1. Welcome! The British-Portuguese Chamber of Commerce The Swedish-Portuguese Chamber of Commerce Pierre B. Boulle Managing Director 21st June 2005 Presentation Farol Design Hotel, Av. Rei Humberto II de Itália, 7 2750-461 - Cascais - Portugal, Gibral tar

2. Regulated by the FSC, Regulated by the FSC, Counterpart of the FSA Counterpart of the FSA www.fsc.gi Investor Compensation Scheme Investor Compensation Scheme Member Member www.gics.gi www.gics.giwww.gics.gi £1 Million £1 Million Professional Liability Insurance Professional Liability Insurance investorseurope Ltd Gibral tar ● One of the Pillars of Hercules ● One of the Pillars of Hercules ● Monte Hacho, Ceuta, the other ● Monte Hacho, Ceuta, the other ●Gibraltar, Offshore Portal ● Gibraltar, Offshore Portal

3. COUNCIL DIRECTIVE 2003/48/EC EU COUNCIL DIRECTIVE 2003/48/EC Taxation of savings income (interest payments) Gibraltar Gibraltar law - 21st July 2004 Compliance: individual Governments No Federal Policing Authority in Europe … yet! applicable if ’paying agent’ resident in EUapplicable if ’paying agent’ resident in EU ‘Interest payment’ as defined in Article 6‘Interest payment’ as defined in Article 6 Is tax free trading from an offshore possible after July 2005?

4. Taxation (Savings income) Ordinance 2004: Paying Agent: ‘Any economic operator who pays interest to or secures the payment of interest for the immediate benefit of a beneficial owner’ Any entity established in a Member State to which interest is paid or for which interest is secured for the benefit of a beneficial owner. Competent Authority/Exchange of Information : Paying agents would provide the competent authority in their jurisdiction with the information required to be provided by the legislation. The competent authority would thereafter transmit the information to the competent authority of the Member State of residence of the beneficial owner (within six months following the end of the tax year in which the payment was made.) Interest payments : Interest on debt claims Interest accrued or capitalised at the sale, refund or redemption of debt claims; Interest-derived income arising from bond/mixed funds: Income realised on the sale, refund or redemption of units or shares in bond/mixed funds Identity and residence of beneficial owner: Where a paying agent makes an interest payment to an individual whom he believes to be a beneficial owner, the paying agent shall establish the identity and residence of the beneficial owner. Information reporting by the paying agent to the competent authority : The identity and residence of the beneficial owner The name and address of the paying agent The account number of the beneficial owner or identification of the debt claim Information concerning the interest payment Where does Gibraltar stand in all this?

5. No, not at all.No, not at all. Directive only applies to individuals, not to companies.Directive only applies to individuals, not to companies. Why only individuals?Why only individuals? And anyway there is a transitional period…And anyway there is a transitional period… Is this the end of Financial Markets as we know them!? Gibral tar

6. Transitional Period: till 31st December 2010: -Domestic & International Bonds and ‘other’ negotiable debt instruments -issued or their prospectus approved by ‘competent’ authorities before 1 March 2001 -issued by ‘responsible’ authorities in third countries provided no further issues of such negotiable debt securities on or after 1st March 2002 Article 15 of Directive: Negotiable Debt Securities Gibral tar

7. Offshore trading will continue, but only till 2010 for debt interest products Other financial products not included ThinThin end of the wedge. Interest now, capital gains on stocks next? This is clearly a dummy run… Success in policing of Directive…will determine how fast Eurocrats & EU Tax Authorities push forward into other areas. So what’s all the Fuss about? Life goes on… Gibral tar

8. –Upping the Ante, greater cost for ‘ordinary’ citizens wishing to mitigate tax. –Wealthier investors - nil effect –Herding Effect : ignorance and fear is driving more investors to buying offshore structures, unnecessarily. –More business for well run offshores; even more business for more opaque offshores –Offshore role : greater legitimacy –Trading Accounts : no more interest paid. Cheaper for investors than paying for an offshore to avoid any possible repercussions… What collateral damage can we expect as a result? Gibral tar

9. What do Offshore Brokers do now? Nothing much, for the moment. Life goes on, just as before, with a few adjustments … –Greater specialisation in tax/ trading issues fundamental. –Convergence: offshore Financial institutions, lawyers and Company Managers – Long Term –Turnkey approach to offshore trading: Offshore Company Offshore Trading Platform Offshore settlement Gibral tar

10. Technology and Reinvention TECHNOLOGY: Key battleground of the future. –Traceless online trading has come of age –All the technological apparel for remote offshore trading exists & has come of age and is almost impossible to track, for the moment… REINVENTION/ RETOOLING: –You can’t keep a good product down: instruments of debt - you can bet your bottom Euro that new products will pop out of the woodwork within weeks of the Directive coming into force. Gibral tar

11. investorseurope, 944 Europort Gibraltar T +350 40303 F +350 51795 info@investorseurope.com Gibral tar ● ● an Offshore Portal leading to a New World...of Trading Technology through your partner,