Designing a complex equity structure to optimize global tax burden is one of the common strategies used by many multinational companies. This strategy requires thoughtful planning to ensure that it is carried out within the framework of legal compliance. The following are some common methods and considerations: 1. **Choose the right place of registration and tax jurisdiction:** - **Tax Havens:** For example, the Cayman Islands, Bermuda, Singapore, etc., these places generally provide low tax rates, tax incentives and business-friendly regulatory environments. - **Double Taxation Agreements (DTA):** Choosing a country that has a double taxation agreement with the main operating country can avoid double taxation in both countries. 2. **Establishing a Holding Company:** - Establishing a holding company in a tax-favored country to hold equity in other subsidiaries. This allows internal capital allocation in the form of dividends, interest, royalties, etc., to optimize the overall tax burden. 3. **Intellectual Property (IP) Structure:** - Transfer the company's intellectual property (patents, trademarks, copyrights, etc.) to a subsidiary or holding company in a low-tax country. This allows companies to transfer profits to these low-tax areas through royalties, thereby reducing the overall tax burden. 4. **Transfer Pricing:** - Profits are reasonably distributed by setting transaction prices for goods, services or intellectual property between different countries. This needs to comply with the tax laws of various countries to avoid being identified as tax evasion. 5. **Combination of debt financing and equity financing:** - Profits are transferred between different countries by setting up subsidiaries in high-tax countries and providing loans to parent companies or affiliated companies in low-tax countries. This requires attention to the pre-tax deduction regulations for interest expenses. 6. **Make good use of tax incentives:** - For example, R&D Tax Credits, Investment Allowances, etc., make full use of tax incentives in various places in business operations. 7. **Optimize the internal structure of multinational companies:** - Optimize the distribution of tax burdens by establishing a multi-level internal structure such as regional headquarters, branches, and independent subsidiaries. **Important considerations:** - **Legal and compliance:** All tax planning must comply with the tax laws and regulations of relevant countries and regions to avoid illegal acts such as tax evasion and tax avoidance. - **Anti-Avoidance Rules:** Many countries have anti-avoidance provisions, such as the GILTI (Global Intangible Low-Taxed Income) tax system in the United States and the BEPS (Base Erosion and Profit Shifting) project of the OECD. It is necessary to ensure that the structure design does not violate these regulations. - **Transparency and reporting requirements:** With the improvement of global tax transparency, enterprises need to comply with various information disclosure and reporting obligations, such as CRS (Common Reporting Standard) and CBCR (Base Erosion and Profit Shifting Report of Multinational Enterprises). - **Legal and market risks:** Complex equity structures may face legal challenges, reputation risks and the impact of market changes, and a comprehensive risk assessment is required. **Recommendations:** Designing and implementing complex equity structures to optimize tax burdens is a highly specialized task that requires consideration of the specific circumstances, business needs and legal environment of the enterprise. It is recommended that enterprises make such plans in the following ways: - **Consult professional tax advisors and legal experts:** Ensure the legality and effectiveness of the structure design. - **Comprehensive assessment of risks and benefits:** Consider the short-term and long-term impacts of tax optimization, including legal risks, reputation risks, etc. - **Continuous monitoring and adjustment of structure:** As laws, regulations and market environment change, the equity structure is adjusted in a timely manner to maintain compliance and optimize results. Through careful planning and professional guidance, companies can minimize their global tax burden within a legal and compliant framework, thereby improving overall competitiveness and financial benefits.