Licensing & Royalty Structures

Royalty, licence fees and similar payments for the use of intellectual property (patents, copyrights, image rights, brand names, trademarks, etc) are generally subjected to high rates of withholding taxes in the countries in which the intellectual property (IP) is used. However with careful planning the impost of these taxes can be significantly reduced.

Asiaciti Trust, through its subsidiary company, Technology Management Limited, assists its clients to plan the ownership of their intellectual property in a manner that will create the most tax efficient structure for the international licensing or distribution of such intellectual property. Early stage assistance in the development of the ownership strategy of intellectual property will significantly enhance the long term value of the IP revenue stream. The registration or protection of ownership of intellectual property is often a complex and lengthy process, and the subsequent transfer of such ownership can be equally time consuming. It is therefore important when creating intellectual property to be cognizant of the need to place ownership of the IP in the correct entity and jurisdiction.

A significant development during the age of globalisation has been the rapid and lucrative commercialisation of most forms of international sport and other forms of entertainment. This has created greater awareness of the economic value of a musician, model, artiste or sportsperson's "brand" or image rights. Whilst the income from the performance endeavours of these entertainers is location specific and generally taxable at source, revenues from image rights are normally derived from a wider global or regional market. A properly planned separation of the intellectual property (the brand name or image rights) from the performance income stream can produce a significantly more tax efficient accumulation of wealth process for the international entertainer. Technology Management Limited works with its clients to create the most beneficial arrangements for the exploitation of their image rights.

An effective licensing or royalty structure will normally involve the use of tax treaty network centres so as to avail of the concessionary rates of income tax available under double tax agreements. Consequently each structure needs to be considered on its merits and proper advice taken to ensure compliance with all relevant fiscal and intellectual property laws.

Please click here to request further information about our international licensing and royalty structure services.