A Licensing structure can be adapted to achieve the maximum tax and commercial advantages.  The basic principles of the Licensing or royalty structure are as follows:

 

• The beneficial ownership of the intellectual property (i.e. trademark, film rights, copyrights, patents etc.) is in an offshore or a low tax jurisdiction.

• In order to utilise Double Tax Treaties the intermediate licensing company is located in a suitable jurisdiction.  Ireland is ideal because of its large network of Double Tax Treaties, and because it is possible to pay certain royalties with no withholding tax deduction.

• The royalty payable by the Irish licensing company to the beneficial owner of the intellectual property is deductible against royalty income for tax purposes.