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Business Restructuring. Setting up Holding Companies

Business Restructuring. Setting up Holding Companies

Korpus Prava provides a full spectrum of services on business structure optimisation, restructuring or structuring of Holding Companies on the basis of an existing company or a group of companies. Business restructuring provides effective distribution and usage of all company resources. As a rule, restructuring works result in setting up a structured holding company on the basis of an already active company or a group of companies.

A holding company is an effective instrument for owning and managing different types of assets, as it represents a group of companies that are related due to their equity participation, centralized management and close business relationships. The holding company may include any company, whose activities are determined by the owner.

The functions of the companies (members of the holding company) are also determined during the process of restructuring depending on the goals that the owner is striving to reach.

The goals of business restructuring and setting up holding companies:

  • Forming owner’s involvement in the group of companies and ensuring their ownership rights;
  • Centralisation of company management tools;
  • Increasing company transparency;
  • Protection of company’s most significant assets;
  • Reducing tax and property risks;
  • Optimisation of company’s tax burden;
  • Cost reduction.

Korpus Prava supports the restructuring and structuring of holding companies and takes into consideration every goal. The process of restructuring starts with due diligence during which tax and property risks are assessed. We offer various options of business restructuring (structuring of a holding company) based on due diligence results.

While developing different options for setting up a holding company, we pay particular attention to the following issues:

  • Choosing a place to incorporate a parent company;
  • Identification of profit centers andtransfering company earnings to a low tax jurisdiction;
  • Separating assets from operational activites.
  • Risk assessment for a transition period (risks that may arise during the process of business restructuring);
  • Evaluation of tax and property risks of business operations that will be performed by a new holding company.

Final Stage of Business Restructuring

Upon completion of the investigation, a client is offered several restructuring proposals (structuring of a holding company); our specialists calculate the alteration to a company’s tax burden after its restructuring and develop a financial model for a new holding company.

The final stage in business restructuring (structuring of a holding company) consists of:

  • Establishing a holding company structure approved by the client (registration procedures);
  • Developing an internal document flow within a holding company;
  • Designing documents to be used in business operations with third parties.