Business Model Optimisation (‘BMO’) is a process whereby value is created through business transformation. It is essentially a methodology which seeks to integrate both the operational and tax planning aspects of an organisation by identifying its various value drivers such as risks, functions and assets and by locating them in more efficient jurisdictions, both from an operational and a tax point of view. BMO can thus generate significant savings for an organisation, but for this benefit to be truly sustainable it is important that true substance is created in establishing an organisation’s presence in a new and more efficient location.
As already alluded to, a particular jurisdiction will generally be chosen by virtue of its ability to generate both operational and tax savings for an organisation. In practice, however, activities are often located in low tax jurisdictions with the aim of securing the latter benefit, and sometimes without justifying the existence of the former
