Fanny Evans-es

La Importancia de contar con un Programa de Cumplimiento de Protección de Datos

Fanny Evans, Asociada Senior, Morgan & Morgan

En el año 2013, Virginia Ginni Rometty, CEO de IBM, dijo: “Me gustaría que piensen en los grandes datos como el próximo recurso natural que es para nuestra era lo que el vapor, la electricidad y el petróleo fueron para la Era Industrial“.

Es probable que hayan leído o escuchado: ¡Los datos son el nuevo petróleo! ¡Los datos son el nuevo tocino! ¡Los datos son la nueva moneda! Estas analogías se han vuelto muy populares porque hoy día los datos son considerados uno de los productos más importantes.

Existen muchas Redes Sociales exitosas porque aunque no son plataformas de pago han convertido los datos en una fuente de valor.

La necesidad de un programa de cumplimiento de protección de datos en los negocios es cada vez más importante después de varias filtraciones de alto perfil de los datos de las empresas. Algunas de las mayores violaciones de datos en los últimos dos años incluyen a T-Mobile, Marriot, British Airways, Quora, Google, Orbitz y Capital One Bank en los Estados Unidos. Una violación de datos exitosa puede ocurrir en menos de un minuto, sin embargo, las empresas pueden tardar semanas para darse cuenta que se ha producido una violación.

Al dar los primeros pasos en aguas complejas como lo es la protección de datos, es común que las empresas se pierdan en la avalancha de requisitos legales o en el desarrollo de ese producto o servicio que podría resultar atractivo para sus clientes. Sin embargo, para una empresa, cambiar el enfoque a temas que puedan considerar más interesantes, nunca debe ser una opción porque los resultados de las violaciones de datos múltiples tipos de daños: desde reputación hasta financiero. A veces, puede incluso afectar a todo un país como sucedió en mi opinión, de manera errónea e injustificada, con los llamados “Papeles de Panamá”.

En la Unión Europea, la protección de datos es un derecho fundamental y el Reglamento General de Protección de Datos (GDPR), que entró en vigor en el 2018, es el marco para la protección de ese derecho. Otros países europeos se enfocan en el GDPR a medida que desarrollan o implementan sus propias leyes para proteger los datos. En Latinoamérica, la situación es diferente. Al no existir una regulación común, cada país ha abordado este reto de una manera distinta. Uno de ellos es Panamá que une esfuerzos para alinearse con los países de la región al promulgar la Ley 81 de 2019 que empezará a regir en dos años. La nueva ley impedirá que los datos personales suministrados en diferentes plataformas sean transferidos a terceros sin la autorización del propietario.

Observando los pasos firmes que han dado muchos países, queda claro que, incluso si las empresas tienen un enfoque de “no me va a pasar a mí” en cuanto a las violaciones de datos, en muchos países, la legislación les está obligando a repensar su razonamiento.

A continuación, cinco pasos que pueden servir como guía al redactar o revisar su programa de cumplimiento de protección de datos:

  1. Comprenda sus riesgos y obligaciones legales y éticas.

Uno de los elementos más importantes al crear un programa de cumplimiento de protección de datos es considerar sus riesgos y lo que es más importante y obligatorio para el negocio, en lugar de saltar a los requisitos de una legislación sin comprender completamente sus necesidades porque no todos los riesgos u obligaciones son gestionados de la misma forma o en la misma medida.

  1. Documente y revise sus políticas.

Su programa de cumplimiento de protección de datos debe estar debidamente documentado. No es suficiente saber que usted cumple con la privacidad de datos. Debe ser claramente verificable y fácilmente accesible a través de documentación precisa para exámenes internos o externos.

  1. Asigne la propiedad.

Las responsabilidades y tareas relacionadas con la confidencialidad y la protección de datos pueden solaparse con otras políticas empresariales, como la seguridad de la tecnología de la información, el mantenimiento de registros, los riesgos y la auditoría, recursos humanos, gestión de la información confidencial y otros, ya que requiere diversas habilidades para tener éxito.

  1. Proporcione capacitación y los recursos necesarios.

Siempre entrene a su personal. Si tiene un equipo informado, reducirá su riesgo.

La formación del personal no solo reduce el riesgo de infracciones, sino que también demuestra el cumplimiento ante investigaciones internas y externas. Por ejemplo, si una organización experimentara una violación de datos y hubiera documentado la capacitación de su personal sobre protección de datos, esto se usaría como evidencia para demostrar que habían tomado las medidas adecuadas para evitar una violación de datos y que se estaban tomando la legislación en serio, si hubiere.

  1. Revise las directrices del Grupo de Acción Financiera (GAFI) sobre el enfoque basado en el riesgo.

Para ayudar tanto a las autoridades del sector público como del privado a aplicar un enfoque basado en el riesgo, la GAFI ha adoptado una serie de orientaciones en cooperación con los sectores pertinentes. Las empresas deberán revisar las directrices aplicables a su industria para asegurarse que se adoptan las medidas.

Los datos son uno de los activos más importantes que tiene una empresa. Solo por esa razón, el programa de cumplimiento de protección de datos debe ser una prioridad para cualquier negocio.

Leer más
No Comments

The Bahamas: Economic Substance Legislation

The Bahamas: Economic Substance Legislation

Fanny Evans, associate at Morgan & Morgan

The Bahamas has passed legislation requiring that certain legal entities carrying on relevant activities have to demonstrate adequate economic substance in said jurisdiction. The beneficial owners of any company or limited partnership incorporated, registered or continued in The Bahamas should be aware of this legislation and consider how they may be affected.

The Commercial Entities (Substance Requirements) Act, 2018 (“CESRA”) came into force on December 31st, 2018. It addresses the concerns of the European Union’s (“EU”) Inter-governmental Code of Conduct Group (Business Taxation) guidance for determining substance when considering whether a tax measure is harmful or ‘fair’ and the Organization for Economic Cooperation and Development’s (OECD) Base Erosion Profit Shifting (BEPS) Project.

What is the effect?

CESRA imposes economic substance requirements on all legal entities carrying on “relevant activities”.

The relevant activities are:

1)     banking business
2)     insurance business
3)     fund management business
4)     finance and leasing business
5)     headquarters business
6)     shipping business
7)     distribution and service centre business
8)     intellectual property business
9)     any holding company engaged or where one or more of its subsidiaries is engaged in one of the activities listed above (1) to (8).

A company engaged in a relevant activity is, henceforth, called an “included entity”. 

How can an included entity demonstrate substantial economic presence?

It must carry on core income generating activities (CIGA) in The Bahamas and the entity must be directed and managed within The Bahamas.

Firstly, it is the primary responsibility of an included entity to demonstrate that it conducts CIGA in The Bahamas proportionate to its business activities. This can be proven by having, for example, the following:

  • an adequate amount of annual operating expenditure;
  • an adequate level of qualified full-time employees;
  • an adequate number of physical offices.

An included entity is prohibited from outsourcing any of its core income generating activities to an entity or person outside of The Bahamas; but it may outsource such activities to a service provider within The Bahamas. The included entity shall be able to demonstrate adequate supervision of the outsourced activity.

Second, an included entity will be deemed to demonstrate management and control in The Bahamas if it satisfies the following criteria:

  • an adequate number of meetings of the board of directors are conducted in The Bahamas given the level of decision making required;
  • there is a quorum of the board of directors physically present within The Bahamas during the meetings of the board of directors;
  • strategic decisions of the included entity made at the meetings of the board of directors must be recorded in the minutes of the meetings;
  • all included entity records and minutes are be kept in The Bahamas; and
  • the board of directors, as a whole, has the necessary knowledge and expertise to discharge its duties.

Here we must highlight some of the permissions granted by CESRA with respect to the directors and the employees that may be positive for an included entity. One is that despite the fact that employees must be residents in The Bahamas, there is no residency requirement for board members, who only need to be physically in The Bahamas whenever a board meeting is required. No number of board meetings that must be held in The Bahamas is prescribed in CESRA. Also, CESRA is not prescriptive in stipulating which employees should attend the board meetings, this will be at the determination of the company. 

What is a non-included entity?

A non-included entity is one that is:

  • a tax resident in another jurisdiction and centrally managed outside of The Bahamas, even if it conducts a relevant activity;
  • not engaged in a relevant activity itself or by any of its subsidiaries;
  • owned by residents and centrally managed in The Bahamas, even if it conducts a relevant activity.

What are the obligations for a non-included entity?

Companies which do not carry on a relevant activity are not subject to the economic substance requirements but are subject to annual reporting obligations and will be required to register as such. An example is a holding company that is not an included entity. This passive holding company is not required to have substantial economic presence in The Bahamas but will have to comply with the annual reporting obligations.

How an entity claims to be tax resident in another jurisdiction?

As per the Guidelines, the tax residency test may be satisfied by the entity providing the following documents to the Ministry of Finance of The Bahamas:

  • tax identification number issued by a foreign jurisdiction;
  • tax resident certificate issued by a foreign jurisdiction;
  • official receipt or statement issued by a foreign tax authority;
  • certification by the entity that the majority of meetings of the Board of Directors or controlling persons took place in a foreign jurisdiction;
  • the ordinary residence of the majority of the Board of Directors or controlling persons.

This certification of foreign tax residence must be filed by the entity as part of its annual filing requirements. 

What are the penalties?

An administrative penalty of $150,000 for failing to comply with the requirements of CESRA with a possible further administrative penalty of $300,000 and in certain circumstances the entity concerned being struck off of the Registrar of Companies. 

What is next?

All companies will need to undertake an internal review to confirm whether they conduct a relevant activity. With our guidance, they can determine what measures, if any, they should take in order to achieve compliance. In most cases, we believe that compliance will not be a convoluted matter. 

What is the time period for compliance with CESRA?

Included entities incorporated prior to the 31st December, 2018 have six (6) months from January 1st, 2019 to comply. Newly incorporated entities must comply immediately. Whilst this may be an alarmingly short period of time, we believe this period can be extended or will not be enforced immediately as many questions regarding the legislation still abound.  

We will leave, in our opinion, the best news for the end because we assume that after having read the above, the most important question to answer is: 

Are these efforts being welcomed by the EU?

The EU has confirmed that The Bahamas has not been included on the EU’s updated list of non-cooperative jurisdictions for tax purposes (known as the EU blacklist), which was published on 12th March, 2019.

The Bahamas presented the necessary structural changes that were required; another milestone in its tax transparency regime that sends a message to the international business community that The Bahamas is open for legitimate business. The Bahamas is a premier International Financial Centre conducting business with reputable jurisdictions and financial markets. Because they have demonstrated it consistently, it is safe to say that The Bahamas will continue doing what it takes to remain as a well-regulated compliant and competitive jurisdiction.

Disclaimer

The information contained herein is not intended to be read, accepted or used and is not provided as legal or tax advice and should not be treated as a substitute for legal and tax consultations with a professional. It is merely a summary of the latest regulations in The Bahamas that, as well as in many other jurisdictions, are being modified regularly in agreement with the OECD and the EU.

Leer más
No Comments

BVI: Economic Substance Legislation

Fanny Evans, associate at Morgan & Morgan

The British Virgin Islands (BVI) has passed legislation requiring certain legal entities carrying on relevant activities to demonstrate adequate economic substance in the BVI. The owners of any company or limited partnership registered or incorporated in the BVI should be aware of this legislation and consider how they may be affected.

The Economic Substance (Companies and Limited Partnerships) Act, 2018 (the Act) came into force on January 1st, 2019. It addresses the concerns of the European Union (“EU”) Code of Conduct Group for Business Taxation and recent OECD guidance around the economic substance of entities in jurisdictions with low or zero corporation tax. The Act demonstrates the BVI’s continued commitment to international best practice including the BVI’s implementation of the OECD’s Base Erosion and Profit Shifting (BEPS) framework and related EU initiatives.

The Act follows closely the approach taken to address the same issue by the Crown Dependencies of the UK (Jersey, Guernsey and the Isle of Man) and the other UK Overseas Territories including the Cayman Islands and Bermuda.

What is the effect?

The Act imposes economic substance requirements on all legal entities carrying on “relevant activities” unless they can evidence that they are tax-resident elsewhere. Entities which do not carry on a relevant activity are not subject to the economic substance requirements but may be subject to certain reporting obligations.

The relevant activities are:

1)     banking business
2)     insurance business
3)     fund management business
4)     finance and leasing business
5)     headquarters business
6)     shipping business
7)     holding business
8)     intellectual property business
9)     distribution and service centre business

We look forward to further guidance by the government to assist in determining if a particular entity is carrying on a relevant activity or if exemptions may apply. 

What are the reporting obligations and who will have access to information?

The information will be provided to the BVI International Tax Authority (ITA) via the BOSS system. BVI and foreign registered companies and limited partnerships will be required to report certain information to their BVI registered agent for this information to be uploaded onto the Beneficial Ownership Secure Search System regime (BOSS) so that the BVI International Tax Authority (ITA) can have access to it.

The ITA may use the information to discharge its duty to supervise and enforce the economic substance requirements. Information may be disclosed by the ITA to relevant overseas authorities in certain cases, including where there is breach of the economic substance requirements or where the entity claims to be tax resident in an EU member state.

What are the penalties?

Penalties are imposed for failure to provide required information or providing false or misleading information and for operating a legal entity in breach of the economic substance requirements + which may include fines, imprisonment and/or strike-off. 

What is next?

The Regulations, Rules and formal Guidance Notes, will be issued within the following weeks. They will certainly provide further detail and a clearer picture so that all relevant entities will be able to undertake an internal review to determine what measures, if any, they should take in order to achieve compliance. We believe that, for many entities, the impact will be minimal and compliance will be straightforward.

We will leave, in our opinion, the best news for the end because we assume that after having read the above, the most important question to answer is: 

Are these efforts being welcomed by the EU?

The EU has confirmed that the British Virgin Islands and Cayman Islands have not been included on the EU’s updated list of non-cooperative jurisdictions for tax purposes (known as the EU blacklist), which was published on March 12th, 2019. The EU’s decision confirms that both jurisdictions have implemented good tax governance principles which address the EU’s earlier concerns on the economic substance of certain entities in low or no tax jurisdictions.

BVI has overcome many pressures from various international organizations. This ability to respond demonstrates that is a highly regulated and stable jurisdiction willing to protect the wide array of services it offers. With the Economic Substance legislation BVI remarks its commitment to continue being the leading financial center.

Leer más
No Comments

BVI Private Trust Companies

By Fanny Evans, Executive Director and General Manager of MMG Trust (BVI) Corp. 

Since the introduction of the Private Trust Company (PTC) in the BVI, this vehicle has become attractive to act as the Trustee, Protector or Administrator of a trust without the need to apply for an exemption or to apply for a trust license under the BVI Banks and Trust Companies Act.

In order to be qualified as a PTC, there are certain key requirements to comply with:

  • The PTC must be a fully compliant BVI BC.
  • The ending of the company must be “Private Trust Company” or “PTC”.
  • The Memorandum of Association must state that it is PTC.
  • Must have a Class I license holder as a Registered Agent, which Morgan & Morgan (MM) has.
  • Must be engaged in “unremunerated trust business” to act as Trustee, Protector or Administrator of a trust, or for a group of trusts which are related (for example, “a family trust”).

“Unremunerated trust business” means that no payment is received in respect of services that would constitute trust business. Payment in respect of costs and expenses incurred by the PTC is not regarded as remuneration.

A single PTC may act as Trustee for several trusts as long as it qualifies as being part of a related group of trusts through persons who are connected by family relationships. Because one of the qualifying requirements of a PTC is that where multiple trusts are concerned, the trusts need to be related, it is therefore imperative that the Beneficiaries and the Settlor are identified within the Trust Deed in such a way as to make the determination of the relationships possible.

 

Is it possible to convert a IBC to a PTC?

Yes. IBC’s will be required to disapply the Transitional Provisions of the BC Act as a first step towards converting to a PTC.  Where the IBC acted as Trustee under the previous exemptions, the resolutions authorizing the conversion to BC must also contain relevant information stating that the Company was appointed Trustee pursuant to the details of the relevant Trust Deed.

Is it possible to convert a BC to a PTC?

Yes. A BVI Business Company may convert to a PTC by filing a PTC Memorandum of Association. The resolution authorizing the conversion must also state the details of any Trust for which the PTC is to act. Any subsequent Trusts must also be authorized by the PTC by resolution.

We remain at your disposal for any further information you may need regarding this useful vehicle for wealth planning.By Fanny Evans, Executive Director and General Manager of MMG Trust (BVI) Corp. 

Since the introduction of the Private Trust Company (PTC) in the BVI, this vehicle has become attractive to act as the Trustee, Protector or Administrator of a trust without the need to apply for an exemption or to apply for a trust license under the BVI Banks and Trust Companies Act.

In order to be qualified as a PTC, there are certain key requirements to comply with:

  • The PTC must be a fully compliant BVI BC.
  • The ending of the company must be “Private Trust Company” or “PTC”.
  • The Memorandum of Association must state that it is PTC.
  • Must have a Class I license holder as a Registered Agent, which Morgan & Morgan (MM) has.
  • Must be engaged in “unremunerated trust business” to act as Trustee, Protector or Administrator of a trust, or for a group of trusts which are related (for example, “a family trust”).

“Unremunerated trust business” means that no payment is received in respect of services that would constitute trust business. Payment in respect of costs and expenses incurred by the PTC is not regarded as remuneration.

A single PTC may act as Trustee for several trusts as long as it qualifies as being part of a related group of trusts through persons who are connected by family relationships. Because one of the qualifying requirements of a PTC is that where multiple trusts are concerned, the trusts need to be related, it is therefore imperative that the Beneficiaries and the Settlor are identified within the Trust Deed in such a way as to make the determination of the relationships possible.

 

Is it possible to convert a IBC to a PTC?

Yes. IBC’s will be required to disapply the Transitional Provisions of the BC Act as a first step towards converting to a PTC.  Where the IBC acted as Trustee under the previous exemptions, the resolutions authorizing the conversion to BC must also contain relevant information stating that the Company was appointed Trustee pursuant to the details of the relevant Trust Deed.

Is it possible to convert a BC to a PTC?

Yes. A BVI Business Company may convert to a PTC by filing a PTC Memorandum of Association. The resolution authorizing the conversion must also state the details of any Trust for which the PTC is to act. Any subsequent Trusts must also be authorized by the PTC by resolution.

We remain at your disposal for any further information you may need regarding this useful vehicle for wealth planning.

Leer más
No Comments

BVI Private Trust Companies

By Fanny Evans, Executive Director and General Manager of MMG Trust (BVI) Corp. 

Since the introduction of the Private Trust Company (PTC) in the BVI, this vehicle has become attractive to act as the Trustee, Protector or Administrator of a trust without the need to apply for an exemption or to apply for a trust license under the BVI Banks and Trust Companies Act.

In order to be qualified as a PTC, there are certain key requirements to comply with:

  • The PTC must be a fully compliant BVI BC.
  • The ending of the company must be “Private Trust Company” or “PTC”.
  • The Memorandum of Association must state that it is PTC.
  • Must have a Class I license holder as a Registered Agent, which Morgan & Morgan (MM) has.
  • Must be engaged in “unremunerated trust business” to act as Trustee, Protector or Administrator of a trust, or for a group of trusts which are related (for example, “a family trust”).

“Unremunerated trust business” means that no payment is received in respect of services that would constitute trust business. Payment in respect of costs and expenses incurred by the PTC is not regarded as remuneration.

A single PTC may act as Trustee for several trusts as long as it qualifies as being part of a related group of trusts through persons who are connected by family relationships. Because one of the qualifying requirements of a PTC is that where multiple trusts are concerned, the trusts need to be related, it is therefore imperative that the Beneficiaries and the Settlor are identified within the Trust Deed in such a way as to make the determination of the relationships possible.

 

Is it possible to convert a IBC to a PTC?

Yes. IBC’s will be required to disapply the Transitional Provisions of the BC Act as a first step towards converting to a PTC.  Where the IBC acted as Trustee under the previous exemptions, the resolutions authorizing the conversion to BC must also contain relevant information stating that the Company was appointed Trustee pursuant to the details of the relevant Trust Deed.

Is it possible to convert a BC to a PTC?

Yes. A BVI Business Company may convert to a PTC by filing a PTC Memorandum of Association. The resolution authorizing the conversion must also state the details of any Trust for which the PTC is to act. Any subsequent Trusts must also be authorized by the PTC by resolution.

We remain at your disposal for any further information you may need regarding this useful vehicle for wealth planning.By Fanny Evans, Executive Director and General Manager of MMG Trust (BVI) Corp. 

Since the introduction of the Private Trust Company (PTC) in the BVI, this vehicle has become attractive to act as the Trustee, Protector or Administrator of a trust without the need to apply for an exemption or to apply for a trust license under the BVI Banks and Trust Companies Act.

In order to be qualified as a PTC, there are certain key requirements to comply with:

  • The PTC must be a fully compliant BVI BC.
  • The ending of the company must be “Private Trust Company” or “PTC”.
  • The Memorandum of Association must state that it is PTC.
  • Must have a Class I license holder as a Registered Agent, which Morgan & Morgan (MM) has.
  • Must be engaged in “unremunerated trust business” to act as Trustee, Protector or Administrator of a trust, or for a group of trusts which are related (for example, “a family trust”).

“Unremunerated trust business” means that no payment is received in respect of services that would constitute trust business. Payment in respect of costs and expenses incurred by the PTC is not regarded as remuneration.

A single PTC may act as Trustee for several trusts as long as it qualifies as being part of a related group of trusts through persons who are connected by family relationships. Because one of the qualifying requirements of a PTC is that where multiple trusts are concerned, the trusts need to be related, it is therefore imperative that the Beneficiaries and the Settlor are identified within the Trust Deed in such a way as to make the determination of the relationships possible.

 

Is it possible to convert a IBC to a PTC?

Yes. IBC’s will be required to disapply the Transitional Provisions of the BC Act as a first step towards converting to a PTC.  Where the IBC acted as Trustee under the previous exemptions, the resolutions authorizing the conversion to BC must also contain relevant information stating that the Company was appointed Trustee pursuant to the details of the relevant Trust Deed.

Is it possible to convert a BC to a PTC?

Yes. A BVI Business Company may convert to a PTC by filing a PTC Memorandum of Association. The resolution authorizing the conversion must also state the details of any Trust for which the PTC is to act. Any subsequent Trusts must also be authorized by the PTC by resolution.

We remain at your disposal for any further information you may need regarding this useful vehicle for wealth planning.

Leer más
No Comments