6th Australia New Caledonia Business Forum Brisbane 18 June 2010

Practical tips to set up your business in New Caledonia – with a local partner – with your own employees Choice of a structure – Non- incorporated – Incorporated

Protecting your assets overseas Managing the local team Managing shareholders relations

Industrial/Intellectual property – Key asset – Register trademarks/ logo/ patents/ designs/ domain names etc. over the territory – Ascertain which entity is the owner of the IP – Set up a licence contract with local entity

No compete clause –Local joint venture partner: In a shareholders’ agreement In a management agreement –Local staff: In employment contracts –Must be reasonable and limited as to area, duration and type of activity

Sale of goods or equipment – Dispute resolution clause: Avoid cost of international litigation Internal process / Mediation / Conciliation – Retention of title clause: Easier reclaim of unpaid goods or equipment Must be express Only applies to identifiable goods/equipment

Confidentiality clause No compete clause Reporting Scope and limits of authority – In employment contract – In constitution of local company Assumption of broadest authority with third parties Joint managers If exceeds authority: remedies

Key clauses – In shareholders’ agreement, constitution or in management agreement – Clauses: Duties, scope of authority Reporting Sale of shares, change of control No compete Confidentiality

Constitution Shareholders’ agreement Statutory regimeContractual Less flexibleVery flexible Easy to enforceMore difficult to enforce Damages / Injunction / Specific performance Damages Not confidentialConfidential Heavy process to amendEasy to amend or to join

Tax representative Representation desk Branch Company

Temporary or permanent Direct implantation on local market Direct control by head office Direct profit/loss Unlimited liability

Advantages – Cheap to set up / run – Local knowledge – Temporary or permanent – Confidence with clients and authorities – IP remains with Australian entity Disadvantages – Direct commercial and legal risk – Management of double taxation impact on local profits – No local partner other than as employee

Advantages – More permanent – More confidence with local clients and authorities – Local partner possible – liability limited to local market Disadvantages – More expensive to run – Statutory regime to comply with – More complex contractual set-up with mother company

No limitation on nationality of shareholders French particularities: – Share capital: Minimum amount, obligation to pay up at incorporation Contributions: cash / assets / labour – Cumulating directorship and employment contract – “Must be allowed to trade” – Company tax or shareholder taxation

SARLSASSA Full name Société à responsabilité limitée Société par actions simplifiée Société anonyme Equivalent in Australia Pty LtdSimplified LtdLtd Members Min.1 and max.100 Individuals Corporate entities Min. 1 Individuals Corporate entities Min. 7 Individuals Corporate entities Liability of members Limited Share capital requirement Min. $ 1 Min. $ 54,000 Contributions Cash Assets Labour Cash Assets Cash Assets For convenience, amounts are converted into Australian dollars

SARLSASSA Management One or more managers Director(s) incl. President Choice of management structure Board of directors Chairman of Board General Director (executive) Legal requirements Must be individuals Must be allowed to trade Individuals Corporate entities Min. 3, max. 18 directors Individuals (incl. Chairman and General Director) Corporate entities No employment contract Criteria in constitution Shareholder or not Authority to act for company Manager(s) President General directors (if provided in constitution) General Director Deputy General Directors (if any) Limits to authority In constitution By resolution of Board

SARLSASSA Prohibition Loan to managers Loan to shareholders (unless corporate entity) Loan to management Loan to shareholders (unless corporate entity) Loan to directors (unless corporate entity) Loan to shareholders (unless corporate entity) Interested party contracts By shareholders’ resolution Auditor Thresholds (2 out of 3): Assets ≥ $ 2,230,000 Net T/O ≥ $ 4,460,000 Staff ≥ 50 Thresholds (2 out of 3): Assets ≥ $ 1,440,000 Net T/O ≥ $ 2,880,000 Staff ≥ 20 Compulsory Annual filing of accounts and AGM Compulsory Taxation Company tax unless wholly-owned by individual Company tax unless applicable limited exemptions Company tax For convenience, amounts are converted into Australian dollars

SARLSASSA Constitution FlexibleTailoredMostly statutory Cost to set up and run Fairly inexpensive Expensive Restricted sale of shares Yes if in constitutionYes, if in constitutionNo Joint venture Closely-held Large number of shareholders Corporate governance Fairly protective depending on constitution Depends on constitution Protective

SNCSCA Full name Société en nom collectifSociété en commandite par action Equivalent in Australia Incorporated partnership Incorporated partnership limited by shares Members Min. 2 partners Individual Corporate entities Must be allowed to trade Min. 1 limited shareholder Min. 1 unlimited shareholder Individual Corporate entities Liability of members Joint and unlimited Limited shareholder: limited Unlimited shareholder: joint and unlimited Share capital requirement ≥ $ 1≥ $ 54,000 Contributions Cash Assets Labour Cash Assets Labour (for unlimited shareholders only) For convenience, amounts are converted into Australian dollars

SNCSCA Management One or more managers Supervisory board Legal requirements Individual Corporate entity If manager is a partner, must be allowed to trade Must be appointed in constitution Individual Corporate entity If manager is a shareholder, must be allowed to trade Must not be a limited shareholder Joint venture Very closely-held Silent investor: limited shareholder Active local partner: unlimited shareholder Auditor Thresholds (2 out of 3): Assets ≥ $ 2,230,000 Net T/O ≥ $ 4,460,000 Staff ≥ 50 Compulsory Tax Shareholder direct taxationHybrid taxation For convenience, amounts are converted into Australian dollars

SNCSCA Advantages Unanimous consent for: sale of shares revocation of managing partner Favourable taxation if activity expected to make loss Flexible constitution Liability proportional to responsibilities Hybrid taxation Good corporate governance depending on constitution Good for a silent investor Disadvantages Unlimited liability of partners Management deadlock Difficult to leave partnership Complex and expensive to manage Hybrid taxation complex to administer Unlimited liability for local partner

Different legal system: Forget your assumptions Reporting: Ensure good communication Assets and goodwill: Protect your business

Véronique Morgan-Smith Special Counsel Solicitor – NSW Avocat – France NAATI Translator Practice areas Commercial and Corporate Corporate Governance Mergers & Acquisitions Resources and Energy IT Sydney +61 (0) Julie Miehe Principal Solicitor - NSW & QLD Juriste – France Practice areas Commercial and Corporate Mergers & Acquisitions Corporate Governance Resources and Energy Tourism Brisbane +61 (0)