Running head: MEETING MINUTES 1

Meeting Minutes
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Meeting Minutes
Kelly & Associates Consulting
November 1, 2019
Objective
The objective of this meeting was for the group to determine whether it would be ethically,

politically, and financially more beneficial for Heidari, Inc. to build a new wind turbine

manufacturing facility in Denmark as compared to proceeding with its current plan of

constructing the facility in the United States. The main factors likely to influence the team’s

decision-making process were the two country’s tax rates, political stability, and other

socioeconomic factors likely to affect Heidari, Inc.’s long term success.

Topics
Review of Previous Meetings
During the previous meeting, there was a consensus within the team that Heidari, Inc. should

construct its new facility within the United States. However, following more in-depth

research and analysis into Denmark's political and economic climate, some team members

were persuaded that it would be irresponsible not to explore the possibility of our client

investing in Denmark.
Revision
The previously held views concerning the construction of a new wind turbine manufacturing

facility in Denmark had evolved with some key members of the team expressing their support

for the idea. Some of the team members opined that the main factors that contributed to their

inclination to support the move include, but not limited to, Denmark’s favorable corporate tax

rates, the country’s political stability, and the country’s membership within the European

Union (EU). More importantly, the Danish government had approached our client, asking

Heidari, Inc., to construct its new facility in Denmark. Because of this, it was believed that

Heidari, Inc. would likely get more incentives from the Danish government when compared

to the United States government.

Tax Analysis

One of the main issues that were brought up during the meeting is the fact that the present

incremental tax rate in the United States would be 33% (21% Federal and 12% State).
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However, it was noted that should make that our client move its new facility to Denmark, the

company would be charged 22% in corporate income, one of the lowest tax rates in

developed countries. Furthermore, it was noted that we could negotiate with the Danish

government on behalf of our client to further lower the corporate tax rate for a specified

period once the facility was operational or profitable. This argument was made by one of the

team members who opined that it would be easier to get better incentives in Denmark due to

the fact that the Danish government had approached our client asking Heidari, Inc. to

construct its facility in Denmark.

The main argument against constructing the facility in Denmark arose from the different

depreciation rules used in Denmark compared to those used in the USA. For instance, in

Denmark, depreciation allowances on buildings are claimed at up to 4% per annum using the

straight-line method of depreciation. Utility plants, on the other hand, can only be depreciated

at only 15% per annum using the declining balance basis. Some team members were quick to

note that in the case of the United States, however, the Tax Cuts and Jobs Act of 2018 allows

corporations to increase the first-year bonus depreciation rate to 100%. This bonus

depreciation applies to long-term assets that went into service between September 27, 2017,

and January 1, 2023. After the expiry of the 100% first-year bonus depreciation, the

depreciation rates will gradually go down through 2027.

Based on these findings, there was a discussion as to whether we should allow the

depreciation rates alone to influence our final decision to the client. Joanne asserted that this

decision should only be arrived at after consulting the Danish government in order to find out

if they would be willing to match the USA's bonus depreciation while maintaining their

current 22% corporate tax rate or lower. Before moving on to the next segment, group

members were all in agreement that should the Danish government agree to our request; then,
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our recommendation ought to be in support of Denmark if other factors are not too

disadvantageous to our client.

Political, Social, and Economic Factors

Ashley informed the group that when compared to the United States, Denmark is relatively

safer in terms of either domestic crime rates or possible terror attacks. This can be attributed

to Denmark’s strict gun laws and political stability buoyed by its membership in the EU.

Take, for instance, in 2018, Denmark had a murder rate of 0.8 per 100,000, with a total of 54

murders in 2017. On the other hand, the US had a murder rate of 5.0 per 100,000 in the same

year. Based on Ashley's data, Denmark offers a potentially safer and more stable environment

for both our client's company and its employees. Finally, several team members were in

agreement that Denmark’s membership in the EU offered our client with access to affordable

labor and a bigger market within the region.

Executive Summary

The primary objective of this meeting was whether we should advise our client, Heidari, Inc.,

to construct its new facility in Denmark or the US. After reviewing each country's corporate

tax rates, it was considered that Denmark had better tax rates. However, the first-year bonus

depreciation offered by the United States, but not available in Denmark, was perceived as a

possible hurdle for investors looking to move to Denmark. Nevertheless, political, social, and

economic factors appeared to favor the construction of a new facility in Denmark compared

to the US, as long as the Danish government agreed to depreciation rules that were similar to

America's first-year bonus depreciation. This is a prospect that we consider to be achievable.