Services

Structured Finance

Clifix with highly specialized expertise in both accounting and tax is the right choice for structured finance, which requires highly sophisticated knowledge

Structured finance that requires highly sophisticated knowledge

In the structured finance field, complex structures employing advanced financial technology are developed according to the needs of clients, which differ in each case.
Therefore, it requires highly specialized expertise and deep experience in accounting and tax fields for understanding and taking proper measures against accounting and tax risks inherent in these various structures.

SPC Operation

In order to execute structured finance transactions, it is necessary to establish, manage and operate a special purpose company (SPC). As many stakeholders are involved in structured finance, such as financial institutions and investors, operating an SPC requires not only accounting processing similar to that required of other types of companies, but also engaging in more sophisticated and elaborate tasks, including preparation of the various reports and responding to inquiries upon requests from stakeholders.

Clifix’s biggest strength is in having professionals who have highly specialized expertise in both accounting and tax fields. Thus, we can promptly respond to clients’ needs and various issues by forming a right team for each engagement. Furthermore, in the area of SPC administrative services, Clifix, which has many accounting staff, is capable of backing up SPC operations with care in a flexible and quick manner in accordance with the needs of each SPC.

Operating process of structured finance

Responding to needs of various investment structures

We have abundant know-how acquired through long experience of being involved in investment structures for various vehicles, in which we have great confidence. Clifix has been involved in investment structures in and outside Japan for wide-ranging investments, including real estate, private equity, debt investment, and vessel financing. In addition, we have been engaged in establishment and operation of various investment vehicles, such as voluntary partnership, anonymous partnership, specified purpose company, and investment business limited partnership, depending on the investment structure.

Real estate investment
・ Consolidation judgment
・ Lease judgment
・ Consumption tax and depreciation simulations
・ Withholding tax simulation
・ Addressing accounting and tax gaps
・ Examining deduction requirements for specified purpose company
・ Examining operator compensation
・ Examining tax exemption treatment for interest on book-entry corporate bonds, etc.
Private equity investment
・ Supporting reporting to investors (e.g., standards of Investment Business Limited
・ Partnership, accounting standards for financial instruments)
・ IRR calculations
・ Addressing accounting and tax gaps
・ Supporting specific book entries for withholding tax
・ Special tax treatment consideration for foreign partners
・ Responding to matters specific to individual investors
・ Assessing portfolio for equity transfer
Debt investment

・ Simulations by cost recovery method and interest rate adjustment method
・ Supporting acquisition cost allocation at the time of acquiring a receivables pool
・ Accounting and tax treatment at the time of creating a senior-subordinate structure

Vessel financing
・ Lease judgment
・ Depreciation simulations
・ Accounting work corresponding to the form of charting vessels
・ Hedge accounting
・ Handling of tax haven treatment
・ Consideration on whether withholding is required in cash flow waterfall

Structuring

Tax and accounting advice
In order to form an investment structure and operate it stably until exiting with best performance as projected, expected accounting and tax risks must be sufficiently removed in early stages of creating the structure. We can provide useful advice based on its abundant know-how.

  • ・ Providing advice on structuring
  • ・ Consolidation judgment
  • ・ Off balance-sheet judgment
  • ・ Contract review
  • ・ Consumption tax and depreciation simulations
  • ・ Tax treatment for various SPCs
  • ・ Cross-border transactions
  • ・ Preparing opinion letters

SPC establishment
While establishing a SPC involves complicated administrative procedures from appointment of directors and location for registration of incorporation, time and resources are very limited for this at the stage of closing an investment deal. Clifix can, in cooperation with judicial scriveners, conduct the administrative arrangements on your behalf for the incorporation of SPCs in accordance with their structures in a comprehensive and quick manner.

  • ・ Registration of incorporation, various filings
  • ・ Introducing directors, providing the head office location

Interim control

Outsourcing services for SPC
Operating a SPC requires conducting routine tasks as it is also the case for ordinary corporations; however, it is not necessarily efficient to internally securing personnel for these tasks. Clifix, which has experienced accounting staff, can conduct these tasks quickly on behalf of you at low costs.

  • ・ Bookkeeping
  • ・ Preparing financial statements (non-consolidated, consolidated) and tax returns
  • ・ Preparing reports for investors (financial statements, distribution statements, and consolidation package)
  • ・ Accounting audit and tax investigation response
  • ・ Providing interim accounting and tax advice
  • ・ Cash management
  • ・ Managing mails, etc.

Exit

Providing accounting and tax advice and outsourcing services at the time of exit When exiting a structure, you need to, among other things, sell the investment,
dissolve/liquidate the SPC. In recent years, in a harsh economic environment, increasing number of cases has seen an exit that is different from what was initially expected due to reasons such as huge investment losses, default event, and failure of a stakeholder. In responding to such events, we will provide support that is best for our clients.

  • ・ Providing advice on ending a structure
  • ・ Registration of SPC dissolution
  • ・ Filing SPC dissolution and liquidation tax returns
  • ・ Preparing reports for investors
  • ・ Providing supporting for SPCs in the event of default
  • ・ Fund restructuring
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