SINGAPORE UPDATE

THE ECONOMY AND THE BIRDS AND THE BEES
Having a headache, anxiety attack, not in the mood? No one could blame you for saying "No" during these difficult times. But it does have downstream effects. For the first time in five years, Singapore has had fewer babies. The number of births fell by 172 last year to 39,654, much to the consternation of Prime Minister Lee Hsien Loong.

He added that the reason is probably due to the economic downturn. Still, the drop marks a grave trend, he said "It may not be a lot less, but it is a lot less than it ought to be, in terms of total numbers." This would mean that the total fertility rate ("TFR") has gone down further, he added. "If unchecked, (it) will cause us to have not just a shrinking population, but an even more rapidly ageing population."

Singapore's TFR was last reported to be 1.29. To replace itself, a society needs a rate of at least 2.1. For Singapore, this means having about 60,000 babies a year.

Since 2004, the number of births has been on an uptrend. The best rise was in 2007 when the number shot up by more than 1,000 over 2006.

GLOBAL TAX FORUM IN SINGAPORE
Representatives from over 90 countries will be congregating in Singapore later this year for a tax summit.

The Global Forum on Transparency and Exchange of Information for Tax Purposes monitors and evaluates the international standard on how tax information is shared across borders. This year's forum will be from September 30 to October 1, and will review the preliminary outcomes of the peer review process and the progress made over the past year. This will be the Global Forum's first meeting after it became a stand-along body last year. Singapore was placed on the "white" list after agreeing to meet international compliance standards on sharing tax information.

Contributed by Lawrence Fong, Managing Director, GCSL Singapore
Lawrence's email address is lawrence@gcsl.info

INTERNATIONAL UPDATE

TAXPAYER WINS ONE SMALL ONE BACK
Over the past few newsletters Jack and I have passed comment on the UBS case (http://www.gcsl.info/newsletter/200909/).

Some 14,700 Americans turned themselves in during the tax amnesty ending October 2009. With most of these coming after the agreement as a result of the UBS case.

To refresh, Switzerland agreed back in August 2009 to pass information to the USA of some 4,500 accountholders suspected of tax evasion.

However one UBS account holder hasn't taken the agreement lying down and has fought back with implications for others in a similar position.

In the latest ruling the failure solely to complete certain tax forms or declare income doesn't equate to tax fraud which is required in order for Switzerland to disclose the data to the USA.

The taxpayer at issue, like an estimated 255 other taxpayers failed to file a W-9 form which is used to declare income from foreign bank accounts.

The majority of taxpayers it is alleged acted in situations of "continued serious tax offences" and do not qualify to use this ruling.

However it once again throws the spotlight on the legality of what Switzerland agreed to under the clear duress of a bloated, anti-sovereign acting Uncle Sam.

Contributed by Cathy Odgers, Group Legal Counsel and Compliance Officer, The GCSL Group of Companies Limited
Cathy's email address is cathy@gcsl.info.

UK ATTACKS UNDISCLOSED OFFSHORE BANK ACCOUNTS
HM Revenue & Customs ("HMRC"), upon the passing of the non-disclosure opportunity, recently announced any undisclosed bank accounts could result in greater penalties for the taxpayer. HMRC seems to believe any offshore non-compliance is equivalent to tax evasion. The following penalties will likely apply:

• 20% of the un-paid tax where there is an unprompted disclosure
• 35% where there is a prompted disclosure
• 70% where there is no disclosure
• up to 100% where the non-compliance was not disclosed and has been concealed

Contributed by Kitty Lee, Client Services Manager, GCSL Hong Kong
Kitty's email address is kitty.lee@gcsl.info

AMENDMENTS IN LATVIAN TAX LAWS
As part of the international crisis response announced in December 2008 to stabilize Latvia's economy, various organizations have committed millions of Euros in loans to the whole EUR 7.5 billion package, which includes contributions from the World Bank, International Monetary Fund, European Union and the Nordic countries.

To ensure compliance with the actual expenditure of the budget revenue and expenses, fiscal discipline and strict security measures applied. There are regular follow up with the actual revenues to meet the planned budget and if necessary the decision will be taken to make appropriate amendments to national budget. We now face logical result of it: year 2010 has begun with substantial amendments in Latvian Law - it will affect both corporate and individuals.

Personal Income Tax (PIT)

• Starting from 2010, the PIT is increased to 26% from previous 23%.
• Until 1 January 2010, the Latvian residents were among the few private investors who could enjoy a relatively favorable tax conditions for return on capital and capital gains. From now on, income from the capital will be subject to 10% tax; and capital gain tax will be subject to 15% tax.

Corporate Income Tax (CIT)

• Starting from 2010, only 40% of representation expenses can be written off as justifiable expenses for the purposes of CIT. Thus instead of the former 40% the taxable income has to be increased by 60%.
• Losses can be carried forward for eight years (five years before 1 January 2010) in the order in which they were incurred.

Value Added Tax (VAT)

• From 1 January 2010, VAT is increased from 21% to 23%.
  A number of goods and services were previously included in the lower rate, such as hotel accommodation, books, funeral services, and entry to sporting events, but these are now charged at the standard rate. From 1st January 2010, lower rate at 10% only applies to medical equipment and pharmaceutical products, passenger transportation, heating and electricity.
• From 1 January 2010, the law introduces a new procedure by which VAT paid in another EU country by a Latvian taxpayer can be recovered electronically.

Real Estate Tax (RET)

• There were numerous discussions in Latvian Saeima to implement Real Estate Tax, as it will strongly hit low and middle class. High-worth estate also will be taxed, but payable tax is proportionally small to estate's value. The following tax rates apply:
• 0.1% for the estate's cadastral value, which does not exceed LVL 40 000 (approx. EUR 56 915)
• 0.2% for the estate's cadastral value from LVL 40 000 (approx. EUR 56 915) to LVL 75 000 (approx. EUR 106 715)
• 0.3% for the estate's cadastral value exceeding LVL 75 000 (approx. EUR 106 715)
• Additional 1.5% (previously 1%) Tax of the cadastral value is applied on land and buildings for commercial activity.

Contributed by Patrick Trainor, Managing Director, GCSL Hong Kong
Pat's email is Patrick.trainor@gcsl.info

Labuan Holding Companies HQ in Kuala Lumpur
This new flexibility will make it attractive for multinationals to enhance operating efficiencies by relocating their corporate headquarters to take advantage of Kuala Lumpur's competitive offerings of first-grade facilities and infrastructure in a low-cost operating environment with better quality human capital and professional services.

The Labuan Holding Companies will primarily deal with non-residents, deal in non-Malaysian Ringgit
business and pay tax under the rules of the Malaysian Income Tax Act (1967). The flexibility is granted byboth Labuan Offshore Financial Services Authority ("LOFSA") and the Companies Commission of
Malaysia.

The general criteria of Labuan Holding Companies that choose to locate in Kuala Lumpur include the
following-

1. The applicant-

• Is or will be, a company incorporated under the Offshore Companies Act 1990; or
• Is a company incorporated in other jurisdictions and to be redomiciled to Labuan and incorporated under the Offshore Companies Act 1990.

2. Approval needs to be obtained from LOFSA prior to the establishment of the office.

3. The Labuan Holding Companies cannot use the same name as of domestic company incorporated
under the Companies Act 1965.

4. The Labuan Holding Companies will be allowed to carry on one or a combination of the following
activities from its office in Kuala Lumpur:-

• Holding of investment in securities, stocks, shares, loans, deposits or immovable properties.
• Providing management services including administrative, human resource, accounting and
  backroom support services to:-
  i. Related companies within Malaysia; or
  ii. Related or non-related companies outside Malaysia.
• Managing surplus funds and providing credit facilities to related companies within the group in and outside Malaysia.
• Trading or re-invoicing activities outside Malaysia.

5. All business must be in non-Ringgit.

6. The office must be independent of any other entity and employ its own personnel with independent
books and records.

7. The Labuan Holding Companies must have sufficient paid-up or working capital to support their
operations and activities in Kuala Lumpur.

8. The Labuan Holding Companies must make an irrevocable election to be taxed under the Income Tax Act 1967 pursuant to section 3A of Labuan Offshore Business Activity Tax Act 1990. Hence, the Labuan Holding Companies
are required to-

• Comply with the provisions of the Income Tax Act 1967;
• Submit annual audited accounts to LOFSA; and
• Conduct Annual General Meeting in Malaysia.

9. The Labuan Holding Companies must comply with other requirements of the relevant laws in Malaysia in regard to the operation of the office in Kuala Lumpur, whichever applicable.

Contributed by Ooi Hoay Beng, Business Development Director - Asia, The GCSL Group of Companies Limited
Ooi's email address is ooi@gcsl.info

OFFSHORE UPDATE

Anguilla: Changing of the guard - Streete departs, Astaphan takes charge
The Anguilla Financial Services Commission said goodbye last month to Mr. Niguel Streete as Director and welcomed on board Mrs. Eleanor Astaphan. Below is an article given to the local newspaper, The Anguillian, announcing the changes and allowing Mr. Streete a chance to say some parting words.

http://www.anguillian.com/article/view/7717/1/140/

Mrs. Eleanor Astaphan graduated Summa Cum Laude from Sacred Heart University, USA with a Masters Degree in Finance and Banking . Prior to joining the Anguilla Financial Services Commission she headed the Financial Services Supervision and Regulation Department in Dominica. Her prior experience includes postings in the Ministry of Finance and Planning as Acting Budget Controller and Assistant Secretary with responsibility for Monetary and Banking Affairs. She has also served in the capacity of Director of Finance and Administration for a private manufacturing operation.

Contributed by Carlyle Rogers, Managing Director, GCSL Anguilla
Carlyle's email address is carlyle@gcsl.info

BELIZE: ASSET PROTECTION IN 1799!?
I will take this time to be on the lighter side of asset protection. Belize has had the benefit of being part of the "offshore world" for the past two decades, and has enjoyed success quietly, as a jurisdiction.

Many, however, do not know that from as far back as when Belize was not an official colony of the United Kingdom, but a mere settlement of ragtag Englishmen and Yankee deserters, along with Free Blacks and slaves, that asset protection was already being practised. As an aside, many also do not know that Belize was the only location in the English-speaking Caribbean whose laws stipulated that a black man was presumed free unless and until evidence to the contrary could be produced.

The story is told of one Reverend W. Stanford, clergyman of the Anglican Church who, prior to being stationed in Belize, had been on the Mosquito Shore and Jamaica. In Jamaica, he had befriended a woman by the name of Mrs. Ritchy. Rumor has it that he was doing more than attending to her spiritual needs, but whatever the extent of their association, she had entrusted to him slaves for his intended work at the Mosquito Shore. He in turn had obligated himself, in a crude Promissory Note of sorts, to repayment of the equivalent value in Jamaican currency.

The long and short of it was that he never did repay her what she had expected under the arrangement, but had skipped out on her when the British settlers of the Mosquito Shore in Nicaragua had to escape the occupation by the Spanish Navy, and ran to Belize with a number of the stragglers from "the Shore". However, it was to come back to haunt him, and in 1799, the good Reverend, with the aid of another kind lady (hmmm, would this be a trend?) by the name of Ann Home, who was reportedly not homely at all in looks, secured what he now viewed as his assets in an asset protection arrangement. Madam Home purchased from the good Reverend, for the "princely" sum of five shillings, in 1799, his home and slaves, and other personal items, in Belize, thereby legally making them hers, but still allowing him to reside therein and benefit therefrom. Mrs. Ritchy was thus unable to recoup her losses, although she admittedly did ruin his ability to continue to minister to the congregation within the Belize Town settlement.

Asset Protection at its most basic. Belize was involved from early, it seems.

The above was discovered after I read a most intriguing novel, part fiction, part fact, written by the late Emory King, a former Floridian who ship-wrecked in Belize in 1953 and never left, apparently. He wrote one of his novels entitled "1798 - The Road to Glory", embellishing on the facts leading up to and surrounding the Battle at St. George's Caye. I encourage you all to read it if you can, although it is now probably out of print; I had to borrow a copy from a friend.

Lastly, I wish to thank you all who had nothing but good wishes for me and my family as we celebrated the birth of our son, Kurt David Antonio Mason, on January 13, 2010. As it is a year of great promise for him and us, I hope it will equally be a year of great promise for you, and that you would consider GCSL Belize as being able to assist you in your endeavours.

Contributed by Carlo Mason, Managing Director, GCSL Belize
Carlo's email address is carlo@gcsl.info

Cook Islands Offshore Industry Well-Represented at Heckerling
Over 2500 trusts and estates attorneys attended the 44th Annual Heckerling Institute on Estate Planning held by the University of Miami School of Law. Amongst those in attendance were Jenner Davis, CEO of the Cook Islands Financial Services Development Authority, Puai Wichman, Managing Director of GCSL Cook Islands and another Cook Islands' trust company. While there are a small number of international attendees, the group from the Cook Islands certainly traveled the farthest.

Davis, who has attended the conference nine of the last ten years, says it is the largest legal conference in the United States and the premier gathering for trusts and estates attorneys. "US attorneys who work with the Cook Islands offshore industry are spread all over the country. Heckerling allows you to see many of those attorneys in one place making it an efficient way for the industry to see clients." Heckerling is known for its high caliber of speakers and quality of materials.

GCSL was one of seven platinum sponsors for this year's conference. No other offshore trust companies are in attendance and the Institute has a rigorous process for allowing companies to come in as exhibitors. "It took some convincing years ago with the organisers that the attendees wanted to hear from offshore trust companies," Davis says. "It's great to see the Cook Islands so well-represented. I'm here promoting the jurisdiction as a whole. The best part about this week has been seeing Puai and the other Cook Islands representative team up with each other and with me to promote the Cook Islands. They are competitors but both recognise it is in the interest of all of the Cook Islands trust companies that they work together as a team." Davis hopes that next year more of the trust companies will attend, increasing the Cook Islands profile even more.

Contributed by Puai Wichman, Managing Director, GCSL Cook Islands
Puai's email address is puai@gcsl.info

SAMOA: SERVICE IN THE YEAR OF THE TIGER
Happy Chinese New Year to all of you from us in Samoa! May it be a successful year for all!

As 2010 is well on the way, provided here is a brief list of our services on offer not just a reminder but for those looking for a Trustee Company you can trust! You only need to contact us directly by email (samoa@gcsl.info) for a fee quote. Here is what you can expect from us here in Samoa and GCSL as a Group.

• Incorporations (inclusive of Certificate of Incorporation - in English only or dual English/Chinese, Memorandum and Articles of Association, Appointment of First Director, Transfer of Shares, Share Certificates & Registers);
• Certificate of Good Standing;
• Certificate of Incumbency;
• Company Search;
• Amendments to and Filing of Memorandum and Articles of Association;
• Increase / decrease of Authorized Share Capital;
• Change of Company Name;
• Notarization / apostille / Legalization/authentication of documents with PRC, ROC, and Vietnamese Embassies;
• Bank account opening with online banking service in Hong Kong.

We are also able to register redomicile companies, i.e. those registered in certain jurisdictions other than Samoa. The advantage of redomiciles rests in the Registrar's fees of USD100 in lieu of USD300 for annual registration.

For those looking to set us LLC's, we have a special price on offer.

For more details on any of these offers, please email me directly (laura@gcsl.info) or (samoa@gcsl.info).

Contributed by Laura Fepuleai, Manager, GCSL Samoa
Laura's email address is laura@gcsl.info

TIDBITS

OUR MONTHLY QUOTE THAT MADE US SMILE
"When life boxes you into a corner....box back!" A life lesson from a tough fella

OUR KIND OF BOOKSTORE
We recently read about a bookstore down under that has created a combined wine bar/reading room featuring a range of Australian wines and cheeses. Coffee and tea ain't bad, but fine wine and cheese...yeah, baby, that's our kind of bookstore!!!

SPITTING YOUR WAY TO EVICTION
We were very impressed with the decision to evict repeated spitting offenders living in government-sponsored housing. Other naughty offenses leading to eviction include littering, making too much noise and gambling. The argument against imposing this penalty on the poor is it discriminates as wealthy people are not being subject to the same in their fancy private housing. Be serious...anything to stop people spitting up at will has to be a good thing!!!

NOW THAT'S A SPEEDING TICKET!
We recently read about the Swiss millionaire who was racing through a village at 100 km per hour in his Ferrari Testarossa, was caught and nailed with a record fine of CHF299,000 (US$273,000). Switzerland obviously is different than China as the poor get nailed for spitting while the wealthy get nailed for speeding. We wonder what would be the penalty if one was speeding and spitting at the same time in either China or Switzerland? A fake Swiss watch

WE LIKE THIS BED-WARMING SERVICE
The Holiday Inn impresses again by offering a trial human bed-warming service where a willing staff-member at three hotels will dress in an all-in-one fleece sleeper suit before slipping between the sheets. Yeah, baby, we like this bed-warming service, but the article begged the question - may we choose the gender, height, weight, etc, of the service provider!?