nishith desai associates © legal and tax counseling worldwide 5 th ifa conference on international...
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Nishith Desai Associates ©Legal and Tax Counseling Worldwide
5th IFA Conference on International Taxation & Transfer Pricing, Ahemadabad
GLOBAL BUSINESS MODELSGLOBAL BUSINESS MODELS
International Tax Challenges & OpportunitiesInternational Tax Challenges & Opportunities
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What is a “Business Model”?What is a “Business Model”?
What is a “Business Model”?
“A business model is a conceptual tool that contains a big set of elements and their relationships and allows expressing the business logic of a specific firm. It is a description of the value a company offers to one or several segments of customers and of the architecture of the firm and its network of partners for creating, marketing, and delivering this value and relationship capital, to generate profitable and sustainable revenue streams.”
— Osterwalder, Pigneur and Tucci (2005)
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WHAT IS A BUSINESS MODEL?WHAT IS A BUSINESS MODEL?
• The subscription business model• The razor and blades business model
(bait and hook) • The pyramid scheme business model• The multi-level marketing business
model• The network effects business model • The monopolistic business model • The cutting out the middleman
model • The auction business model• The online auction business model• The bricks and clicks business model
• The loyalty business models • The Collective business models• The industrialization of services
business model• The servitization of products
business model • The low-cost carrier business model• The online content business model • The freemium business model• The premium business model• The direct sales model• The professional open-source model• Various distribution business
models
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Types Of Business ModelsTypes Of Business Models
• The eComTaxpert Report studied 28 business models relating to the E-Commerce industry
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Types Of Business ModelsTypes Of Business Models
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
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E-COMMERCE BUSINESS MODELSE-COMMERCE BUSINESS MODELS
Globalization is sourcing from where a product is cheapest and selling where it is dearest
But taxation can distort this equation
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Global Business & Tax IssuesGlobal Business & Tax Issues
International Tax Issues
Harmonization of different legal and tax systems; and
Creating the most tax efficient structure
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Global Business & Tax IssuesGlobal Business & Tax Issues
LawTax
Strategy
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Global business & Tax IssuesGlobal business & Tax Issues
LawTax
Strategy
Public International
Law
Public International
Law
Legal System of Intermediate Country
Private International
Law
Legal System of Investor CountryLegal System of Investor Country
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Global Business & Tax IssuesGlobal Business & Tax Issues
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Strategy CircleStrategy Circle
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Investment StructureOutbound - Equity
Investment StructureOutbound - Equity
Host Country
HoldCo2 HoldCo1
Holding Company
India Company
Corporate Laws
Tax
ExchangeControls
Direct investment
Investment through Holding Company
Investment through 2-Tier Holding Structure
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Investment StructureOutbound InstrumentInvestment StructureOutbound Instrument
Host Country India
Equity
Debt
Hybrid Instruments
Corporate Laws
Tax
ExchangeControls
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Where & How To Hold Intellectual Property?
Where & How To Hold Intellectual Property?
Indian Pharmaceutical
Company
Intellectual Property
Investing in USA-Whether LLC or Inc.?
Investing in USA-Whether LLC or Inc.?
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India US LLC
Business
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Investing in USA-Whether LLC or Inc.?
Investing in USA-Whether LLC or Inc.?
IndiaUS Inc.
US LLC.
Local US Investors
Can a foreign company merge into and Indian company?
Does foreign law permit corporate migration?
What are the implications?
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Cross-Border M&ACross-Border M&A
oDomestic Taxation is an ObligationoForeign Taxation is a Cost
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CHALLENGES AND OPPORTUNITIESCHALLENGES AND OPPORTUNITIES
If not planned right, taxation by multiple jurisdictions may magnify this cost manifold However, if planned right, these costs can disappear!
CURRENT CHALLENGES:– The Theory of Nexus & Extra-Territorial
Intervention– Transfer of Intellectual Property– OECD Model Guidelines in light of
advent of Technology
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International Tax ChallengesInternational Tax Challenges
CASES:– Ishikawajima-Harima Heavy Industries Ltd.– Hyundai Heavy Industries Co. Ltd.– Morgan Stanley– SET Satellite
SUB-JUDICE CONTROVERSIES: – Genpact– Vodafone
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International Tax controversiesInternational Tax controversies
FRACTURING A TRANSACTION NUMBER OF STRUCTURING POSSIBILITIES:
– Holding Companies for Investments & Capital Gains
– Jurisdictions to hold IP for License & Royalty– System Arbitrage– Hybrid Instruments– Hybrid Entities– Migration of Companies– Triangular Situations
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International Tax OpportunitiesInternational Tax Opportunities
International Tax Challenges & Opportunities
International Tax Challenges & Opportunities
Double (or Multiple) Taxation v. Double Non-Taxation Tax Avoidance v. Tax Evasion Tax Havens v. Tax Havens Tax Treaty Situations v. Non-Treaty Situations Physical Commerce v. E- Commerce Pure Breed Instruments v. Hybrid Instruments Pure Breed Entities v. Hybrid Entities Mutual Agreement Procedure v. Arbitration Residents v. Non-Residents Branch v. Subsidiary Capital Gains v. Business Income Transfer of Tangibles v. Transfer of Intangibles Triangular Situations v. Treaty Shopping Permanent Establishment v. Permanent Establishment ……………. And the list
could go on….
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Thank [email protected]
Thank [email protected]
Nishith Desai AssociatesLegal and Tax Counselling Worldwide
Mumbai93 B, Mittal Court, Nariman Point,Mumbai 400 021,IndiaPh : 91 22 6669 5000Fax: 91 22 6669 5001
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