Structuring & restructuring

Common structures and why groups use them

A holding company sits above one or more operating companies. It can hold the shares, receive dividends, and make it easier to bring in investors or sell a single business without disturbing the rest of the group.

Separate operating companies keep each market's contracts, staff, licences and liabilities apart. Banks and regulators in each country deal with a local entity that has a clear purpose.

Some groups hold intellectual property, such as trademarks and software, in a dedicated company that licenses it to operating companies. This needs genuine substance and arm's-length pricing to stand up to tax review, and it is an area where your tax adviser's input is essential.

• Holding company: ownership, investment and exit
• Operating companies: contracts, staff and licences in each market
• IP company: ownership and licensing of brands and technology
• Service company: shared staff or support for the group

Substance and tax come first

Tax authorities look at where decisions are made, where people work and whether each company has a real business purpose. A company with no staff, no premises and no decision-making in its home country may be treated as resident elsewhere, or face economic substance requirements it cannot meet.

Large groups also face the OECD global minimum tax. Under the Pillar Two rules, multinational groups with annual consolidated revenue of EUR 750 million or more are subject to a minimum effective tax rate of 15% in each jurisdiction where they operate. Most owner-managed groups are below that threshold, but local rules on controlled foreign companies, transfer pricing and residence still apply.

We design structures that can be explained plainly to a bank, an auditor and a tax authority. If a proposal only works while nobody looks at it closely, we do not implement it.

Restructuring an existing group

Restructuring means changing what already exists: inserting a holding company, moving subsidiaries, merging companies or closing ones that are no longer needed. The order of steps matters, because share transfers can trigger stamp duty or tax, and banks must be told before ownership changes.

We start with an inventory of every entity, its owners, directors, bank accounts and filing status. Gaps, such as missing registers or late returns, are fixed first so the restructuring starts from a clean record.

One calendar for the whole group

A group of four companies in three jurisdictions can have more than a dozen deadlines a year: annual returns, fees, accounts, tax returns and beneficial ownership updates. Missing one affects the good standing of that entity and can hold up banking for the whole group.

After implementation, every entity sits in the same portal with its documents and deadlines. You see the group on one screen and receive reminders well before each date.

Banking the group

Every entity in a group needs its own bank account, and banks assess each one separately. They want to see the ownership chart up to the individuals at the top, the purpose of each company and the payments expected between group members.

A clear structure memo helps here too. We use it to prepare the banking applications, so the bank sees the same explanation as your tax adviser and auditor. Where a bank asks why an entity exists, the answer is already written down.