United States: Entering The U.S. Without Entering Its Tax System: Holding Company Structures For U.S. Operations

Reproduced with permission from Daily Tax Report, 191 DTR J-1, 10/2/15. Copyright 2015 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com

Foreign companies entering the U.S. market for the first time will want to consider how their operations can be structured to minimize U.S. taxes. Although sales into the U.S. can be arranged in some cases to keep profits offshore, a sufficient presence ''on the ground'' can pull sales income (and possibly other income) into the U.S. tax system.

This article discusses how business profits of a foreign corporation generally are taxed in the U.S. and suggests possible holding company structures that a foreign parent corporation can use to help insulate itself from direct U.S. tax exposure while taking advantage of treaty exemptions to reduce federal income taxes.1

Federal Income Taxation of Business Profits: General Rules in the Absence of a Treaty

Foreign corporations are taxed under Section 882(a) of the Internal Revenue Code of 1986, as amended, at graduated rates topping out at 35 percent on ''taxable income which is effectively connected with the conduct of a trade or business in the United States'' (hereinafter, ''effectively connected income''). A flat 30 percent tax applies under I.R.C. Section 881(a) to certain types of passive income, including interest, dividends, royalties, rents and annuities. There are a number of exemptions under the code and applicable treaties.

A foreign corporation doesn't have effectively connected income if it isn't engaged in a trade or business in the U.S.2 For example, a foreign corporation potentially could earn millions of dollars in revenue selling goods to U.S. customers without generating any effectively connected income if:

  • title to the goods sold and risk of loss pass outside the U.S., and
  • the corporation's activities in the U.S. don't rise to the level of a trade or business.

However, the determination of whether a foreign company (or other foreign person) is engaged in a U.S. trade or business is ''highly factual'' and depends on the facts and circumstances of each case.3 Courts historically have focused on whether such activities, including the activities of the foreign person's agents in the U.S., were ''considerable, continuous and regular.''4

Broadly stated, a foreign company sending employees or other agents into the U.S. or otherwise establishing a physical presence (for example, servers or other assets) might be considered to be engaged in a U.S. trade or business. However, there is no bright-line test.

Federal Income Taxation Of Business Profits Under a Treaty

The U.S. business profits of a foreign corporation that is eligible for tax benefits under an income tax treaty generally aren't subject to federal income taxes unless the corporation has a ''permanent establishment'' in the U.S. As with a trade or business, there is no bright-line test for what constitutes a permanent establishment, but it generally requires a more substantial physical presence or greater level of activity.5

As with a trade or business, there is no bright-line test for what constitutes a permanent establishment, but it generally requires a more substantial physical presence or greater level of activity.

Article 5 of the U.S. Model Income Tax Convention of Nov. 15, 2006 (the ''Model Treaty''), defines a permanent establishment as a ''fixed place of business through which the business of an enterprise is wholly or partly carried on.'' The U.S. Model Technical Explanation accompanying the Model Treaty (the ''Technical Explanation'') provides:

[A] general principal to be observed in determining whether a permanent establishment exists is that the place of business must be ''fixed'' in the sense that a particular building or physical location is used by the enterprise for the conduct of its business, and that it must be foreseeable that the enterprise's use of this building or other physical location will be more than temporary.

Under Article 5 of the Model Treaty, permanent establishments include, among other things, places of management, branches, offices, factories, workshops, mines, oil and gas wells, quarries and certain construction sites or installations put in place for more than a year. There are exceptions for facilities used solely to store, display or deliver merchandise belonging to the enterprise and the maintenance of a stock of goods solely for storage, display or delivery or for processing by another enterprise. This carve-out can be particularly helpful for a foreign company selling goods to U.S. customers without a physical storefront (e.g., through online sales).

Article 5 also carves out fixed places of business that exist solely for the purpose of purchasing goods or merchandise, collecting or supplying information, advertising or other activities of a ''preparatory or auxiliary character'' for the enterprise.

Activities of Agents

An enterprise generally won't be deemed to have a permanent establishment solely on account of the activities of an ''independent agent'' acting in the ordinary course of such agent's trade or business (i.e., an independent contractor working on a non-exclusive basis who isn't otherwise economically dependent on the enterprise).6 However, the activities of employees, as well as agents who regularly exercise contracting authority on behalf of the enterprise (other than for ancillary matters), can be imputed to the enterprise.7

Although the particulars of each treaty vary, most reflect the general principles laid out in the Model Treaty. The permanent establishment threshold under a typical treaty can give a foreign corporation that doesn't have significant assets or employees on the ground some leeway to operate in the U.S. before its business profits are subject to federal income taxes. Moreover, even if a foreign corporation has a permanent establishment in the U.S., only business profits attributable to the permanent establishment are taxable under most treaties (including Article 7 of the Model Treaty).

Note on Updates to Model Treaty

The U.S. Treasury Department announced proposed updates to the Model Treaty on May 20, 2015.8 The updates attempt to address concerns about base erosion, profit-shifting and other tax-avoidance behavior, including potential misuse of permanent establishments.9 Relevant provisions are highlighted below, but these proposals generally don't change the above analysis or the suggested holding company structures discussed in the double holding company structure discussion below.

State and Local Tax Considerations

A detailed discussion of state and local taxes is beyond the scope of this article, but it is important to highlight a few key areas where federal and state tax laws diverge.

First and foremost, U.S. income tax treaties generally don't cover state and local income taxes. Thus, a foreign corporation that is exempt from federal income taxes because it doesn't have a permanent establishment in the U.S. may nonetheless have a sufficient presence to be subject to corporate income or similar taxes in one or more U.S. states.

Another key difference is that a foreign corporation's tax base for state tax apportionment purposes may not be limited to its federal taxable income. If a foreign corporation is part of a group of companies operating as a ''unitary business'' (a single business or economic unit) a state potentially may tax the foreign corporation on its worldwide income from such unitary business (including income from foreign sources) attributable to that state, regardless of whether such amounts are includable in income at the federal level.10 Even if a foreign corporation isn't directly taxable, its income still may be required to be included on the tax return of an affiliate in a state that requires combined reporting for unitary businesses, although some states limit inclusion of foreign affiliates in these reports.

Finally, many states have done away with the requirement that a corporation have a physical presence in order to be subject to corporate income, franchise or gross receipts taxes, particularly where an out-of-state company is actively soliciting business within the state or licensing its intellectual property to an in-state affiliate.11 Most departments of revenue require only a minimal level of contact to assert income tax nexus. For example, according to Bloomberg BNA's 2015 Survey of State Tax Departments (Vol. 22, No. 4), 38 states, the District of Columbia and New York City would consider ownership of a web server in-state to be sufficient to establish nexus. Many also would consider shared space on a third party's network of in-state servers to be sufficient to create nexus.12

A few states, including Ohio, Connecticut, California and New York, have introduced ''bright-line'' nexus rules where an out-of-state company can be subject to corporate income taxes without regard to its actual contacts with the state if sales to in-state customers exceed certain dollar thresholds.13

Foreign corporations may find themselves having to pay state or local income taxes well before they have any federal income tax liability.

The bottom line is that foreign corporations, particularly those from treaty countries, often face a lower threshold for tax jurisdiction at the state level than at the federal level and thus may find themselves having to pay state or local income taxes well before they have any federal income tax liability.14 As discussed in the next section, this increases the importance of inserting a corporate layer between the foreign parent company and its U.S. operations.

Double Holding Company Structure: An Illustration

A foreign corporation may be able to reduce its overall exposure to the U.S. tax system without compromising its eligibility for treaty exemptions on its U.S. business profits through the use of a double holding company structure. The following example illustrates how this arrangement might work with a foreign corporation that won't have a significant physical presence in the U.S.

Assumed Facts

A Country X corporation eligible for benefits under a treaty based on the Model Treaty (''Parent'') is about to enter the U.S. market. Parent and its affiliates are engaged primarily in online sales of goods and services. During the early stages, neither Parent nor any of its affiliates will have employees, office space or other significant physical assets in the U.S. (other than perhaps storage space it rents to hold inventory). The business will operate as needed through independent contractors, none of whom will have authority to enter into contracts on behalf of Parent or its subsidiaries other than for ancillary matters.

The first and most critical step is to create a Country X corporate subsidiary of Parent (''Foreign Holdco''), which will serve as a designated holding company for Parent's U.S. operations. Foreign Holdco would then set up a wholly owned limited liability company (LLC), typically in Delaware, through which it would operate in the U.S.15 No entity classification election would be made, so the LLC would be a ''disregarded entity'' or branch of Foreign Holdco for most federal (and state) tax purposes.16

Purpose of Foreign Holdco

Foreign Holdco serves as a foreign ''blocker,'' putting an extra corporate layer between Parent's foreign operations and the U.S. tax system while still preserving eligibility for treaty benefits.

As a wholly owned subsidiary incorporated in the same country as Parent, Foreign Holdco would be eligible for the same exemptions as Parent under the limitation-on-benefit provisions of most modern tax treaties. Thus, if Foreign Holdco had effectively connected income from the LLC's operations in the U.S., such income wouldn't be subject to federal income taxes as long as Foreign Holdco's U.S. presence through the LLC didn't rise to the level of a permanent establishment.17 Because the LLC would be a disregarded entity in the absence of an election, Foreign Holdco would remain the relevant taxpayer.

Foreign Holdco also serves an important state tax function. As discussed earlier, income tax treaties generally don't cover state and local taxes, so a foreign corporation could be subject to income taxes (or included on an affiliate's return) in one or more U.S. states regardless of whether its business profits are exempt from income taxes at the federal level—even without a significant physical presence. The best way for Parent to reduce its state tax exposure is to set up its U.S. operations through a corporate subsidiary (Foreign Holdco) from the outset. Foreign Holdco may need to file state or local tax returns, but could help to insulate Parent while preserving the group's overall eligibility for treaty exemptions at the federal level.

Purpose of LLC

Operating through one or more wholly owned (and disregarded) LLCs allows Foreign Holdco to potentially limit its general corporate liability without prematurely forgoing treaty benefits.18 Further, the LLC gives Foreign Holdco the option of switching from a branch to a corporate subsidiary structure in the U.S. without a full corporate restructuring if and when Foreign Holdco ceases to be eligible for treaty benefits.

For example, as the LLC begins to retain local staff and establish a physical presence in the U.S., its activities may reach a tipping point at which Foreign Holdco would be considered to have a permanent establishment in the U.S. and would be subject to federal income taxes on the business profits attributable to that permanent establishment. Foreign Holdco could convert its LLC ''branch'' into a corporate subsidiary for income tax purposes up to 75 days retroactively by filing IRS Form 8832, Entity Classification Election.19

Following the election, the LLC would be taxed as a corporation on the same income.20 There wouldn't necessarily be any change in aggregate tax burden if all of Foreign Holdco's income is from the U.S. business, as many treaties align withholding rates (and exemptions, where applicable) for taxes on dividends and branch profits.

Alternatively, Foreign Holdco could simply continue to operate through disregarded entities and file returns directly.

Key Takeaways

Regardless of the structure chosen, a foreign corporation establishing a U.S. presence must carefully weigh the federal, state, local and foreign tax impact of its operations (including sales and payroll taxes) against other business concerns. Following are some key takeaways:

  • Importance of Foreign Holdco. Perhaps the most critical step for a foreign business is to set up a Foreign Holdco. Even if there is no applicable treaty (or the company's physical presence in the U.S. will create a permanent establishment whose profits would be taxable under a treaty), a Foreign Holdco can help to insulate the ultimate parent from U.S. federal and state tax exposure.
  • Impact of Treaty and Use of LLC. Operating through a disregarded entity while claiming treaty benefits could mean the difference between a 35 percent corporate tax rate on current income and an outright exemption at the federal level. This will be particularly meaningful if the foreign corporation anticipates generating significant operating income during the interim period before it has a sufficient presence on the ground to create a permanent establishment.21
  • State and Local Taxes. Tax treaties generally offer no protection from state and local taxes. This increases the importance of setting up Foreign Holdco to act as a ''blocker'' for the ultimate parent early in the process.
  • Siloing Assets. Consideration might be given to holding certain assets that could otherwise create a taxable presence in a separate corporation in order to avoid imputation to the rest of the business and possibly delay the creation of a permanent establishment in the U.S. This also could help to prevent Foreign Holdco from creating tax nexus with some U.S. states.
  • Potential Treaty Planning With Debt. Even after checking the box on the LLC and forgoing the treaty exemption on business profits, Foreign Holdco or Parent could capitalize the (now corporate) subsidiary with debt and possibly claim a treaty exemption on the interest.22 Subject to deduction limitations under I.R.C. Section 163(j) and other provisions, this also could reduce the subsidiary's taxable income in the U.S.23
  • Other Tax Considerations. A foreign company establishing a U.S. presence will have other tax and regulatory obligations to consider, such as sales tax and payroll registration. There also will be information returns and other reports to file with various agencies, including the Internal Revenue Service, the U.S. Treasury Department and the U.S. Department of Commerce.24
  • Evolving Strategy. A company's federal, state, local and foreign tax exposure may change significantly over time, so it is important to periodically reassess earlier planning. A tax structure that works in the early stages of a business likely will need to be adjusted as business needs evolve.

Footnotes

1 As discussed later in this article, most treaties don't cover state income taxes. However, a holding company structure can help to shield the ultimate parent from direct state tax exposure.

2 A foreign partner of a partnership (domestic or foreign) engaged in a U.S. trade or business will itself be deemed to be so engaged on account of the partnership's activities per I.R.C. Section 875(1). Similarly, many states impose corporate income taxes on out-of-state corporate partners of partnerships that conduct business in-state.

3 See Rev. Rul. 88-3, 1988-1 C.B. 268.

4 See Pinchot v. Commissioner, 113 F.2d 718, 719 (2d Cir. 1940) (taxpayer who leased various properties, paid expenses and property taxes and sold and purchased property through a U.S. agent was engaged in a U.S. trade or business because ''[the] management of real estate on such a scale for income producing purposes required regular and continuous activity of the kind of which is commonly concerned with the employment of labor; the purchase of materials; the making of contracts; and many other things which come within the definition of business . . . within the commonly accepted meaning of that word'').

5 For example, in Rev. Rul. 55-617, 1955-2 C.B. 774, the Internal Revenue Service concluded that sales made by an apparently general commission agent caused a foreign corporation to be engaged in a U.S. trade or business for tax purposes, but weren't sufficient to create a permanent establishment under the U.S.-Belgium income tax treaty.

6 See Article 5(6) of Model Treaty and accompanying Technical Explanation. This generally is the case outside of the treaty context as well, but the law isn't always as clear cut. For example, there was no imputation from a U.S. supplier filling customer orders and collecting fees for a foreign corporation in the absence of a formal (dependent) agency relationship in Amalgamated Dental Co. v. Commissioner, 6 T.C. 1009 (1946). However, in de Amodio v. Commissioner, 34 T.C. 894 (1960), aff'd, 229 F.2d 623 (3d Cir. 1962), the Tax Court held that the purchase and management of real estate holdings by independent real estate agents on behalf of the foreign owner caused the owner to be engaged in a U.S. trade or business.

7 See Article 5(5) of Model Treaty and accompanying Technical Explanation. Note that contracting authority limited to ancillary activities (for example, service contracts for the enterprise's business equipment) wouldn't by itself be sufficient to cause an agent's activities to be imputed to the enterprise, even if exercised on a regular basis.

8 See news release, U.S. Department of the Treasury, ''Treasury Releases Select Draft Provisions for Next U.S. Model Income Tax Treaty'' (May 20, 2015), available at http:// www.treasury.gov/press-center/press-releases/Pages/ jl10057.aspx.

9 Among other things, these provisions serve to prevent the use of permanent establishments to avoid paying taxes in both treaty countries, restrict treaty benefits for certain types of ''mobile'' income (including interest and royalties), bar former U.S. companies from treaty benefits after an inversion, revise the limitation-on-benefits article (including taxpayer-friendly provisions making it easier for certain companies to qualify for benefits) and switch off treaty benefits when certain changes are made to either country's tax laws. Even if finalized, these proposed updates (which are subject to further revision) wouldn't impact treaties already in force. However, they are an indication of the U.S. Treasury Department's current negotiating position and may be reflected in new treaties or future amendments to some existing treaties.

10 See Barclays Bank PLC v. Franchise Tax Bd. of Cal., 512 U.S. 298 (1994); Container Corp. v. Franchise Tax Bd., 463 U.S. 159 (1983). For example, the New York Tax Appeals Tribunal ruled in 2008 that an Indian corporation must include worldwide income in its New York tax base in accordance with state tax regulations even though foreign source income generally wouldn't be included in its federal taxable income. The court also noted the irrelevance of the U.S.-India tax treaty for state tax purposes. See Matter of Infosys Technologies Ltd., DTA No. 820669 (N.Y. Tax App. Trib. Feb. 21, 2008).

11 Physical presence is still required in order for a state to assert nexus for sales tax purposes under Quill Corp. v. North Dakota, 504 U.S. 298 (1992). However, courts have chipped away at the physical presence requirement for income tax purposes. See, e.g., Geoffrey Inc. v. S.C. Tax Comm'n, 313 S.C. 15 (1993), cert denied, 510 U.S. 992 (1993) (out-of-state intellectual property holding company subject to corporate income taxes on licensing fees paid by in-state affiliate for use of intellectual property in-state); Tax Comm'r of W. Va. v. MBNA Am. Bank N.A., 220 W. Va. 163 (2006), cert denied, 551 U.S. 1141 (2007) (MBNA found to have nexus with West Virginia for corporate income tax purposes notwithstanding its lack of physical presence because it continuously and systematically engaged in direct mail and phone solicitation and promotion of its credit cards in West Virginia); Lanco Inc. v. Dir., Div. of Taxation, 188 N.J. 380 (2006), cert. denied, 551 U.S. 1131 (2007) (physical presence not required in order for out-of-state intellectual property holding company to be subject to New Jersey corporate income taxes on licensing fees from a New Jersey affiliate). But see Griffith v. ConAgra Brands Inc., 229 W. Va. 190 (2012) (declining to extend earlier MBNA decision to out-of-state licensor where there was no active solicitation in West Virginia); AccuZIP Inc. v. Dir., Div. of Taxation, 25 N.J. Tax 158 (2009) (holding that sales of computer software to New Jersey customers didn't create nexus for corporate income tax purposes and distinguishing facts from those of earlier Lanco decision).

12 Whether they would prevail in court in each instance is another matter.

13 See, e.g., Ohio Rev. Code Ann. Section 5751.01(I)(3); Conn. Gen. Stat. Sections 12-216a, 12-216b; Conn. Info. Pub. 2010(29.1) (Dec. 28, 2010); Cal. Rev. & Tax. Code Section 23101; N.Y. Tax Law Section 209.1. Note that the New York and Connecticut statutes decline to assert bright-line nexus with respect to a non-U.S. corporation that doesn't have effective connected income (i.e., an otherwise taxable presence somewhere in the U.S.). Also, New York City hasn't adopted the bright-line economic nexus rules introduced by New York State (except for certain credit card issuers). See N.Y.C. Admin. Code Section 11-653.

14 A foreign corporation could be subject to state income taxes before it is subject to federal income taxes even in the absence of a treaty. For example, a state may assert tax nexus with a foreign corporation based on contacts with the state (or even sales beyond a certain threshold) that may not be sufficient for it to be considered to be engaged in a U.S. trade or business for federal income tax purposes.

15 More than one LLC might be used for liability purposes.

16 Treasury Regulations Sections 301.7701-2(c)(2)(i), -3(b). Note that single-member LLCs are still treated as separate entities for payroll and certain federal excise tax purposes. Treas. Reg. Section 301.7701-2(c)(2)(v). Additionally, some states still impose certain entity-level taxes on single-member LLCs, although most follow the federal entity classification for income tax purposes.

17 Proposed paragraph 7 of Article 1 of the updated Model Treaty would deny treaty exemptions and other benefits in certain situations where an enterprise of one treaty state derives income from the other treaty state that is attributable to a permanent establishment outside of its own country of residence. The provision would apply when either (1) the profits of the permanent establishment are subject to a combined effective tax rate that is less than 60 percent of the general rate of company tax in the enterprise's country of residence, or (2) the country of residence doesn't tax the income attributable to the permanent establishment and the permanent establishment is situated in a third country that doesn't have a comprehensive income tax treaty in force with the source country. This provision is purportedly designed to prevent opportunities for ''stateless income'' that isn't taxed in either country—for example, the source country exempts the business profits of a foreign enterprise from income tax because it doesn't have a permanent establishment in the source country, but the country of residence exempts the same profits because they are attributable, under its tax laws, to a permanent establishment located in a third country. As currently drafted, it potentially could reach arrangements where the income is fully taxed in a third country. That said, where Foreign Holdco has a permanent establishment in its country of residence to which the income is attributed and remains taxable on that income at comparable rates in its country of residence, this provision shouldn't have any bearing on applicable treaty exemptions.

18 It also may be easier in other respects (for example, opening a bank account) to operate through a ''recognized'' domestic entity.

19 This assumes no prior entity classification election was made.

20 Because disregarded entities are still ''regarded'' as separate entities for payroll tax purposes under Treas. Reg. Section 301.7701-2(c)(2)(v), the change in classification wouldn't result in a change in employer for payroll tax purposes.

21 If the U.S. business isn't expected to generate current income and the plan is to ultimately sell it at a gain, the foreign parent might simply operate through a domestic corporation from the get-go, particularly if it anticipates selling the operations to a foreign buyer, as the sale of a domestic corporation by its foreign parent generally isn't subject to income taxes in the U.S. (assuming the subsidiary doesn't hold significant U.S. real property or mineral resources).

22 The foreign parent likely wouldn't be eligible for the ''portfolio interest'' exemption in I.R.C. Section 881(c)(2) on account of its ownership of the U.S. subsidiary/debtor. See I.R.C. Section 881(c)(3).

23 Note that proposed amendments to Articles 3, 11, 12 and 21 of the Model Treaty would deny treaty benefits for payments of interest, royalties and certain other types of ''mobile'' income if such items are subject to preferential tax treatment in the other state. For example, a taxpayer in one state may not be eligible for the treaty exemption on royalties from the other state if its own state of residence exempts royalties from income or taxes them at a substantially lower rate than other types of income. There are a number of exceptions (including where certain ''substantial activities'' requirements are satisfied).

24 The U.S. Department of Commerce requires filings for certain foreign direct investments in the U.S. and U.S. direct investments abroad. See U.S. Department of Commerce, Bureau of Economic Analysis, ''A Guide to BEA's Direct Investment Surveys,'' available at http://www.bea.gov/surveys/fdiusurv.htm.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.