Page 8
THE BATTALION
THURSDAY. APRIL 26. 1979
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U.S. protects foreign investors s
...Continued from page 1.
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capital gains tax when they sell
agricultural or undeveloped land,
Reynolds said.
According to Reynolds, this mea
sure has received widespread sup
port, with 40 co-sponsors of the bill
in the U.S. Senate and 150 co
sponsors in the U.S. House of Rep
resentatives.
The U.S. Treasury Department,
is also looking into the effects of
numerous tax treaties the United
States has with other foreign coun
tries. These treaties were initially
set up to avoid the double taxation
of international investors, but in
certain cases they are now being
used as a means of easy investment
in the United States.
Under this type of treaties, the
investor is exempt from a certain tax
in one country but is subject to a
similar tax in the other country. In
this way the investor is not paying
the same tax twice, hut will pay an
equitable share of taxes in both
countries.
The Netherlands Antilles tax
treaty is one which has been ex
tremely beneficial to foreign inves
tors in the United States. Many in
vestors from all over the world first
incorporate in the Netherlands Anti
lles, a small island country off the
coast of Venezuela, in order to take
advantage of the treaty.
“The Netherlands Antilles treaty
is a problem area,” said Reynolds.
“We know people are using it as a
vehicle to invest in the U.S. This is
exactly the thing we’re going after. ”
The Netherlands Antilles tax
treaty is unusual in many ways, ac
cording to Stan Langbein, a lawyer
for the Treasury Department.
“Basically, people can get low tax
rates there for their investments
over here,” said Langbein.” Nor
mally both countries have compara
ble tax rates, but in the Netherlands
Antilles the income tax is favorable
to the investor.”
Specifically, the Netherlands
Antilles tax treaty allows the corpo
ration a yearly election in terms of
how it is to be taxed. Under the
terms of the treaty, the corporation
can choose to be taxed at a flat rate
of 30 percent on gross rental income
for the year, or it can be taxed on
net income at a marginal rate of up
to 46 percent, applicable to any cor
poration.
In the year of sale, for example,
the Netherlands Antilles corpora
tion may choose to be taxed on its
gross rentals, but if it sells the prop
erty on, say, January 2, the gross
rental tax would be negligible for
the year, and all the gain would be
free of capital gains taxes.
According to Langbein, the
Netherlands Antilles also has liberal
corporate rules with nonresidents
taxed lightly there and here in the
United States.
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“So they get off on both ends,” he
said.
Movenpick N.V. Corporation,
which owns a farm lying partially in
Brazos County, is one company
which takes advantage of the
Netherlands Antilles tax treaty.
Burton Engel, former managing
director of Movenpick, said the use
of the tax treaty was not new to
foreign investors wishing to buy
U.S. property.
Engel, now a member of E.G.
Francis and Company, a New
York-based investment banking
firm, said the foreigners who own
Movenpick came to him for help in
setting up the corporation to buy
the nearly 1,500-acre Brazos and
Robertson County farm.
The corporation was “strictly set
up to own that one piece of prop
erty,” said Engel. “We acted solely
in a brokerage capacity and have no
economic interest in the land.”
At the time of the transaction
Engel was a member of Amivest,
another New York-based invest
ment firm which analyzes invest
ments and consults with foreign in
vestors. Soon after the transaction,
Engel said he left Amivest to help
start E.G. Francis.
The Brazos County area was cho
sen because of the fertile farmland
available, said Engel, adding that
the “sex appeal” of Texas and the
Sunbelt was also a slight factor.
Engel’s company currently
engages in a great deal of foreign in
vestment in the United States; most
of its activity is commercial rather
than agricultural property though.
“Among other things, we market
office buildings and apartment com
plexes,” he said.
Foreign investors are currently
buying U.S. industries and have
long been investing in the stock
market, Engel said.
“This is not new,” he stressed.
Jambers has also stressed the im-
portance of having
perspective when viewing tk'
creased rate of foreign invest.^
the United States.
“While foreign investment
United States continue to grot,
should be noted that U.S,
vestments abroad excei
rect investments in is countiy
approximately five times,
said.
Like many foreign investors,!
two foreigners who ownoneo(|
larger motels in the Bryan-CoJ
Station area see their U.S. i®j
ments as being an asset for lln
gion in which they are loci
rather than a matter of concen
the community.
“It is all revenue to the
ment,” they said. “Wearep
the taxes, we pay for the realte
they all get money from us -
we are hiring all Americans tor
age and care for the property.
Designs created
The handicapped will build domestic items
By KIPP SHACKELFORD
Battalion Reporter
The next time you shop at area
Bryan-College Station stores, it is
quite possible that you may pur
chase a household item which was
created by Texas A&M University
engineering design graphics stu
dents.
Students in section 511 of Texas
A&M’s EDG 106 course have been
planning and building models of five
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commercially salable household
product ideas for the past two
months.
One of these product ideas, along
with building instructions, will be
given to persons at the Brazos Val
ley Mental Health Mental Retarda
tion (MHMR) Center, who will
learn to construct them for sale at
local stores in the Bryan-College
Station area.
The purpose of the project is to
help the mentally handicapped ac
quire the necessary experience and
skills to eventually become an active
part of the labor market.
The five product ideas include a
two-gallon aquarium stand measur
ing 3 feet by 1 foot and which con
tains a supply cabinet beneath, and
also a 21 inches by 8 inch set of fold
ing, storage shelves; ^designed for
kitchens with small counter space.
Two other ideas are a plant stand
that can hold up to three large
plants and a folding hibachi stand.
The last is a game table, with in
terchangeable parts, which can also
serve as a cutting board or lap desk.
“Working on the products gives
students not only a chance to learn
the design process, but also to be of
service to the community,” said Roy
Hartman, Texas A&M assistant pro
fessor of engineering design
graphics.
Hartman said he feels this project
will be good experience for the stu
dents because they are designing ac
tual products to be sold on the mar
ket.
The products will be built at the
Dilly Shaw Vocational Training
Center in Kurten, which is part of
an MHMR program for the mentally
retarded. The work will begin next
week when the center makes a deci
sion as to which product to use.
Forty handicapped persons will
work on the product and receive
building instructions from eight
center supervisors. These super
visors help to explain and break
down the construction process into a
distinct step- by-step procedure for
the workers.
The workers will be paid accord
ing to their individual production
level. When supervisors feel that
workers have progressed enough in
competency and efficiency to earn
over $2 per hour, the workers be
come eligible for outsidejoli
These job opportunities are
out and arranged by job places
specialists at the center.
“We try provide the raentit
handicapped with an opportunity!
earn wages on their own, w
step toward their independenct'
said Steve Schoen, MHMRdirecH
for the project.
Each of the five products
range in price from $15-$2(liE
EDG students and Dilly Shawpe
sonnel are currently negotiate
with local merchants who haveiint
cated that they might sell thech
sen products.
Profits received from the
the product will be used fonvoih
pay and building material expei
at the center.
“I feel that several of theprodri
will help to provide, our work
with useful skills, which will
fully lead to successful job pl»
ment,” Schoen said.
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A UNIVERSAL RCIURE
The Dilly Shaw center currel
is involved in several other proia'
with various local industries, inclti
ing construction of wooden sloni
windows for the Brazos V
Community Auction Agency,ji
rial work for local churches si«
cleaning of Bryan post office
ery trucks.
Schoen said he feels thatlB
EDG products will provide a dir
ent type of training for persons!
the Dilly Shaw Center, by teach®
them to work with small construe
tion tools.
He also said there is a strongpos
sibility that these products will I*
more easily marketed and ingreate
demand than other projects which
the center has undertaken in It
past.
M,
imi
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