A Key Location for Russian Structured Finance Deals

INTRODUCTION

In recent years Ireland has emerged as a key jurisdiction for the establishment of special purpose vehicles (SPVs) for a variety of Russian structured finance transactions.

Why Ireland – Key Reasons

We have set out below the key reasons for selecting Ireland as a location for establishing an SPV for Russian deals.

• Taxation - Favourable tax laws allow the structures to be tax neutral. While the SPV itself is liable to corporation tax at 25%, the tax is applied on the SPV's taxable profits, which is generally maintained at a nominal level as there is no minimum profit required for tax purposes. This is achieved by having the SPV's tax deductible expenditure essentially equal to its income, typically through the use of profit participating loans/notes. A combination of Irish domestic provisions together with an advantageous treaty with Russia permits the SPV to get a deduction for the interest payments at the SPV level while at the same time