Vistaprint 2011 Annual Report Download - page 36

Form 10-K
Because of our corporate structure, our shareholders may find it difficult to enforce claims
based on United States federal or state laws, including securities liabilities, against us or our
management team.
We are incorporated under the laws of the Netherlands, and the vast majority of our assets are
located outside of the United States. In addition, some of our officers and management board
members reside outside of the United States. In most cases, a final judgment for the payment of
money rendered by a U.S. federal or state court would not be directly enforceable in the Netherlands.
The party in whose favor such final judgment is rendered would need to bring a new suit in the
Netherlands and petition the Dutch court to enforce the final judgment rendered in the United States,
and there can be no assurance that a Dutch court would impose civil liability on us or our
management team in such a suit or in any other lawsuit predicated solely upon U.S. securities laws.
In addition, because most of our assets are located outside of the United States, it could be difficult
for investors to place a lien on our assets in connection with a claim of liability under U.S. laws. As a
result, it may be difficult for investors to effect service of process within the United States upon us or
our management team, enforce U.S. court judgments obtained against us or our management team
outside of the U.S., or enforce rights predicated upon the U.S. securities laws.
We may not be able to make distributions or repurchase shares without subjecting our
shareholders to Dutch withholding tax.
A Dutch withholding tax may be levied on dividends and similar distributions made by Vistaprint
N.V. to its shareholders at the statutory rate of 15% if we cannot structure such distributions as being
made to shareholders in relation to a reduction of par value, which would be non-taxable for Dutch
withholding tax purposes. We have repurchased our shares and may seek to repurchase additional
shares in the future. Under our Dutch Advanced Tax Ruling, a repurchase of shares should not result
in any Dutch withholding tax if we hold the repurchased shares in treasury for the purpose of issuing
shares pursuant to certain employee share awards or for the funding of acquisitions. However, if the
shares cannot be used for these purposes, or the Dutch tax authorities challenge the use of the
shares for these purposes, such a repurchase of shares for the purposes of capital reduction may be
treated as a partial liquidation subject to the 15% Dutch withholding tax to be levied on the difference
between our recognized paid in capital for Dutch tax purposes and the redemption price.
We may be treated as a passive foreign investment company for United States tax purposes,
which may subject United States shareholders to adverse tax consequences.
If our passive income, or our assets that produce passive income, exceed levels provided by
law for any taxable year, we may be characterized as a passive foreign investment company, or a
PFIC, for United States federal income tax purposes. If we are treated as a PFIC, U.S. holders of our
ordinary shares would be subject to a disadvantageous United States federal income tax regime with
respect to the distributions they receive and the gain, if any, they derive from the sale or other
disposition of their ordinary shares.
We believe that we were not a PFIC for the tax year ended June 30, 2011 and we expect that
we will not become a PFIC in the foreseeable future. However, whether we are treated as a PFIC
depends on questions of fact as to our assets and revenues that can only be determined at the end of
each tax year. Accordingly, we cannot be certain that we will not be treated as a PFIC for our current
tax year or for any subsequent year.
If a United States shareholder acquires 10% or more of our ordinary shares, it may be subject
to increased United States taxation under the “controlled foreign corporation” rules.
Each “10% U.S. Shareholder” of a non-U.S. corporation that is a “controlled foreign
corporation,” or CFC, for an uninterrupted period of 30 days or more during a taxable year, and that
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