Senior Associate Wisdom Hon, identified as "one to watch" by Legal Week Private Client Global Elite for the second year running, will sit on an international panel at this week's Legal Week Conference discussing new economic substance laws and their impact.

The discussion, titled "Economic substance: What is it? What is the impact of the rules?", will see Wisdom provide expert insights into the newly implemented substance obligations across various jurisdictions and how clients and their advisers can identify and mitigate potential exposure in the face of them.

New economic substance regulations have been voluntarily adopted across a number of offshore jurisdictions, including the British Virgin Islands (BVI), Cayman Islands, Jersey and Guernsey, in response to recent policies from the European Union (EU) and the Organisation for Economic Cooperation and Development (OECD).

While the economic substance rules introduced by these jurisdictions are largely similar, there are nuances from one jurisdiction to the next. Broadly speaking 'resident entities' in each of the jurisdictions that conduct one or more 'relevant activities' as defined in the substance rules are subject to three requirements:

  • the 'directed and managed' test (activities such as board meetings must occur within the jurisdiction)
  • the 'Core Income Generating Activities' (CIGA) test (the entity must conduct relevant CIGAs within the jurisdiction)
  • the 'adequate' test (the entity must have an adequate physical presence in the jurisdiction in terms of office space, employees etc.)

Wisdom said: "Economic substance rules have been adopted across the offshore jurisdictions where Ogier operates, demonstrating their continued commitment to working productively with key international bodies and their regulators. Advisers are working with their clients to ensure both compliance with the new regulations and mitigation of any operational impact that may result from them. Achieving the right balance between these is an area we've been advising many clients on and will be a key focus of the panel discussion."