Our client was a major hotel chain that manages hotels throughout the world under a variety of brand names, and was contemplating a project in Bangladesh. RPSL was asked to assist with:
- Tax structuring and deal execution, including proposals for alternative structures to optimize tax strategy.
- Advice and support on the foreign exchange regime in Bangladesh,
- Advice on corporate matters and investment rules in Bangladesh
- Business intelligence for the client.
RPSL work ultimately included
- Advising on the relationship with the third party Owner who would ultimately own the underlying property and Hotel
- Key agreements to cover licensing and royalties,international services, management and technical services to be provided by the client,
- Alternative arrangements to separate in-country and out-of-country technical services.
- Advice and structuring assistance for one or more subordinated loans to the Owner, and contributions to the project as investments or equity, known as “key money” in the industry.
The proposed agreements covered a range of jurisdictions, which encompassed both treaty partners and non treaty countries. RPSL was able to advise on alternative structures including third jurisdictions not covered by the structure proposed by the client, suggest an implementation strategy, and a forward plan to mitigate the impact of high withholding tax rates. Further, RPSL was able to draw on its broader expertise an advise on work permit rules, corporate compliance and BOI regulations in relation to the investment, as well as suggest a forward strategy based on recently decided court cases in India, which have persuasive value in Bangladesh.