Tax and legal advice on setting up a holding structure

Tax and legal advice on setting up a holding structure 

The growth of assets and the size of the firm, the differentiation of business lines and, last but not least, the need for generational change, may all call for restructuring. A group of companies directly owned by private individuals is not the most favourable structure for expansion and growth either for the security of assets or from a tax point of view.  

However, in addition to asset protection and tax benefits, a well-designed holding structure offers a number of advantages, such as the simplification of corporate governance processes and the restructuring of the group in a way that prepares it for the acquisition or sale of a business line and for the development of employee incentive schemes.

The holding structure, to a certain extent, can also help family members to regulate some of the issues related to the long-term management of family assets.  In this context, it is important to point out, however, that in order to create a truly tailor-made structure that deals with matrimonial property and succession issues in a sophisticated way, it is also advisable to use other legal instruments (such as fiduciary trusts) in addition to the holding structure. 

RSM’s advisory services pertaining to restructuring and setting up the holding structure

Our colleagues specialised in corporate (re)structuring, group structure planning and holding companies are professionals with extensive experience, who provide high-quality and complex support not only in the design of the optimal holding structure from a tax and legal point of view, but also in its establishment and operation. 

Our experts provide the following due diligence and advisory services in the design of the group and holding structure:

• Mapping the current company structure and typical operational risks, including asset protection aspects; 
• Identifying the current ownership structure and analysing ownership objectives (in the case of family businesses, assessment of the marital/spousal property and succession relations between the family members involved in the operation, taking into account the possibility of generational change, sale of the company or involvement of external management); 
• Identifying the risks arising from independent company management and recommendations on risk management; 
• Examining the terms of membership agreements between owners and syndicate contracts;
• Proposing an optimal company structure to achieve medium and long-term objectives (if necessary, presenting the benefits of a fiduciary trust together with the holding structure); 
• Designing the process of restructuring the company to ensure optimal transition, efficient operation and to create a favourable tax and legal environment for a possible later exit, taking into account both the short- and longer-term objectives of the owners;
• Planning the optimal financing of the company structure to be set up; 
• Examining the potential use of alternative taxation methods;
• Transfer pricing advisory: reviewing the compliance of intra-group transactions, services, contractual relationships, accounting and transfer pricing practices;
• Valuation of the company 
• Review of the legal implications of the supply of goods or services under the VAT Act in relation to the assets to be transferred by succession;
• Analysing the option of group taxation;
• Review of the property transfer tax aspects at companies that own real property;
• Advice on notified shares obtained or created in the context of the restructuring;
• Planning employee incentive schemes and the remuneration of key employees;
• Examining any prior consents required for the restructuring (e.g. applicability of "change of control" provisions laid down by public authorities, financiers, investors, contractual partners). 

In the course of restructuring in line with the ownership decisions made during the planning phase, implementing the proposed changes and maintaining the ongoing operation, our experts will carry out the following:

• Company formations (holding companies, asset management companies, operative companies) or (voluntary) dissolutions, as required; 
• Execution of intra-group transactions and corporate changes required for restructuring (e.g. changes in members, transfer of contributions) and other relevant tasks (e.g. creation of shares); 
• Legal, tax and accounting management of transformations (mergers, amalgamations, spin-offs, separation) and changes of legal form, management of employment successions, recording changes in registers other than the company register (e.g. transfers to the land register, intellectual property registers);
• Settling relations between owners, drafting syndicate agreements; 
• Incorporation of ownership control (detailed regulation of the powers of the supreme body and of the management, and the determination of the decision-making powers of the authorised representatives);
• Supporting the introduction of employee incentive schemes; 
• Transfer pricing advisory;
• Company valuation services
• Drafting intra-group contracts (e.g. loan agreements, lease agreements, licence contracts, centralised service and procurement contracts, administrative and cost sharing agreements, management services for active holdings, etc.);
• Preparing and negotiating business transfer agreements, providing full legal and tax support for their implementation;
• Overall support for the sale of the company;
• Family estate and wealth planning in relation to restructuring;
• Managing tax and accounting issues arising from the operation of a group of companies;
• Bookkeeping and tax filing services for the group;
• Exit planning.