XXXXJOINTLY OWNED FOREST

.

The Project for Expanding and Developing Jointly Owned Forests

MetsäPremium LtdPhotos by Riikka Jauhiainen

Contents

1 Jointly owned forests in Finland

2 Administration of a jointly owned forest

3 Operation of a jointly owned forest

4 Partnership in a jointly owned forest

XXXX Jointly Owned Forest

Address

Contact person and telephone number

E-mail address

Website address

The Project for Expanding and Developing Jointly Owned Forests

MetsäPremium LtdPhotos by Riikka Jauhiainen

1 Jointly owned forests in Finland

• A jointly owned forest (JOF) is an area belonging to several real estates jointly.

• These privately owned land and water areas are managed by the partnership.

• The shareholders of a JOF are the owners of shareholding real estates.

• A JOF is primarily intended to be used for practicing sustainable forestry for the benefit of shareholders.

3

1.1 The location of JOFs

• There are over 275 jointly

owned forests in Finland.

• The total area of JOFs in Finland

is approximately 576 000 ha –

about 4,5 % of the area of non-

industrial private forests.

• The size of JOFs varies from

under 20 ha to 90 000 ha.

• The largest JOFs are to be found

in Northern Finland.

4

Land and water areas of Finnish jointly owned forests in the year 2013. Source: Land Survey of Finland

1.2 The history of JOFs

• The oldest jointly owned forests

date to 1887.

• Established only by the officials

before 2003– A majority were established through

the basic land consolidation and as JOFs for relocated settlements in the period 1930−1960.

• Since 2003, JOFs have been established through agreements between forest owners.– The number of JOFs has doubled ever

since.

5

1.3 The history of XXXX Jointly Owned Forest

• Date of establishment: xxx• Type of JOF: family forest,

land consolidation forest, investors’ JOF, JOF of relocated Karelians, etc.

• Total area– At the point of establishment:

xxx ha– At present: xxx ha

• Significant events:– xxx

6

1.4 Contact information of XXXX Jointly Owned Forest

Registered hometown:

Location of the forests:

Chairman of the administrative board:

Agent:

Executive director:

Website address:7

1.5 Development outlooks of JOFs

• New jointly owned forests are mainly minor family forests.

• An increasing amount of JOFs have been established by investors.

• Municipalities and parishes are also increasingly interested in JOF partnership.

• Forest owners incorporate their real estates into JOFs in return for shares.

8

2 Administration of a jointly owned forest

• Central decrees:– Act on Jointly Owned Forests

109/2003

– Act on the Formation of Real Estate 554/1995

• According to the Act on Jointly Owned Forests, a jointly owned forest has to have:

– The rules of procedure

– A forest management plan

– An administrative board or an agent chosen by the partnership

– An annual strategy and budget

9

2.1 The administration of XXXX Jointly Owned Forest

• Our jointly owned forest has an administrative board / an agent.

• In our JOF there are:– xxx shareholding real estates– xxx members in the

administrative board – xxx employees

10

11

2.2 Figures on the area of our JOF

Year (edit columns if necessary)

2010 2011 2012 2013 2014 2015

Total area ha

Woodland ha

Wasteland ha

Water areas ha

Environmental aid and Metso stands

ha

Conserved due to own decisions ha

• The turnover of our jointly owned forest is x € per year.

• The value of our share is x €.

• Out of our total income, x % are

forestry earnings.

• Other sources of income: x, y, z…

• We divide a surplus of ca. x € to shareholders each year / every nth year.

12

2.3 The economy of our JOF

2.4 Taxation of JOFs

• As a body corporate, the partnership is a tax-paying entity.

• After taxation, the surplus is shared among the shareholders as tax-free profit.

• Taxation is slightly lighter than in other private ownership forms.

13Photo: Microsoft Office

3 Operation of a jointly owned forest

• Jointly owned forests operate primarily in the field of forestry.

• The forests can also be used for other purposes, provided that it is economically and otherwise reasonable.

• Forests are tended and harvested according to a JOF’s own forest management plan.

• Some of the profit is allocated as surplus; some can be consigned for future demands.

14

15

3.1 The forestry of our JOF

Year (edit columns if necessary)1970 1980 1990 2000 2010 2014

Increment of the growing stock

m3/year

Planned cut m3/year

Of which saw-timber %

Silvicultural work on saplings and young stands

ha/year

Forest regeneration

ha/year

16

3.2 The income of our JOF

Year (edit columns if necessary)

2010 2011 2012 2013 2014 2015Total turnover

€/year

Proceeds from timber sales

€/year

Rental income (hunting)

€/year

Rental income (cottages, lots etc.)

€/year

Other income

€/year

• Our jointly owned forest has purchased xxx ha of land within the last five years.

• New areas totalling xxx ha have been incorporated in return for shares.

• The incorporations have brought xxx new shareholders.

17

3.3 Our expanding JOF

4 Partnership in a jointly owned forest

• Being a forest owner in a JOF is easy and carefree.– The administrative board or the agent is responsible for forest

management and timber trade.

– The model of management is functional and democratic.

• Forests remain unpartitioned as reasonable units.

• The “economy of greatness” works in both timber trade and silviculture.

• The ownership of the property is easily rearranged through the conveyance of shares.

• A JOF offers hunting, fishing, and other recreational opportunities.

• It is also an easy and relatively safe investment opportunity.18

4.1 Concerning the rights of shareholders

• There is no other way to be a shareholder than to own a real estate with shares of a JFO.

• The right to a surplus according to the share ratio

• The right to vote according to the share ratio– Some restrictions to the voting rights exist.

• The Act on Jointly Owned Forests secures equal treatment of shareholders.

• The area of a JOF is jointly managed – there is no right for a single shareholder to independent silvicultural activities. – Allowed activities according to the rules of procedure

• Everyman’s right stands in the area of JOFs, too.

19

• In our jointly owned forest, there is a total of xxx

shareholders.

• The total amount of shares in our JOF is xxx.

• Our JOF partnership has / does

not have a pre-emption right to the separately sold shares.

20

4.2 The shares and shareholders of our JOF

4.3 Incorporating woodland into XXXX Jointly Owned Forest

• A forest owner can dispose land to be incorporated into our JOF in return for shares.

• A possibility to incorporate either parts of land or complete forest holdings

• No tax consequences– Provided that the agreement does not involve financial transfers

• Bilateral incorporation agreement– Requires determining the value of the to-be-incorporated forest area

and the JOF shares

• Incorporating: inexpensive, no handling fee

• The new partner immediately becomes an equal member of the JOF.

• Purchase of property is also negotiable.21

Thank you for your interest!

If you have any inquiries aboutXXXX Jointly Owned Forest,

please contact Name Surname(telephone number, e-mail address)

22