• Enacting Anti-thin Capitalisation Rules for Nigeria

    Enacting Anti-thin Capitalisation Rules for Nigeria

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    Dr Olumide Obayemi, Legal Practitioner, Ajumogobia & Okeke and Senior Lecturer, Department of Business Law, Lagos State University Ojo, examines an important topic that straddles corporate law, corporate finance and taxation. In his article, “Enacting Anti-Thin Capitalisation Rules for Nigeria”, he examines a financing strategy mostly favoured by multinational corporations (MNCs) in making investments outside their home nations. As debt is often a more tax efficient method of finance than equity because interest is tax deductible while dividend is not, most jurisdictions have prescribed rules to deal with the debt/equity mix by placing a ceiling on debt/equity ratio so that their tax base is not eroded as foreign firms finance their subsidiaries with excessive debt. Dr Obayemi explores anti-thin capitalisation rules in several jurisdictions and advocates the enactment of effective anti-thin capitalisation rules in Nigeria with a safe harbour of 1.5 to 1 debt-to-equity as the starting point.

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  • Towards a Reorganisation System for Sovereign Debt - An International Law Perspective

    Towards a Reorganisation System for Sovereign Debt – An International Law Perspective

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    Tony Odiadi, Visiting Scholar, Georgetown University Law Center, Washington DC, reviews the book “Towards a Reorganisation System for Sovereign Debt – An International Law Perspective” written by Holger Schier. Easily, one of the most engaging issues facing scholars, financial experts and policy makers is the question of how best to manage the debt owed by sovereigns. Debt obliges a repayment. However, in getting back the credit extended to a state or sovereign, a person faces all manners of legal obstacles, many of which are derived from procedural complexities and extant principles at the very heart of western legal thought and jurisprudence.

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