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Case of capital pool

  • A Japanese trading group plans to establish a capital pool business in order to meet the capital needs of each trading company within the group. The functions of the business include the unit account balance increasing and the daylight overdraft of member companies, the active appropriation and collection, the entrust debit and credit among member companies and the respective interest accrual on the deposit and loan of member companies towards the group headquarters.
  • Our team involved in the research and services of the development of the capital pool with bank as the intermediary.

  • Our services:
    • Tax policy research and tax related analysis at the early stage;
    • The tax related analysis and estimation of interest income and expenses generated from the capital pool, the pre-tax deduction of interest, the influence of related parties relationship and interest documents (invoices).
    • Data estimation and determination of borrowing and lending rate of the group;
    • Based on the capital needs and the cost of capital in budget, to assist the group to estimate the optimized borrowing and lending rate.
    • Assistance with function design of the capital pool;
    • To collect the function requirements of the capital pool from companies within the group and the function services provided by the bank, to assist both parties with the negotiation and to guide the bank to make the corresponding function development and adjustments.
    • Presentation of capital pool business and training of system operation;
    • To present the functions of capital pool business and organize the training on system operation of the bank.
  • With our assistance, the group successfully established the capital pool business and achieved the objectives of the project: to save the interest cost of capital and to effectively manage the daily fund position, which not only meets the capital payment requirements, but also generates economic benefits from the surplus funds.
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