Holding Company for Intellectual Property, Copyright, Patents and Royalties

In many cases offshore companies can be very successful in exploiting the various international withholding tax rates for dividends, royalties and interest. For example, it is very common, for a nominal consideration, to transfer patent, copyright or trademarks in favour of an appropriate offshore/tax exempt company before significant appreciation.

It is possible for an offshore company to be assigned or purchase the rights to use and to sub-license patents, copyright and intellectual property. Consideration to the value of the asset at time of transfer should be given; an established patent would be more valuable than a patent at patent-pending stage so would cost the company more. Royalties may derive from a high-tax jurisdiction and may be subject to withholding tax at source. Such taxes may be reduced if paid to a company in a tax-free jurisdiction.

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30/09/2006
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