Hedging instruments are contracts whose fair value or cash flows offset the variations in the cash flows or fair value of the hedged item. When a company enters into a contract with a hedging instrument, it eliminates the risk of an adverse currency fluctuation, but also creates potential for gains from favorable movements of the exchange rate.
Our organization has developed a Financial Hedging Instrument that not only offsets currency risk, but also has several tax benefits for business owners. The instrument allows business owners to pay out dividends from their businesses in a tax efficient way. The instrument is multi-functional and works on several levels, namely:
• As a currency hedging instrument
• For Corporate Tax deferral
• For Capital Gains Tax exemption