Eternity Law International News Business structuring: specifics of commercial organization

Business structuring: specifics of commercial organization

Published:
September 20, 2022

Considering largest enterprises in the CIS and the European space, it can be revealed that the majority of them are owned by foreign investors. Simultaneously, bulk of such organizations are located in Luxembourg, Holland, Switzerland, and also in Cyprus. This means that for certain reasons, at some stages of fulfilling commercial activities, the owners of large enterprises change business structuring and create holding – model that combines management chains into one general structure.

What is alternative business structure: holding concept

Holding is a type of business structure – vertical consolidation of legal entities that includes a maternal enterprise and subsidiaries. Maternal organization controls subsidiaries operation and controls their shares. The holding is usually not engaged in trade, services or production. The main task of the holding structure is assets ownership and management. But in certain European countries, it is possible to combine the work of the holding and trading purposes, however, from the point of view of security and asset protection, this direction of mercantil implementation isn’t recommended.

Purpose of merging firms into a single holding

The main tasks of holding business structuring are:

  • profits accumulation in state with smallest taxes;
  • possession of corporate rights of other enterprises, real estate, valuable documents;
  • firms’ protection company from external encroachments;
  • high level of investor security;
  • financing of the constituent parts of the holding;
  • owning intellectual rights and receiving royalties;
  • reduction of tax rates when selling part of the business to other investors;
  • taking loans and raising money outside jurisdiction to invest in similar projects;
  • organization of a unified management system.

Holding location

When choosing jurisdiction where holding organization will be registered, it is necessary to take into account the tax treaties that exist in the countries. The choice of most profitable international treaty is called the purchase of treaties.

It is important that there’s simply no better jurisdiction for business processes. But, by analyzing firm’s goals, you can select most suitable place to set a holding. Often, European states are perfectly suited for holdings. Now most often holdings are registered in Holland, Switzerland, Luxembourg, Liechtenstein and Denmark. Virtually all of these states possess strong protective laws and stable banking system.

Structured business to protect assets

Holding basis is a special trust mechanism, organized in a state with well-developed protective laws. The rule of connection of jurisdictions is the main law of commercial consolidation. Legal support during holding creation consists of many steps.

  1. At the start, a legal analysis of the current position of the group, identification and resistance to risks is carried out.
  2. Next, the company’s specialists create a strategy for corporate ownership, management, commodity-financial flows and the economy.
  3. Then you need to create a business plan.

Before changing structure of business, it’s important to evidently think through the goals and identify all the tasks. This will enable you and the specialists of our firm to properly structure the holding.

Before planning the process, it is important to understand what kind of structure you want, what types of activities will generate profit, what you will focus on in your work, who will be the owner of the holding, etc. Analysis of the current situation is the main step in commercial planning.

If you intend to buy a business, contact us for thorough advice on structuring. Our company always takes into account the rules of combining jurisdictions, choosing only the best from each country. We will help to make a step-by-step restructuring of firm and establish strong holding. Our experts prepare a legal opinion; it’ll indicate the ownership model and management structure of commercial projects. Activities list needed to create a holding will have a schedule and a phased plan for their implementation. In addition, we are also ready to offer you many options for ready-made companies for sale.

You can see our current offers in the categories “Cryptocoins and licensing of cryptocurrency operations”, “Ready-made companies”, “Banks for sale” and “Licenses for sale”.

You could be interested

Registration of a company in Poland

Poland has been a favorable market for foreign businesspersons who appreciate the country’s openness, geographic location, and well-educated and highly skilled employment market.  Accordingly, company registration in Poland is an excellent option to discover many commercial opportunities and take advantage of both low labor costs and attractive corporate taxation rates. Below is a brief overview of the...

Doing business for Ukrainians in the Czech Republic

Today a lot of Ukrainians would like to launch their own business, especially abroad. Among countries of the European Union, the Czech Republic is one of the best choices. This article will outline the main requirements for opening a business in the Czech Republic. There are several types of businesses there. The most typical are...

Open a bank account in Malta

There is plenty of reasons to open a bank account outside his home country. That can be a desire to wide business, enter new markets or find new partners abroad. The safety and reliability of the bank are the main points in bank choosing. Other important conditions are terms and low requirements. In this article,...

How to Establish a Cyprus-Based Forex Business?

The EU prohibits the operation of forex firms that are not subject to its regulation. However, many EU nations have a strident anti-market stance and impose high tax regimes, as well as raising the fees and restrictions for running a financial firm or acquiring a permit for a forex agency. Cyprus, however, has decided to...

Corporate taxes in Serbia

The taxation regime of Serbia is very appropriate for business because it is among the countries situated in Europe with the lowest rates of taxation. Subjects of Taxation Citizens of Serbia must pay taxes on their international earnings. Corporations with their headquarters in Serbia or whose administration and supervision are located there, too. Foreign businesses...

Reorganization of enterprises

One way to start a new business is to reorganize the business. A new business entity can be created not only from scratch, but also by transforming existing companies. There are several ways of reorganization as a result of which new enterprises appear, namely: merger of firms; connection of one legal entity with another; selection;...
Fill the blank:

Zurich

Dreikonigstrasse, 31A, Stockerhof

Kyiv

Baseina street, 7

London

Grosvenor Gardens, 52

New York

1178 Broadway, 3rd Floor #3353 New York, NY 10001

Vilnius

Gediminas Avenue, 44A

Tallinn

Kesklinna linnaosa, Tuukri 19

Edinburgh

Lochrin Square, 1

Nicosia

Jacovides Tower, 5 floor

Riga

Esplanade, 7 floor

Hong Kong

18 Harbour Road, 35/F, Central Plaza, Wanchai

Singapore

Level 42, Suntec Tower Three, 8 Temasek Boulevard

Sydney

20 Martin Place

Porto

2609 Avenida da Boavista

Tbilisi

Revaz Tabukashvili Str., N 45, area N 7