UA-R-GC-1914-01-01-1979-05-30_Page-007

THE AMERICAN UNIVE~SITY IN CAIRO Minutes of the Meeting of the LE Investment Com.ni ttee r1ay 30, 1979 The River Club~ New York City Present were: Messrs. Bell, Hedlund, ~kCloy, O'Connor., Pedersen. Snaith, Stone (Chairman), Thorne, and Wadsworth. 1. Fund Tax Situation Mr. Wadsworth explained that Coudert Bros. has been examining the question and has determined that Egypt taxes the general partners in a partnership as individuals, and the limited partners as an organization. The firm is pursuing the question of the degree to which the Fund can de­duct interest payments as an expense against earnings. Coudert is examining as well other ways in which the Fund's_ tax situation can be improved. In addition to this kind of tax planning, it might be possible to get some relief directly from the Egyptian Government. One possibility is to go direct to the Government and try to get a tax exemption or partial concessions for the Fund. President Pedersen does not think this is likely. Another possibil)ty is to obtain clearance for AUC to lend capital to the Fund and for the Fund to pay the University interest, which would pre­sumably be tax deductable. Mr. Snaith explained that under law 43, returns on investments of capital are tax-free for either five or eight years. Therefore AID should have no objection to equity investments on the basis of tax considerations alone