Restructuring a Trading Business with Interlegal
9 July, 2024
26
A Client requested Interlegal to restructure their business. The Client is engaged in international trade of grain and oilseeds, and their group of companies includes entities based in Ukraine, Poland, and the United Kingdom. The Client was considering the option of establishing a holding company for their group.
Initially, the Interlegal team analyzed the possibility of creating a holding company based on one of the Client’s existing foreign companies. The advantages of this option include the absence of costs associated with creating and maintaining a new company. However, we do not recommend mixing holding and operational activities within the parent company, as there is a risk of potential liability of the holding assets due to the current obligations. Given this, Interlegal developed several group structure options for the Client, utilizing a Cypriot holding company.
Special attention was given to international taxation issues when developing the structure options: taxation of income of operational companies in their respective jurisdictions, as well as dividend payments to the holding company and the Client as its owner, and the avoidance of double taxation in such transactions. Since our Client is a resident of Ukraine, the analysis of CFC (Controlled Foreign Company) issues also became an integral part of our work.
Thanks to the comprehensive approach taken by Interlegal Corporate & Taxes specialists, our Client ultimately received an optimal business structure, considering corporate aspects, international taxation issues, and CFC regulations.
Interlegal law team led the project: Junior Lawyer Oleksandra Savelieva, Lawyer Dmytro Bondar, managed by Partner Irina Voyevodina and supported by Partner Artem Skorobogatov.
Interlegal can assist you with restructuring your business group and developing optimal business structures in line with the latest trends in international corporate law and taxation.
