2018/2019 Edition of the Global Regulatory Update

Treasury and Trade Solutions 58 Impacts and issues to consider Going forward, the shift from a global taxation to territorial will enable U.S. corporations to regularly repatriate offshore cash as dividends to the U.S. parent. U.S. and non-U.S. companies will examine opportunities across the U.S. landscape with the globally competitive U.S. tax rate. In the latest survey of Citi clients in April 2018, 9% said that they “Already have a complete strategy in hand and either awaiting execution or executing” while 57% said they have “No concrete plans yet – still in the process of evaluating the impact and best course of action with tax partners”. For U.S. parented clients, they have been taking steps to solidify their liquidity structures for more regular and extensive dividend repatriation. In step, they have examined countries and currencies to incorporate into these liquidity structures and determine how and if liquidity management pooling and FX hedging should be integrated further. Of particular interest, we have seen clients re-examining the efficiency of multi-entity, multi-currency pooling structures in relation to their tax and repatriation strategy but because the retention of legacy tax codes, we have observed U.S. corporates continuing to be cautious about comingling their U.S. and non- U.S. cash pooling structures. Some U.S. companies are considering interim solutions for investments prior to deployment of repatriated cash. Also, local trade and financing solutions are also being examined. For non-U.S. parented clients, they have been reconsidering how to fund their U.S. business with loans or equity as they look to remain competitive in the U.S.