Types of cash pooling agreement Sample Clauses

Types of cash pooling agreement. There is no reliable source of information on the types, use and importance of cash pooling agreements in Luxembourg or by Luxembourg company groups. Notional and physical cash pooling agreements covering a number of denominations are known to exist, and several larger local company groups use cash pooling in a purely domestic context. Local bankers tend to see cash pooling agreements as a banking product offered mainly by global competitors which have a presence in many jurisdictions and/or easy access to a group’s head management and chief financial officer. This view is, however, partially contradicted by the author’s experience of notional cash pooling schemes operated by international company groups where the master account is held with the group’s house bank, a local bank, and additional accounts are held with other banks rather than subsidiaries or branch offices of the house bank. It also seems to be a trend that large company groups identify the most appropriate host jurisdiction for their cash pooling agreements based on an international comparison of legal, accounting and tax issues. The Luxembourg authorities promote cash pooling in and through Luxembourg alongside other bank industry products, as do the Luxembourg tax advisory community, lawyers and chartered accountants, despite the secondary role that tax planning usually plays in cash pooling schemes.