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Business,not tax,behind Arnault Belgium citizenship bid-company
January 18, 2013 / 5:36 PM / 5 years ago

Business,not tax,behind Arnault Belgium citizenship bid-company

* LVMH says he wants to ensure foundation control of family assets

* Bernard Arnault created foundation in Belgium in 2008

* France does not allow for creation of such foundation

* Arnault accused in France of trying to avoid new taxes

* He will remain fiscal resident of France-company

By Astrid Wendlandt and Ben Deighton

PARIS, Jan 18 (Reuters) - Tycoon Bernard Arnault, accused in France of trying to dodge new wealth taxes, wants Belgian citizenship to protect a foundation designed to control his family’s holdings in LVMH if he dies, a spokesman for the luxury group said.

Arnault, France’s richest man and LVMH chief executive, caused an uproar when he sought Belgian citizenship last September, an attempt which has been blocked by Belgian prosecutors.

Arnault denies that the Belgium move is a response to French President Francois Hollande’s planned tax hikes on the wealthy, saying he intends to remain a fiscal resident of France.

“The goal of this foundation is to protect the unity of the family holdings in the group until 2023,” the LVMH spokesman said on Friday, adding Arnault wished to protect LVMH from being sold.

France does not allow the creation of the type of private foundation Bernard Arnault set up in 2008 in Belgium under the name of Protectinvest.

According to the foundation’s statutes, administrators must be at least 50 years old, which would prevent Arnault’s five children from ever sitting on its board and selling their stakes, or parts of the group or their assets.

Arnault’s eldest child, Delphine, who sits on the LVMH board, is 37 and would be 48 by 2023, while her father would be 74.

The LVMH spokesman confirmed a report in Belgian newspaper L‘Echo on Friday which said that by becoming Belgian, 63-year-old Arnault would secure the foundation’s legal basis and make it difficult for anybody in France to challenge it.

Earlier this month Belgian prosecutors advised against giving citizenship to Arnault because he had not shown he had been mostly resident in Belgium for the required period of at least three years. Belgian prosecutors also launched a preliminary examination of his businesses.

Arnault and his family holdings control LVMH, the world’s biggest luxury group, through a complex web of companies, making it difficult to assess exactly how much they own altogether.

LVMH’s stable of brands range from Louis Vuitton, Fendi and Celine to Cognac producer Hennessy, watchmaker Tag Heuer and jewellers Fred, Chaumet and Bulgari.

Manoel Dekeyser, a Brussels-based tax lawyer, said that by becoming Belgian, Arnault could help ensure that his foundation would be protected under Belgian law.

“It’s my opinion that one way or another, recourse to Belgian law would allow him to protect the unity of the empire,” he said.

French actor Gerard Depardieu confirmed last month he was leaving France for Belgium to shelter from tax and has since received a Russian passport. (Editing by David Cowell)

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