NEWSLETTER

EDITION 8, DECEMBER 2008

Vistra capitalises on opportunities expansion of service offering Vistra is pleased to present you with the latest edition of our newsletter. Over the last year we have experienced a fundamental shift in the financial and geo-economic structure of the world. The economic downturn has provided a sharp reminder that, contrary to popular belief, boomand-bust has not been abolished. The business cycle is back and the reality of a deep recession is now being recognised by all. The credit crunch and the subsequent de-leveraging have deflated asset prices and lowered profit expectations to levels not seen for years. At Vistra we believe that the current economic climate can provide interesting opportunities and new points of view when structuring our client’s affairs. Diligence and robust governance have now become key; for private individuals, asset protection, rather than growth of assets, is again the main objective, whilst for corporations, tax effectiveness is back as an important driver of bottom-line sustainability. Because of this and despite the downturn, Vistra has aggressively been expanding its Global service offering in recent months. Indeed, combining constant innovation and Personal dedication with a more traditional range of services is an integral part of the Vistra strategy, to lead the field as an Independent trust and corporate services provider.

In this newsletter we start with having a closer look at Vistra Fund Services, followed by an article on our recent addition to our geographical network: Dubai. Furthermore, we introduce you to an important extension to our private client service offering - our new Family Office Team. In addition, we analyse the possibilities of the Dutch Antilles Private Foundation as a vehicle for estate planning and asset preservation. Finally, we put the spotlight on the Unregulated Funds Regime in Jersey as a tool for investors who wish to swiftly establish funds which are not restricted by regulatory constraints. I wish you all a Merry Christmas and all the best for the exciting year to come.

Bart Deconinck Group Chief Executive

In this edition • Vistra Fund Services continues to grow • Vistra joins forces with Global Operations in Dubai • Vistra launches bespoke Family Office offering • Spotlight on... The Dutch Antilles Private Foundation • Spotlight on... The Jersey Unregulated Funds Regime

© Vistra Group Management SA / December 2008 / 1 of 7 This document must be read in conjunction with our Legal and Regulatory notice at http://www.vistra.com/notices

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Vistra Fund Services continues to grow Due to an increasing demand from both existing and potential clients for bespoke and high quality fund administration, Vistra has officially launched a new team rendering these type of services. The team, based in our Luxembourg and Jersey offices, is specialised in structuring and administrating alternative investment funds such as hedge funds, private equity and distressed land and property funds. In order to deliver a professional and a high quality service, Vistra invested in the fully integrated technical platform of Advent Software. With both Advent Geneva and Advent Partner, Vistra has opted for the most agile and powerful system in the market preferred by many of the largest alternative investment managers and fund administrators. Advent helps us to bridge the diverse requirements of the funds we service in order to support growth and scalability whilst delivering first class client satisfaction. For more information please contact Carola Breusch in Jersey or Frank Walenta in Luxembourg.

Vistra joins forces with Global Operations in Dubai Vistra has joined forces with Global Operations based in the UAE to offer a range of solutions to the increasing number of corporations and ultra high net worth individuals in the Middle East. Global Operations, under the leadership of Paul Farah, is a team of seasoned professionals with significant experience in the MENA region. The team recently managed the expansion of a well known major Investment Banking and Asset Management Group into Dubai, Qatar, Bahrain, and Saudi Arabia. Vistra has already been active in the region for some time. The long-lasting relationships and experience of Global Operations combined with Vistra’s expertise in trust and corporate services is expected to lead to a rapid expansion of Vistra’s client base in the region.

Vistra launches bespoke Family Office offering Vistra has just launched a Family Office offering headed by James Michel and supported by George Demetriou. James explains a little more about the concept and the type of client that would benefit from the service. Q: What is a Family Office? A: The Family Office concept is not new - it has been around well over 100 years. It started when families began to have such extensive and diverse business and personal interests that they were unable to manage them themselves, and so set up their own administrative offices. The concept has developed since then: whilst some large families have their own bricks and mortar offices and their own staff, many families today recognise that central administration would be beneficial, but don’t feel that their own physical Family Office would be warranted. It is that kind of multi-family service that Vistra is offering, where assets are administered and specialist expertise can be drawn on whenever required, either from within the Vistra Group or though our extensive network of intermediaries and experts. Q: What kind of specialist expertise are you referring to? A: There are the obvious areas such as tax, accounting and investment management, but there are many others. Client families often have a yacht or aircraft, and need experienced, specialist marine and aviation management where such matters as crew salaries and servicing schedules can be administered. Art collections often feature highly on the list of assets, often demanding specialist advice on valuation, storage or renovation. One area where we are seeing increasing interest is in philanthropic activities when family members require help in supporting charities or causes most effectively.

For more information please contact Jamil Massis or Peter Rice.

© Vistra Group Management SA / December 2008 / 2 of 7 This document must be read in conjunction with our Legal and Regulatory notice at http://www.vistra.com/notices

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Vistra launches bespoke Family Office offering (continued) Q: What type of family would benefit from a Family Office? A: I think that there are a lot of families who have a need for a Family Office but don’t realise that they do. Families generally come to decide that they need a Family Office in one of three ways: 1) the assets of the family become so diverse and extensive that they require professional management; 2) the sale of the family business realises significant liquid assets, and guidance is required in the management of those assets; or 3)

there is an issue of succession management to be resolved where time and talents are better spent elsewhere, coupled with an increasing demand for leisure time.

When the family wants to organise the management of assets for future generations, but individuals within the family have differing objectives and views, family governance becomes important. Laying down rules for how different generations make decisions together, the policy they follow for investing, and how they realise the benefits of their investments, are issues that fall under one umbrella within a Family Office. Sometimes an independent person from outside the family is in a better position to help them through difficult decisions. Q: Why has Vistra established a Family Office? A: The Family Office has effectively come about as an extension of Vistra’s private client service offering. Several clients have expressed an interest in a more personal and consolidated service, and Vistra has responded. Families are increasingly looking for specialised expertise at a reasonable price and under one roof, they require a number of different services but don’t want different service providers.

Q: How does the Family Office work at Vistra? A: Ours is a bespoke service, and everything can be tailored to suit the needs of the family. There is one point of contact within the Family Office, and that person understands the requirements and expectations of all family members. However, Vistra has over 200 professionals in 11 offices across 10 jurisdictions, and the Family Office is able to rely on the wider group to provide specialist expertise as required. Although we are a global organisation, the service is personal, professional and bespoke. Q: James, you joined Vistra on 1 December. What has your background been? A: I went to Victoria College in Jersey and then studied accounting and finance at University in Bristol where I then joined Coopers & Lybrand to qualify as a Chartered Accountant. In 1993 I moved to Bermuda, where I spent three years working in the captive insurance industry before returning to Jersey. That is when I started working with private clients in the trust and company industry, most recently as an associate director before joining Vistra.

In the last 12 years I have worked with several large families managing a variety of assets with a combined value of more than a billion US dollars. In all cases I have found that I have become part of an extended family, being entrusted to provide reliable advice and assist in sensible decision making.



I will closely work and be supported by George Demetriou, to service the daily needs of our clients. George is a senior trust officer. After completing a law degree he joined Simmons & Simmons as a paralegal and qualified as a Solicitor in 2006. He recently moved to Jersey and joined the Family Office team to be able to work much closer with these clients. George says: “Having worked in the City for several years, I understand what a ‘Rolls Royce’ service entails and look forward to being a part of it.”

© Vistra Group Management SA / December 2008 / 3 of 7 This document must be read in conjunction with our Legal and Regulatory notice at http://www.vistra.com/notices

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Vistra launches bespoke Family Office offering (continued) Q: James, do you think that the current economic climate will affect family offices? A: Despite the latest credit crisis, the world is becoming increasingly wealthy and, as it does, clients will increasingly need the services of family offices. Regulations and tax are only going to become more complex, and it is essential to have professional managers available to assist with increasingly complex business situations. The fact that we are going through troubled financial times can perhaps be seen as an opportunity for families to focus or refocus on their financial affairs. There are always investment opportunities around, and people will always take advantage of them. For more information please contact James Michel or George Demetriou.

Spotlight on... The Dutch Antilles Private Foundation The Dutch Antilles are a melting pot of cultures, and as such are quite good at transforming civil law concepts into a Caribbean mix which brings together Western European processes with other legal systems in the Anglo-Saxon world. One good example is combining the concept of the Dutch foundation with the Anglo-Saxon trust and forming a ‘Foundation Private Fund’. A Dutch Antilles Private Foundation (SPF) is formed by way of the execution of a Deed in the presence of a civil-law notary, followed by registration with the Commercial Registry. The SPF is a legal entity without members or shareholders and it only has a board of management, consisting of one or more members, who can be individuals and/or entities. The Deed of formation contains the name of the founder, of the SPF, its purpose, who and to whom distributions will be made and the way in which the board is appointed and dismissed. In the past, foundations could only have a charitable, social and/or cultural object. Legislation adopted and introduced in late 1998 eliminated those restrictions, making it a suitable alternative for a Trust or a Liechtenstein Stiftung. The SPF can accept assets/ property, manage it and distribute the original capital or the proceeds to the beneficiaries, without being subject to gift/inheritance tax or corporate income tax. Being a legal entity, the SPF has assets of its own. Neither the founder, nor the beneficiaries, or any of the board members have any personal liability for acts performed in the name of the SPF or for the debts or claims against the SPF. It acquires its assets by way of a transfer of full legal ownership from the founder or person/entity who will endow assets to the SPF. This can be done at the time of forming the SPF or at a later stage.

© Vistra Group Management SA / December 2008 / 4 of 7 This document must be read in conjunction with our Legal and Regulatory notice at http://www.vistra.com/notices

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Spotlight on... The Dutch Antilles Private Foundation (continued) Also, other individuals or entities can endow assets on the SPF, subject to board approval. The flexibility in the legislation makes it possible to have a SPF formed without mentioning in the Deed of formation, the name of the person who will endow the assets, or of the beneficiaries. The board manages the affairs of the Foundation. The first member(s) are appointed at the time of the formation. The Articles, which are contained in the Deed of formation will have provisions on how the members are appointed and dismissed; should the founder wish to reserve that right, the articles must explicitly say so. The members of the board do not have any propriety interest in the assets of the SPF, as they are completely separate from the assets of the board members. The articles of the SPF may provide for the possibility to appoint a supervisory board, either directly from the formation or to become effective at a time to be stipulated in the articles. The supervisory board has the task of controlling and supervising the activities of the board of management. Members of the supervisory board will in most cases be representatives of the founder, the beneficiaries and an independent expert. There are certain similarities between a protector of a Trust and the supervisory board. The object clause indicates the purpose of the SPF; that is to make distributions to the beneficiaries out of the original capital and the proceeds thereof. The beneficiaries are appointed by the foundation, subject to the provisions as contained in the articles. Specific provisions can prevail, for example, the prior approval of the supervisory board or the founder when he is still alive. As long as there are no beneficiaries appointed, nobody can claim a distribution out of the assets of the SPF. This specific element makes a SPF a very useful entity for deferral of income tax and for asset protection.

The SPF can be formed for a limited period of time, or indefinitely. The duration has to be mentioned in the articles and can be made subject to certain conditions or events. As stated above, the SPF is generally exempt from taxes. This implies that a transfer out of the SPF is not subject to Dutch Antilles gift or inheritance tax and that the profits are not taxable under the provisions of the Dutch Antilles. Also a distribution is tax exempt. This tax exempt status only applies in a situation where Antilles residents are involved. The SPF is required to file a profit tax return once in five years to confirm its passive (non–entrepreneurial) status. The tax exemption lapses when the SPF starts commercial business activities; asset/portfolio management and (fiduciary) holding of shares, is not considered to be “conducting a business”. The costs of forming are quite reasonable and the fixed yearly administration costs amount to USD 1.850. The advantages of a SPF can be summarised as follows: • • • • •

full legal entity a simple concept tax exempt easy to manage, including change of board members low costs

for the purpose of: • preservation and protection of assets • estate and tax planning. For further information or to discover how the SPF could benefit you, please feel free to contact Frans M.J. van Rijn in the Vistra Breda office or Ronald M Cristina in the Vistra Curaçao office.

© Vistra Group Management SA / December 2008 / 5 of 7 This document must be read in conjunction with our Legal and Regulatory notice at http://www.vistra.com/notices

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Spotlight on... The Jersey Unregulated Funds Regime The recently introduced Unregulated Funds Regime is the latest of a suite of fund products in Jersey designed to appeal to first time alternative investment fund managers, sophisticated investors or family offices who wish to swiftly establish funds, which are not restricted by regulatory constraints. Vistra Fund Services has, in the short period since the introduction of the new regime, established various unregulated funds covering private equity and alternative investments such as distressed land. We believe that this new fund structure will, over time, develop into a serious competitor to the much used Cayman fund providing an equally flexible fund solution in the European time zone. Jersey Unregulated Funds do not have to • • • •

diversify their investments adhere to minimum capitalisation requirements have all functionaries in Jersey appoint a Jersey based auditor.

Apart from an initial registration of the fund entity as an unregulated fund there is no regulatory approval required or ongoing licence fee payable.

Other classes include companies, partnerships, trusts or associations of persons • •

which have assets available for investments of not less than US$ 10 million or whose ordinary business is the provision of asset management or financial services

Unregulated Eligible closed ended.

Funds

can

be

open

or

Unregulated Exchange Traded Funds are closed ended funds which are listed or have applied to be listed on a recognised stock market or exchange. The list of approved stock markets includes amongst others Euronext, the London Stock Exchange, the Channel Islands Stock Exchange, the Alternative Investment Market (AIM), the Luxembourg Bourse and the New York Stock Exchange. All unregulated funds have to include a prescribed investment warning to investors in their application or subscription documentation. Unregulated Funds can be established in matter of days and offered immediately after establishment to investors. For more information please contact Carola Breusch.

Unregulated Funds can be established as Unregulated Eligible Investor or Unregulated Exchange Traded Fund and can take the legal form of an investment company (private or public), limited partnership, unit trust or protected cell company. Eligible Investors are defined in the law and may fall into one of eleven different classes, the simplest being • •

any individual who can invest a minimum of US$ 1 million into the fund or individuals who may invest less but where an investment manger has certified in writing that the investment is suitable for this particular investor.

© Vistra Group Management SA / December 2008 / 6 of 7 This document must be read in conjunction with our Legal and Regulatory notice at http://www.vistra.com/notices

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Locations JERSEY / Channel Islands

LONDON / United Kingdom Vistra (UK) Ltd Tel 44 (0)20 7268 2430 Contact David Rudge [email protected]

CURAÇAO / Caribbean Vistra (Curaçao) NV Tel (599 9) 736 6044 Contact Ronald Cristina [email protected]

GENEVA / Switzerland

Vistra SA Tel 41 (0)22 319 18 90 Contact Walter Stresemann [email protected]

LUXEMBOURG Vistra (Luxembourg) S.à r.l Tel (352) 42 22 29 Contact Bart Zech [email protected]

ISTANBUL / Turkey Tel 90 (0)212 252 82 35 Contact Onur Kizilot [email protected]

BREDA / Netherlands Vistra (Netherlands) BV Tel 31 (0)76 560 9900 Contact Sjaak ten Hove sjaak.ten.hove­­@vistra.com

AMSTERDAM / Netherlands Vistra BV Tel 31 (0)20 570 8100 Contact Tako van Ginkel [email protected]

AUCKLAND / New Zealand Vistra Trust Company (NZ) Limited Tel 44 (0)20 7268 2430 Contact David Rudge [email protected]

LIMASSOL / Cyprus Vistra (Cyprus) Limited Tel 357 25 817411 Contact Arjan Schaapman [email protected]

ANTWERP / Belgium Vistra (Belgium) BvbA Tel 31 (0)76 560 9900 Contact Frans van Rijn [email protected]

Vistra (Jersey) Limited Tel 44 (0)1534 504 700 Contact Dennis Lavin [email protected]

The contents of this document are made available for information purposes only. Nothing within this document should be relied upon as constituting legal or other professional advice. Neither Vistra Holdings Limited nor any of its companies, subsidiaries or affiliates accept any responsibility whatsoever for any loss occasioned to any person no matter howsoever caused or arising as a result, or in consequence, of action taken or refrained from in reliance on any of the contents of this document. © Vistra Group Management SA / December 2008 / 7 of 7 This document must be read in conjunction with our Legal and Regulatory notice at http://www.vistra.com/notices

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