following the press release of 13th July 2007, Vistra is pleased to announce that the Dutch Central Bank, local regulatory authority, has recently given the final go ahead for the sale and share of 100% of the Monterey Group into the Vistra Group. The transaction was subsequently completed on 12th December 2007.
The Monterey Group is a Netherlands-based corporate and fiduciary services provider with offices in Breda and Curaçao. Originally formed by the merger of Monterey, a fiduciary business formerly owned by Fortis and the Rijnhove Group, a Dutch accounting and fiduciary business, Monterey is known for its professionalism and the expertise of its staff. Monterey is currently ranked 11th in the Dutch market and employs 37 people, of which 32 in the Netherlands and 5 in Curacao. The management of Monterey Group, consisting of Frans van Rijn, Sjaak ten Hove and Walter Hoogstraate will take on important roles within the newly combined group and Frans van Rijn will shortly join the Supervisory Board of Vistra.
Offering the full range of trust and corporate services, including the incorporation, management and administration of Dutch and Antillean companies, Monterey’s business activities are the perfect complement to Vistra’s. This acquisition reinforces Vistra’s ambition to become a leading independent provider of trust and corporate services and provides Vistra with a second office in The Netherlands and a perfect access and coverage for a complementary business feeder network, as well as a presence in the Caribbean.
Now that regulatory approval has been received, the focus will be on completing the work necessary to combine the companies, so that the clients of both will soon experience the benefits of belonging to a broader organisation. The immediate next step and the most visible one will be the rebranding of Monterey as Vistra, which will be unveiled on the 4th February 2008.
Vistra and Monterey clients can expect to benefit from the combination of talents and expertise now available to them across the group, as well as enjoy the advantages of being served by a truly independent global network.
For further informaiton please contact Sjaak ten Hove or call on +31 (0)76 560 9900.
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Building the brand
Vistra has developed a strong brand to support the group’s business activities and as the global network takes shape, it’s essential that the brand plays its part by promoting Vistra to target audiences throughout the world. To achieve this, we have begun an advertising campaign using Yann Arthus-Bertrand’s striking imagery, that’s designed to reach private clients and intermediaries as they travel the world.
Currently, Vistra is advertising in two European airports which have been chosen because of the high proportion of business executives using them. Hundreds of thousands of business passengers travel through Jersey and Luxembourg airports every year and our presence will reinforce Vistra on both local and international levels. Complementing the airport advertising, Vistra also has an advert in the VLM in-flight magazine, ’Velocity’. With business passengers making up over 80% of VLM’s customers and its flights serving major European business hubs, the airline is a natural choice for promoting Vistra.
It is important to take advantage of advertising opportunities where and when they arise, which is why Vistra recently advertised in the November edition of African Business Magazine, an influential publication that reaches business people across the continent. Importantly, this edition was also distributed at the US-Africa summit in Cape Town, reaching business people from both Africa and the USA.
Building a brand, however, is not just about good design and advertising, it is about communicating the company’s core values and this can be done in a variety of ways.
As a result of the two recent acquisitions of Benelux Trust and Monterey Group, Vistra grew up rapidly and the group employs today some 180 staff. It was a priority to gather our people from different backgrounds and build a knowledge platform to reinforce the cross servicing activities within the group. That’s what Vistra did in last November, inviting 50 Vistra relationship managers and members of the management team in Antwerp to explore and discuss all elements of the expanding company. The delegates also had the chance to take part in workshops led by specialists in subjects such as intercultural management or how to achieve enduring success in a fast changing and often hostile environment. The two-day meeting came to a close with an address by Vincent van Quickenborne, Belgian Secretary of State.
The successful launch of Vistra’s brand can primarily be seen in the success of Vistra itself, however, a recent nomination in the Jersey Chartered Institute of Marketing Awards for best use of brand confirmed the fact that our brand is strong and compelling and this within 18 months of having been launched.
Please contact either Alastair Scott or Yolanda Garcia for more information.
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Spotlight on... Swiss immigration
By Walter Stresemann and Jean-Marc Pasche
Of all the benefits that moving to Switzerland brings, one that appears very attractive is paying personal taxes based not upon what you earn, but on what you spend. There are around 3,200 tax refugees living in the country, among them Tina Turner, Johnny Hallyday, and Lewis Hamilton, and many of them use the system, described by the Swiss tax administration as lump-sum taxation. The regulations governing who is eligible for lump-sum taxation are stringent, and the laws restricting the acquisition of real estate by anyone who is not a Swiss national are similarly rigorous. For these reasons alone, anyone considering applying to move to Switzerland would be advised to seek the support of an expert in their application. Vistra S.A. is one of the few trust and corporate services providers able to offer both on-shore tax and Swiss immigration expertise, with services ranging from helping with tax and the search for a home, to health insurance and school registration.
Lump-sum taxation
The underlying principle for lump-sum taxation is that a foreign individual taking up residence in Switzerland may opt to pay his personal taxes on the basis of his expenditure in Switzerland, instead of being taxed on his income and wealth. To be eligible, the individual must be at least 55 years old (not applicable anymore for EU citizens), not a Swiss citizen, must not have been Swiss resident for the last ten years and commit itself not to engage in any lucrative activity in Switzerland. If the applicant is eligible, he or she has to provide the tax authorities with a budget setting out an exact picture of yearly expenses at that time. The income tax payable in on a lump-sum basis is negotiated with the tax authorities in the canton in which the person plans to live. Just how low might that lump-sum payment be? There is a fixed minimum amount on which the lump sum must be based. For example, in the case of home owners, it must be roughly at least five times the rent they would expect to generate from their property. In general, Swiss residents who are assessed on a lump-sum taxation basis are considered full tax residents under the tax treaties entered into by Switzerland, unless qualified or provided otherwise. Those residents can, therefore, take advantage of Switzerland’s tax treaty network regarding, for example, withholding taxes levied on dividends, interest and royalties received from abroad. There are also other taxes: Ordinary federal, cantonal and communal rates must be paid but, even with these taxes, the lump-sum taxation system can be an attractive for many people. Someone assessed on the lump-sum taxation basis is not taxed on his or her foreign income and wealth, and there is no obligation to report them in the Swiss tax return. This means that it is therefore possible for individuals whose income and assets are mainly foreign to exempt much of it, as lump-sum taxation, basically results in an exemption of foreign-sourced income from Swiss taxes. However, the income upon which the individual claims a partial or total exemption must be reported, and it is taken into account in the so-called ’comparative calculation’. The ’comparative calculation’ is done to ensure that the amount of Swiss taxes paid on the lump-sum basis exceed the income and net wealth taxes computed on the Swiss-sourced items, plus income on which the taxpayer claims an exemption from foreign taxes, at the ordinary tax rate. If the taxes to be paid on the lump-sum basis are lower than the income and net wealth taxes of these items, the Swiss tax liability will be the taxes due on these items, and not the lump-sum basis.
Cantons
Once an individual has taken the decision to apply for a Swiss residence permit, they should then consider in which canton they would like to live. The tax rates and laws vary from canton to canton, and each has a fixed lower limit for lump-sum tax. Vistra regularly enters into direct negotiations with cantonal tax authorities to get payment down to the lowest level possible. The amounts do vary; we have found that a Valais resident, for example, may pay taxes computed on a minimum tax basis set up at CHF 120,000 in lump-sum tax, the minimum tax basis is around CHF 250’000 in Vaud while the tax authorities in Geneva will accept nothing less than CHF 450,000. There are other tax considerations to take into account. Inheritance tax regimes vary between cantons. In Valais there is no inheritance tax while Geneva’s tax authorities exempt inheritance tax in direct line for everyone except those people enjoying lump-sum taxation.
Real Estate
Since the 1980s, Swiss law has restricted the acquisition of real estate by ’persons abroad’. The term is applied to anyone either residing outside Switzerland, or living in the country who is neither citizen of a European Community country nor of a European Free Trade Association country nor the holder of a valid settlement permit. (Companies, and other legal entities, are considered ’persons abroad’ if they are incorporated outside Switzerland or persons abroad have significant influence over a Swiss company.) Swiss legislation covers not only the transfer of ownership of property or other real estate to a person abroad, but also any transaction that gives a non-Swiss resident control over property. Thus, acquisitions of building lease, rights of residence or usufructs rights could all be regarded as the acquisition of real estate under Swiss law.
Checklist
If you or a client is interested in moving to Switzerland, and being taxed on a lump-sum basis, they should first:
- Be a foreign national, i.e., non-Swiss.
- Not have been resident in Switzerland for at least ten years.
- Not engage in any gainful activity in Switzerland.
To make use of lump-sum taxation more effective, that person should have income and assets which are mainly non-Swiss and should structure non-Swiss wealth before taking up residence, in particular if the person wishes to gift/bequeath assets to persons outside his or her immediate family. Vistra is able to assist with all this, and can help the individual settle into life in Switzerland.
You can click to email Walter Stresemann or Jean Marc-Pasche or call them on +41 (0)22 319 1890.
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Spotlight on... Our Istanbul office
Vistra presence in Istanbul
Vistra has recently opened a representative office in Istanbul, Turkey, bringing the number of jurisdictions in which Vistra has a presence, to ten.
Onur Kizilot, Vistra’s Istanbul representative, will be aiming to attract the large number of wealthy Turkish individuals who are looking for wealth protection and business structuring expertise, to the Vistra network.
Turkey was chosen as the next step in Vistra’s network expansion not only because it has a growing number of wealthy private clients but because the country as a whole is experiencing an impressive economic growth. Importantly, Turkey has a stable economy and strong links with Middle Eastern markets.
These strong traditional and business links with Arabic countries are an important factor in Vistra choosing Turkey, as a presence in Istanbul will provide a clear access route to both emerging and established markets in the Middle East.
Vistra’s legal and tax professionals understand the importance of providing solutions that are Sharia compliant and will work with our clients to ensure that all their needs are met when creating structures for them or their businesses.
The Istanbul representative office provides an exciting opportunity for Vistra to make an impact in both Turkey and the Middle East. If you would like to learn more about the work Vistra can do in the region, Onur Kizilot, will be delighted to answer any questions that you may have. He can be contacted by email or by calling him on +90 (0)212 252 82 35.
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DISCLAIMER
The contents of this document are made available for information purposes only. Nothing within this document should be relied upon as constituting legal or other professional advice. Neither Vistra Holdings Limited nor any of its companies, subsidiaries or affiliates accept any responsibility whatsoever for any loss occasioned
to any person no matter howsoever caused or arising as a result, or in consequence, of action taken or refrained from in reliance on any of the contents of this document.
Vistra (Jersey) Limited is Regulated by the Jersey Financial Services Commission and registered under the Financial Services (Jersey Law 1998 to carry out trust company business.