South Stream flows to the Netherlands

The operator of the South Stream might change its registration.
The operator of the sea part of the South Stream gas pipeline might change its registration and move from Zug (Switzerland) to Amsterdam. It is first of all connected with the tax conditions. The shareholders will have to eliminate the old JV and found a new structure. However, it will not take  more than 2 weeks. It will be the 3rd JV founded for the gas pipeline, the construction of which is to start at the end of the year.
Gazprom and its partners by the South Stream project consider the issue of changing the registration of the operator of the sea part of the South Stream Transport AG from Zug (Switzerland) to the Netherlands. The interlocutors of Kommersant in the sector confirmed this information, however, added that the issue is at the early stage of discussion and the final decision hasn’t been made as yet. The change of the country of registration might be connected with the better conditions of taxation, sources of Kommersant think. The interlocutors of Interfax say that Italy (one of the main shareholders of the project - Eni) is not in good relations with the Swiss legislation. Gazprom and the operator of the South Stream don’t comment.
South Stream is the gas pipeline from Russia to Europe via the bottom of the Black Sea with the projected capacity of 63 bln cubic meters of gas a year (4 branches of 15.57 bln cubic meters each). The start of the construction is planned for the end of 2012, the launch of the 1st branch – for December 2015. The reaching of the full capacity is expected by 2018. The approximate cost of the South Stream is €15.5 bln. Now the shareholders consider more than 5 variants of laying the gas pipeline and the routes of a number of offsets.
It was Eni which in 2008 registered a JV South Stream AG in Zug on the parity basis with Gazprom for the construction of the gas pipeline from Russia to Europe. Later EDF and BASF/Wintershall joined the project. In this connection a new company South Stream Transport AG was registered in Zug in late 2011. Now its shareholders are Gazprom (50%), Eni (20%), EDF and BASF (hold 15% each). Eni has already registered a company South Stream BV in Amsterdam, however, in February 2012 the enterprise was renamed into Eni JPDA 11-106 BV.
A partner of the law firm “Korelsky, Ischuk and partners”, A. Samokhvalov, say the reason of the changing the registration sounds reasonable. The Netherlands has a number of advantages – at least for the Russian companies. In particular, there is an agreement with Russia on avoiding double taxation. The Netherlands also has a strong position on the protection of investment of ccompanies registered in the country. However, the company’s move was hardly Gazprom’s idea, he says.
Mr. Samokhvalov adds that there is no mechanism of changing the location in Europe without the liquidation. So the partners will have to found a new company though they seem to not have to change the name. According to the lawyer, the foundation of a new company won’t take long: in the Netherlands it takes not more than 2 weeks. However, all the agreement, which were signed by the old companies, will have to be resigned, that might take some time. According to him, such movements are a rare practice in the world, of large companies as well.

http://www.kommersant.ru/doc/1996780
Translated by Galiya Musabekova