Substance Services

Substance: the new watchword

The current debate on the morality of international tax structures is a game changer. Authorities worldwide require real management roles in (holding) companies instead of puppet roles. Failing to comply with these requirements may lead to substantial financial and reputational damage. ‘Substance’ – the real and actual presence – is more important than ever before.

Locus: a new solution for a new issue

Locus helps Dutch intermediate companies to tackle this issue without further delay. We offer all traditional corporate services and have seamless cooperation with tax advisors and/or the in-house tax department. We believe business needs more sustainable solutions and offer you the best with a non-traditional approach. We are convinced that a link to a trust company should be avoided as much as possible and that the level of substance of your Dutch entity can be greatly increased and at the same time savings be made. We will be more than happy to elaborate on the characteristics of our unique approach in a personal encounter.

Changing morale

“If it’s legal, it’s moral.” This is an old mantra which is no longer viable in the current business world. Politicians and media around the world are effectively challenging tax structures where there is inadequate substance or perceived misuse. One of the backgrounds is the current downturn that has caused policy makers in various countries to question tax planning by multinational company groups from a mere “morality” perspective, considering the negative consequences for their government budgets.

At various levels, legislation has been developed to allow tax authorities to more effectively challenge tax structures which are perceived as artificial.
Reports from the OECD signal that the use of treaties will be challenged by local authorities more regularly.

Prepared for future change

Traditionally, tax services typically have a hindsight view. However, in the light of the changing attitude towards international structures, companies should also assess whether their international structure is future-proof. Company investment structures will no doubt be subject to increasing scrutiny and non-compliance may result in serious damage. The substance offerings by traditional trust companies are in general insufficient and easily debunked by tax authorities.

Locus: a fresh approach in a traditional sector

TRADITIONAL TRUST COMPANIES

Domiciliation at the trust company’s address
Many other entities also registered at this address
The Dutch director often is a legal entity with many proxy holders
TTC’s representatives are engaged in many different directorships
Bookkeeping is done by the trust company at high hourly rates
Bookkeeping is done by trust officers with limited experience
Representatives from the TTC often change

LOCUS

Domiciliation at a different address than Locus
Considerable less entities are registered at the address
Directors are in all cases individuals
Directors are engaged in a limited number of directorships only
A true accountancy firm is engaged at competitive fees
Bookkeeping/accounting is done by an experienced accountant
Guaranteed long term engagements with director(s) involved