Le operazioni di acquisizione (M&A) in Italia: share deal o asset deal

25 Settembre 2019

  • Italia
  • Diritto societario
  • M&A
  • Private equity

Belgian residents working abroad, e.g. in Luxembourg, may have a company car registered in their country of employment. The Belgian regional tax administrations exercise checks to verify whether the user of the company car complies with regional vehicle tax rules allowing an exemption from registration of the car in Belgium and from Belgian vehicle taxes. Especially in the Walloon Region this has given rise to a lot of litigation in recent years, especially regarding Luxembourg workers residing in Belgium.

Belgian vehicle registration rules stipulate that the user of the car must have on board of the car a copy of his employment contract as well as a document drawn up by the foreign employer showing that the latter had put the vehicle at the employee’s disposal. If the driver cannot produce these documents, he is supposed by the Walloon tax administration to have violated the legal obligation to register the car in Belgium and to pay Belgian vehicle taxes.

The consequences are severe. In addition to the vehicle taxes, the driver must pay a hefty fine. Failing to pay these large amounts (often more than EUR 3,000.-) on site at the time of the road check, the authorities withhold the on-board documents of the car, which results in the immobilization of the car.

The Walloon tax administration, initially, did not pay back the vehicle taxes even if it was proven afterwards that the conditions of the exemptions of registration in Belgium and Belgian vehicle taxes were met. At first, the tax administration claimed that the vehicle taxes remained due if the employee showed the required documents only afterwards to the competent authorities. The position of the Walloon tax administration was that the employee must be able to produce the required documents on the spot during the check to be exempted from registration and vehicle taxes in Belgium.

In a recent reasoned order, the European Court of Justice (‘ECJ’) confirmed that this harsh position by the Walloon tax administration was in violation of the freedom of movement for workers. A reasoned order is issued by the ECJ a.o. where a question referred to the ECJ for a preliminary ruling is identical to a question on which the ECJ has previously ruled or where the answer to the question referred for a preliminary ruling admits of no reasonable doubt.

In other words, the ECJ confirms that the requirement to have the abovementioned documents permanently on board of the vehicle to be exempted from Belgian registration and Belgian vehicle taxes is manifestly disproportionate and thus a violation of the freedom of movement for workers.

From a practical perspective, this ruling confirms that an employee resident in Belgium but working in another member state does not have to pay the Belgian vehicle taxes (or is entitled to be paid back) if he demonstrates after the check that he met the conditions to be exempted from registration and vehicle taxes in Belgium.

The legal form of a GmbH (limited liability company) is very popular in Germany and is also one of the most frequently chosen forms of market entry for foreign investors. Its establishment is relatively simple and quick, the GmbH offers shareholders the desired limitation of liability and enjoys a high reputation in business relations, both in Germany and abroad. The statutory minimum share capital of 25,000 euros documents a certain seriousness and is intended to protect creditors.

However, the opening of a German bank account to which the shareholders are to pay their capital contributions is usually a factual problem when setting up a GmbH; the capital stock must be provided before the company is registered in the German commercial register. On the one hand, it is not uncommon for German financial institutions to refuse to open accounts to foreign shareholders per se. On the other hand, it is almost standard today that the opening of a bank account for a new company in which foreign shareholders are to hold shares can take several weeks for various internal bank reasons. In practice, this means that the entry of the company in the commercial register can be suspended for several weeks or even months. Valuable time is lost, especially if you are about to start a project in Germany and everything is already prepared.

Do you have to accept this unnecessary delay? No, not at all.

There is a much faster and more acceptable way.

A bank account is not required for the establishment of a GmbH. The German corporate law does not provide for this either. In practice, however, it has become common to open an account directly when a company is established. Of course, this only makes sense if the account is opened quickly and immediately. If, however, it is foreseeable in advance that there might be problems opening an account with a German bank, a different procedure is recommended.

The managing director of the newly established GmbH (he is usually already appointed during the notarial establishment of the company) has to assure in the registration of the new company to the commercial register that the capital contributions are in the free and unrestricted disposal of the management. The law does not stipulate that this can only take place if the payment is made to a bank account of the GmbH. It is also possible and permissible for the managing director to opens a company cash box (cash register) in which the shareholders hand over the capital contributions in cash and the managing director notes the payment in the cash book. A copy of the cash book or a confirmation of the managing director can be handed over to the notary as proof of the payment, who then also forwards this copy to the commercial register.

In the incorporation practice and experience of the author, this procedure has so far been accepted by the commercial registers without objection. All GmbHs founded in this way were successfully registered.

The author of this post is Dominik Wagner.

Le operazioni di acquisizione (M&A) in Italia, nella maggior parte dei casi, vengono realizzate attraverso acquisto di partecipazioni (‘share deal’) o di azienda o ramo d’azienda (‘asset deal’). Per ragioni principalmente fiscali sono più frequenti gli share deal rispetto agli asset deal, nonostante l’asset deal consenta una migliore limitazione dei rischi per l’acquirente. Vedremo le principali differenze tra share deal e asset deal in termini di rischi e di rapporti tra venditore e acquirente.

Preferenza per operazioni di M&A mediante acquisto di partecipazioni (‘share deal’) rispetto ad acquisto di azienda o ramo d’azienda (‘asset deal’) nel mercato italiano

In Italia, le operazione di acquisizione (M&A) vengono realizzate, nella maggior parte dei casi, attraverso acquisto di partecipazioni (‘share deal’) o di azienda o ramo d’azienda (‘asset deal’). Altre modalità, come la fusione, sono meno frequenti.

Con l’acquisto di quote o azioni della società acquisita (‘share deal’) l’acquirente acquisisce, indirettamente, l’intero patrimonio aziendale (attività, passività, rapporti) e quindi si fa carico di tutti i rischi relativi alla precedente gestione della società.

Con l’acquisto dell’azienda o di un ramo d’azienda (‘asset deal’) l’acquirente acquisisce un insieme di beni e rapporti organizzati per l’esercizio dell’impresa (immobili, impianti, dipendenti, contratti, crediti, debiti, ecc.). Il vantaggio dell’asset deal risiede nella possibilità per le parti di definire il perimetro del trasferimento e, quindi, per l’acquirente, di limitare i rischi legali dell’operazione.

Nonostante questo vantaggio, la maggior parte delle operazioni di acquisizione in Italia avviene attraverso acquisto di partecipazioni. Nel 2018 gli acquisti di partecipazioni (azioni o quote) sono state circa 78.400, mentre le cessioni di azienda sono state circa 35.900 (fonte: www.notariato.it/it/news/dati-statistici-notarili-anno-2018). E va osservato che il dato delle cessioni d’azienda comprende anche le aziende di piccole o piccolissime dimensioni esercitate da imprenditori individuali, per le quali l’alternativa dello share deal (pur praticabile, attraverso il conferimento dell’azienda in una newco e la cessione delle partecipazioni nella newco) non è percorribile in concreto per ragioni di costo.

Costi fiscali delle operazioni di acquisizione (M&A) in Italia

La principale ragione della preferenza per l’acquisto di partecipazione (‘share deal’) rispetto all’acquisto di azienda (‘asset deal’) risiede nei costi fiscali dell’operazione. Vediamo quali sono, in linea generale.

Nell’acquisto di partecipazioni, le imposte dirette a carico del venditore vengono calcolate sulla plusvalenza, secondo le seguenti percentuali:

  • se il venditore è una società di capitali (s.p.a.; s.r.l.; s.a.p.a.) l’aliquota è del 24% della plusvalenza. Ma, a determinate condizioni, si applica il regime della c.d. PEX (participation exemption) con applicazione dell’aliquota del 24% solo sul 5% della plusvalenza.
  • Se il venditore è una persona fisica l’aliquota sulla plusvalenza è del 26%.
  • Se il venditore è una società di persone (s.s.; s.n.c..; s.a.s.) la plusvalenza è integralmente imponibile, tuttavia al ricorrere di determinate condizioni, l’imponibilità è limitata al 60% dell’ammontare della plusvalenza. In entrambi i casi l’aliquota applicabile è quella marginale riferita a ciascun socio a cui il reddito viene imputato per trasparenza.

Nell’acquisto di partecipazioni si applica l’imposta di registro, normalmente a carico dell’acquirente, di euro 200.

Anche nell’acquisto di azienda, le imposte dirette a carico del venditore vengono calcolate sulla plusvalenza. Se il venditore è una società di capitali, l’aliquota è del 24% della plusvalenza. Se il venditore è una società di persone (con soci persone fisiche) o un imprenditore individuale, le aliquote dipendono dal reddito del venditore.

Nell’acquisto di azienda si applicano le imposte indirette, normalmente a carico dell’acquirente, calcolate sulla parte del prezzo attribuibile ai singoli beni trasferiti. Il prezzo è il risultato delle attività trasferite detratte le passività trasferite. Le percentuali sono diverse a seconda del tipo di beni. In generale:

  • ai beni mobili si applica una imposta di registro del 3%;
  • all’avviamento si applica una imposta di registro del 3%;
  • ai fabbricati si applica una imposta di registro del 9% (e imposte ipotecarie e catastali in misura fissa di euro 50 ciascuna);
  • ai terreni si applica una imposta di registro tra il 9 e il 12% (a seconda dell’acquirente) e imposte ipotecarie e catastali in misura fissa di euro 50 ciascuna.

Nel caso in cui l’azienda sia composta da beni soggetti ad aliquote diverse e le parti abbiano pattuito un corrispettivo unico, senza distinzione in merito al valore attribuibile ai singoli beni, l’imposta deve calcolarsi applicando all’unico corrispettivo pattuito l’aliquota più elevata.

Va sottolineato che l’Agenzia delle Entrate può sottoporre ad accertamento il valore attribuito dalle parti ai beni immobili e all’avviamento, con conseguente rischio di applicazione di maggiori imposte.

Share deal e asset deal: rischi e responsabilità verso i terzi

Nell’acquisto di quote o azioni (‘share deal’) l’acquirente si fa carico, indirettamente, di tutti i rischi relativi alla precedente gestione della società.

Nell’acquisto dell’azienda o di un ramo d’azienda (‘asset deal’), invece, le parti possono decidere il perimetro del trasferimento (quali beni e rapporti) così stabilendo, nei rapporti tra loro, i rischi che l’acquirente assume.

Vi sono però alcune norme, che le parti non possono derogare, relative ai rapporti con i terzi, che influiscono significativamente sui rischi per il venditore e l’acquirente e quindi sulla negoziazione dell’accordo tra le parti. Le principali sono le seguenti.

  • Lavoratori dipendenti: il rapporto di lavoro continua con l’acquirente dell’azienda. Il venditore e l’acquirente sono obbligati in solido per tutti i crediti del lavoratore al momento del trasferimento (art. 2112 c.c.).
  • Debiti: il venditore è obbligato al pagamento di tutti i debiti sino alla data del trasferimento. L’acquirente è obbligato per i debiti che risultano dai libri contabili (art. 2560 c.c.).
  • Debiti e responsabilità fiscali: il venditore è obbligato al pagamento di debiti, imposte e sanzioni fiscali relative al periodo sino alla data del trasferimento.
    L’acquirente, in aggiunta all’obbligo relativo ai debiti fiscali che risultano dai libri contabili (art. 2560 c.c.), è responsabile per le imposte e sanzioni, anche se non risultano dai libri contabili, con i seguenti limiti (art. 14 D.lgs. 472/1997):
  • beneficio della preventiva escussione del venditore;
  • fino al valore dell’azienda o del ramo d’azienda acquistato;
  • per le imposte e sanzioni non ancora contestate, la responsabilità riguarda solo quelle relative all’anno della vendita dell’azienda e ai due precedenti; per le imposte e sanzioni relative al periodo anteriore ai due anni precedenti la vendita dell’azienda, la responsabilità riguarda solo quelle contestate entro tale periodo;
  • nei limiti del debito risultante alla data di trasferimento dagli atti degli uffici dell’amministrazione finanziaria. L’Agenzia delle Entrate è tenuta a rilasciare un certificato sull’esistenza di contestazioni in corso e sui debiti. Il certificato negativo, o non rilasciato entro 40 giorni dalla richiesta, libera l’acquirente da responsabilità.
  • Contratti: le parti possono scegliere quali contratti trasferire. Rispetto ai contratti trasferiti, l’acquirente subentra, anche senza il consenso del terzo contraente, nei contratti per l’esercizio dell’azienda che non hanno carattere personale (sono a carattere personale quelli che prevedono da parte del venditore una prestazione oggettivamente infungibile o soggettivamente infungibile). Inoltre il terzo contraente può recedere dal contratto entro tre mesi, se sussiste una giusta causa (ad esempio se l’acquirente non garantisce, per la propria situazione patrimoniale o per capacità tecniche, di poter adempiere al contratto) (art. 2558 c.c.).

Alcuni strumenti per affrontare i rischi

Per affrontare i rischi derivanti dalle responsabilità verso i terzi e i rischi generali connessi all’acquisizione, vi sono diversi strumenti negoziali e contrattuali che possono essere utilizzati. Vediamone alcuni.

Nelle operazioni di acquisto dell’azienda o di rami d’azienda (‘asset deal’):

  • Lavoratori dipendenti: è possibile concordare con il lavoratore modifiche alle condizioni contrattuali e rinunce alla responsabilità solidale dell’acquirente e del venditore (ex art. 2112 c.c.). L’accordo con i lavoratore per essere valido deve essere concluso in sede ‘protetta’ (ad esempio: con l’assistenza delle organizzazioni sindacali).
  • Debiti:
  • trasferire all’acquirente i debiti riducendo il prezzo in misura corrispondente; la riduzione del prezzo comporta, inoltre, una minor costo fiscale dell’operazione. In caso di trasferimento dei debiti, per tutelare il venditore si può ottenere dal creditore una dichiarazione di liberazione del venditore dalla responsabilità ex art. 2560 c.c.; oppure si può prevedere che il pagamento del debito da parte dell’acquirente avvenga contestualmente al trasferimento dell’azienda (‘closing’).
  • Per i debiti non trasferiti all’acquirente, ottenere dal creditore una dichiarazione di liberazione dell’acquirente dalla responsabilità ex art. 2560 c.c.
  • Per i debiti per i quali non sia possibile ottenere la dichiarazione di liberazione da parte del creditore, pattuire forme di garanzia a favore del venditore (per i debiti trasferiti) o a favore dell’acquirente (per i debiti non trasferiti), quali ad esempio la dilazione del pagamento (a favore dell’acquirente) di parte del prezzo, il deposito fiduciario (‘escrow’) di parte del prezzo, fideiussioni bancarie o da parte dei soci.
  • Debiti e responsabilità fiscali:
  • ottenere dall’Agenzia delle Entrate il certificato ex art. 14 D.lgs. 472/1997 sui debiti e le contestazioni in corso;
  • trasferire all’acquirente i debiti riducendo il prezzo in misura corrispondente;
  • pattuire le forme di garanzia a favore del venditore (per i debiti trasferiti) e a favore dell’acquirente (per i debiti non trasferiti o per le contestazioni che non sono ancora debiti), quali ad esempio quelle sopra esposte per i debiti in generale.
  • Contratti: per quelli che vengono trasferiti:
  • verificare che le prestazioni a carico del venditore sino alla data del trasferimento siano state regolarmente adempiute, per evitare il rischio di contestazioni del terzo contraente che possono bloccare l’esecuzione del contratto;
  • almeno per i contratti più importanti (e salvo ragioni di riservatezza), cercare di ottenere conferma dal terzo contraente del benestare al trasferimento del contratto.

Nelle operazioni di acquisto di partecipazioni (‘share deal’), in cui l’acquirente si fa carico, indirettamente, di tutti i rischi relativi alla precedente gestione della società, alcuni strumenti sono:

  • Due diligence. Svolgere una approfondita due diligence legale, fiscale e contabile sulla società, per valutare preventivamente i rischi e gestirli nella trattativa e nei contratti.
  • Dichiarazioni e garanzie (‘R&W’) e indennizzo. Prevedere nel contratto di acquisizione (‘share purchase agreement’) un set dettagliato di dichiarazioni e garanzie – e obblighi di indennizzo in caso di non conformità – a carico del venditore relativamente alla situazione della società (‘business warranties’: bilancio; situazione patrimoniale di riferimento; contratti; contenzioso; rispetto della normativa ambientale; autorizzazioni per lo svolgimento dell’attività; debiti; crediti ecc.). La trattativa sulle dichiarazioni e garanzie normalmente recepisce, gestendoli, gli esiti della due diligence (ad esempio: viene escluso dalle dichiarazioni e garanzie e dall’indennizzo un contenzioso emerso in due diligence, del quale le parti tengono conto nella definizione del prezzo). La pattuizione di dichiarazioni e garanzie sulla situazione della società (‘business warranties’) e dell’obbligo di indennizzo sono necessari negli share deal in Italia, in quanto in mancanza di tali clausole l’acquirente non può ottenere dal venditore (salvo situazioni estreme e molto rare) un risarcimento o indennizzo in caso la situazione della società sia diversa da quella considerata al momento dell’acquisto (così ad esempio: Cass. Civ. 16963/2014).
  • Garanzie per l’acquirente. Strumenti per garantire all’acquirente l’effettiva possibilità di ottenere l’indennizzo (o parte dell’indennizzo) in caso di non conformità delle dichiarazioni e garanzie. Tra queste: (a) la dilazione del pagamento di parte del prezzo; (b) il versamento di parte del prezzo in un deposito fiduciario (‘escrow’) per la durata delle dichiarazioni e garanzie e, in caso di contestazioni, fino a che la contestazione non è definita; (c) fideiussione bancaria;; (d) polizza W&I, contratto di assicurazione che copre il rischio dell’acquirente in caso di violazioni di dichiarazioni e garanzie, sino ad un importo massimo (ed esclusi alcuni rischi).

Altri fattori che incidono sulla scelta tra share deal e asset deal

Naturalmente la scelta di realizzare un’operazione di acquisizione in Italia mediante share deal o asset deal, dipende anche da altri fattori oltre a quello dei costi fiscali dell’operazione. Eccone alcuni.

  • Acquisto di parte del business. Si sceglie l’asset deal, quando l’operazione non riguarda l’acquisto dell’intera azienda del venditore ma solo una sua parte (un ramo d’azienda).
  • Situazione della società problematica. Si sceglie l’asset deal quando la situazione della società target è così problematica che l’acquirente non è disponibile ad assumere tutti i rischi derivanti dalla precedente gestione, ma solo parte di essi.
  • Mantenimento di un ruolo da parte del venditore. Si sceglie lo share deal quando si vuole conservare al venditore un ruolo nella società acquisita. In questo caso, oltre ad un ruolo nel management, è frequente il mantenimento da parte del venditore di una partecipazione di minoranza, con clausole di exit (diritti di put e call) decorso un certo periodo di tempo. Clausole che, spesso, legano il prezzo ai risultati futuri e, quindi, nell’interesse dell’acquirente incentivano il venditore nel ruolo manageriale e, nell’interesse del venditore, valorizzano prospettive reddituali non concretizzate al momento dell’acquisto.

A legal due diligence of a Brazilian target company should analyze the existence and the content of Agency Agreements, including values paid to the agent and the nature of such payments and the factual situation of the target’s agents, in order to evaluate potential contingencies.

One usual suspect in legal due diligences of Brazilian target companies in M&A transactions that should not be overlooked is the existence of agency agreements, due to:

  • the obligation to indemnify the agent stipulated by law: at least 1/12th of all commissions paid throughout the entire term of the agency agreement; and
  • the risks for the agency being disregarded and considered as an employment relationship, subjecting the principal to compensate the agent as an employee with all rights, benefits, taxes and social contributions.

This should be considered for evaluation of potential contingencies and the impacts on the valuation of the target.

No doubt that agents can be an important component of the sales force of the business and can be strategic for the activity of the principal, in view of a certain independence and for not increasing the payroll of a company.

On the other hand, under Brazilian laws, the protective nature of the agency demands the principal a considerable level of attention.

Indemnification

Brazilian Federal Law No. 4,886/65 as amended – the Brazilian Agency Law – determines that the agent is entitled to, at the termination of an agency agreement, receive an indemnification of 1/12th calculated over all the commissions paid throughout the duration of the entire period of the agency agreement.

The Brazilian Agency Law stipulates that if the parties sign a new contract within 6 months after the expiration of the previous, the relation between agent and principal shall be deemed as the same relationship and thus, the duration to calculate the indemnification shall encompass the entire period (past and subsequent contract).

Termination by the agent

The Brazilian Agency Law also stipulates situations that agent could terminate the contract and still be entitled to receive the 1/12th indemnification:

  • reduction of the activities in disagreement with the contractual stipulation
  • breach of exclusivity (territory and/or products), if so stipulated in the agreement
  • determination of prices that makes the agency unfeasible and
  • default on payment of the commissions
  • force majeure

Termination without cause

Termination without cause can be done, upon payment to agent of the indemnification and with a previous notice of at least 30 days, in which situation the agent shall receive the payment of 1/3 of the remuneration received during the previous 90 days prior to the termination.

Can principal avoid the indemnification?

The only cases where the 1/12th indemnification would not be applicable are when the contract is terminated by principal with cause. The Brazilian Agency Law has limited situations for principal to terminate the contract with cause:

  • acts by agent causing disrepute of the principal
  • breach of obligations related to the agency activities
  • criminal conviction related to honor, reputation

These situations shall be clearly demonstrated. Producing the sufficiently strong evidence of the facts to configure cause for termination may not be an easy task, considering some of the facts may be subject to construing and interpreting by the parties, witnesses and ultimately the judge.

As a result, from past experiences, it is rare to see principals in conditions not to incur in the 1/12th indemnification.

Potential risk: configuring employment relationship

In addition to the indemnification, the activities developed by the agent could eventually be deemed as performed by a regular employee of the principal and, in this case, principal could be subject to compensate the agent as an employee.

Agent vs. employee

For the appreciation of the employment relationship, the individual acting as agent shall file a labor claim and demonstrate the existence of the employment relationship.

The Labor Court judge will consider the factual situation, prevailing upon the written agreements or other formal documents. The judge may rely on e-mails, witnesses and other evidence.

The elements of an employment relationship are:

  • Individual: in case the individual acts by himself to perform the services; Personal services: the services are in fact performed by the individual specifically to the Principal;;
  • Non-eventuality – exclusivity: the services are rendered in a regular basis;
  • Subordination: key factor – the individual has to follow strict instructions directed by principal, such as reporting to an employee of the principal, determined visits;
  • Rewarding – fixed remuneration: the individual is awarded regular amounts and expenses allowances

In the event the individual can demonstrate the existence of the elements to configure an employment relationship, he/she could have an award to entitle him/her to have his remuneration considered as of a regular employee for the last 5 years.

As a result, the individual would be awarded the payment of Christmas bonus (equivalent to 1 monthly remuneration per year), vacation allowance (1/3 of a monthly remuneration per year), unemployment guarantee fund (1 monthly remuneration per year) plus other benefits that he/she would be given as an employee of principal (based on the collective bargaining agreement between the employees’ and employers’ unions). The company would also be obliged to make the payment of the co-related social security contributions.

Needless to say, the result could turn into a considerable potential contingency.

The author of this article is Paulo Yamaguchi

The sale and purchase of agricultural land under Polish law have been recurrently amended over the past few years.

For the most part legal provisions aim to protect the country’s food resources as well as to be self-sustained and independent from foreign food suppliers. Agriculture is considered to be one of the decisive economic branches and it’s the Lawmaker’s according belief that it should be accurately regulated. Consequently, the sale and purchase of land which may be used for farming are subject to various limitations, as well as the sale and purchase of company shares or business assets (fonds de commerce) holding such land.

This topic, therefore, is crucial to foreign investors. In this article, I would like to highlight some key points which should be taken into account by foreign investors in setting up a joint venture with a Polish counterpart owning a real estate or acquiring shares in an already existing entity that owns a real estate. These situations are very frequent and the legal risks related to the agricultural land cannot be neglected.

Agricultural land is defined as any land which is qualified as such in the zoning regulation. The agricultural character subsists not only when the real estate is already utilized for agricultural purposes but also if such use is merely potential. Here arises the first issue: it is a matter of facts, not law whether such utilization is conceivable and often arguable.

One may imagine a plot of land which is not used for farming at the moment but still suitable to be used in such a way in the future. Such a real estate will be subject to the legal limitations and the sale and purchase of it offer a significant legal and commercial issue. This pertains green fields in the outskirts of a city which are generally marked as agricultural land under the zoning plan and form an ideal target for investors who wish to construct a production facility (e.g. factory), warehouse or start a business far from farming. Except if planning the construction of residential buildings they will have to face severe legal requirements.

Another point is that in Poland not every region has a zoning plan. Often there is none and the legal character of a given land has to be determined on the basis of other sources; such as a land register or a general concept of zoning plan adopted by a single municipality. Oftentimes the data arising from the two sources are contradictory.

Issue concerns only out of city real estate

The upside is that these strict regulations do not apply to agricultural land situated within the administrative city limits.

Minimum surface: 1 ha and 5 ha

The statutory limitations apply only in case if the land exceeds a certain surface.

For share deals (transactions where the shares in a company or rights in a partnership are transferred) the minimum surface required is 5 ha. If a company or a partnership owns an agricultural land below 5 ha the share deal can be done without further complications.

For asset deals (simple transactions resulting in a transfer of land property) the relevant figure is 1 ha (see below).

Transfer of land

The transfer of agricultural land having a surface exceeding 1 ha to a non-farmer, requires the approval of the State. This is given through an administrative decision.

If the surface is less than 1 ha, transfer approval is not mandatory, but the State has a right of first refusal with respect to such land. As mentioned earlier, these rules do not apply to the real estate situated within the cities.

For these reasons an asset deal in Poland may produce complications.

Transfer of shares in a capital company

The share deals are comparatively easier, even if the company owns an agricultural real estate. They do not require the approval of the State.

However, the State has a right of first refusal with respect to shares in a company (limited liability company or joint stock company) which owns an agricultural land having a surface of at least 5 ha. It has a right to examine the company’s papers and books as well as to request data from the company in order to establish the legal and financial state of the real estate.

The shares owner can only enter into a conditional share sale and purchase agreement with a third party. Such an agreement is conditioned by the mentioned right to a first refusal within a statutory time period of 1 (one) month. However, there is a very important deviation from the regular right of first refusal. If the State considers the contractual price does not meet the market value of the shares it may demand that the share price which the State itself will pay is set by a court. Such price revision does not extend to regular share deals or asset deals. And therein we see the significant risk for the seller.

Transfer of shares in a partnership and accession of a new member

Different rules apply if the sale and purchase agreements relating to the rights in a partnership (general partnership, limited partnership, a partnership limited by shares or professional partnership) owning an agricultural land of at least 5 ha surface.

In such a case, if a current member transfers his/her rights to a third party or a new member adheres, the company is obliged to inform the State of such transfer or adhesion. Subsequently, the State has a right take over the property of the land and to set a price for it unilaterally. Such a price should reflect the market value of the concerned real estate. However, in many cases, the partnership may find the price too low and wishes to challenge it. The partnership thus has to go to court asking for a price revision.

Real estate or shares in a company or a partnership as a non-cash contribution

It is not possible to avoid the above complications if instead of selling the shares or a real estate we transfer them to a purchaser through a different legal act. For example, one may wish to confer it as a non-cash contribution to a different company, exchange it for some other asset or donate it to a third party.

In those cases, very strict rules apply too. The State may take over respectively the land or the shares. The State sets the price unilaterally. The land- or shareowner may challenge the price in court but he has to apply within 1 month from take-over.

Mergers, divisions, and transformations of companies and partnerships

The right to take over the property of a real estate applies similarly to mergers, transformations, and divisions of companies and partnerships. There is a significant legal and financial risk connected to this kind of M&A.

Null and void agreements

If an agreement related to a transfer of land, shares in a company or rights in a partnership does not match all legal requirements it is null and void. In such a case the Buyer does not acquire the rights for which he/she has paid. The value of the real estate in question or importance for the company’s business is irrelevant. Even if the entity owns a relatively small real estate which currently is useless but potentially may be used for agricultural purposes and it is not properly identified within the due diligence process – this may trigger the invalidity of the whole transaction.

Be careful!

For the above reasons the buyer craving to purchase shares in Polish companies or partnerships should carefully investigate if his/her target entity is an owner of any real estate and – if so – what legal status of it might be. If it turns out that the entity owns an agricultural land of at least 1 ha then the share sale and purchase transaction should be performed very carefully and by specialized lawyers. If the relevant procedures are omitted the current share owner may lose the ownership of the shares and the intended purchaser may lose money in case the irregularity is discovered later on, when e.g. the seller gets insolvent, has been liquidated or simply disappeared.

After the transition period, in the last 10 years, the Republic of Serbia has become a stable and well organized society. The stable government, the status of the candidate country for the EU membership, as well as the traditionally well-balanced relations with both the East and the West, have led Serbia to become an increasingly interesting investment opportunity for both domestic, and foreign investors (total production increased of 2.3% from January to September 2018).

Legal framework and tax benefits

Being on the road to the EU membership, the Republic of Serbia has already begun to harmonise its legislation with the EU acquis communautaire, opening its market to foreign investments and striving to follow the current markets trends. On the other side, relationships with China and Russia are also traditionally exceptional good and cooperative.

In line with the aforementioned, the Serbian government seeks to attract as many foreign investors as possible, primarily by providing significant tax benefits, such as: reduced burden on earnings up to 75%, temporary tax exemption of the corporate profits, avoidance of double taxation, possibility of duty-free imports of raw materials and semi-finished products, duty-free imports of machines and equipment, as well as many other benefits.

Setting-up a company

Before presenting a short guidance on setting up a company in Serbia, it is notable to highlight that companies in Serbia can be established by any natural or legal person, both domestic citizens and non-residents. Therefore, the following basic rules of establishment could be of interest for the foreign readers.

Serbian Company Law recognizes four types of companies: Joint Stock Company, Limited Partnership, Partnership and Limited Liability Company. In this post we will focus on the latter, describing in a few lines the process of establishing a LLC (in Serbian: Društvo sa ograničenom odgovornošću – DOO) in Serbia.

A LLC is a company that is established by one or more legal and/or natural persons (which are the members of the company), for the purpose of performing a particular business under a common business name. Regardless of whether the LLC is owned by one or more member, remains, however, an entity separate from its members and liable for its obligations only with its assets.

The basic conditions that a LLC must fulfil in order to be able to submit a proper registration to the Business Registers Agency are:

  • Incorporation act: Memorandum of association, in case of a multi-member LLC / Decision on incorporation in case of a one-member LLC;
  • Business Name (in Serbian language in Cyrillic or Latin letters);
  • Appointment of the legal representative of the company, i.e. the director;
  • In Serbian law, contributions can be monetary or non-monetary (contributions in kind), including contributions in work and services. The minimum subscribed capital (monetary or non-monetary) is 100.00 RSD (equivalent to 1 euro). At the moment of establishment of the LLC, the contributions do not have to be paid in. In such case, the member of the company is obliged to determine the deadline for payment of the contributions, in accordance with the Incorporation Act. The deadline cannot be longer than 5 years after the foundation of the company.

When the aforementioned basic conditions are met, the incorporation procedure continues as follows:

  1. Registration of the company at the Business Registers Agency. The deadline for submission of the application is 15 days after the date of adoption of the incorporation act. When registered, the company obtains: (i) Registration number (in Serbian: Matični broj (MB)); (ii) Tax Identification Number (in Serbian: Poreski identifikacioni broj (PIB)); and (iii) Health insurance number issued by the Republic Health Insurance Institute.
  2. Opening a company bank account.
  3. Registration in the Tax Administration.
  4. Digital signature (optional).
  5. Company seal (optional).

The author of this post is Dragan Nikolic.

Each country has its approach and practice on doing business. In Latvia the two most popular forms of running a business are – limited liability company and joint stock company. Establishment of a legal entity is simple, fast and proportionate in costs. A limited liability company can be established with a minimum share capital of EUR 1,00, subject to compliance with certain requirements; whereas share capital of a full-scale limited liability company is EUR 2.800,00. For a joint stock company a share capital of at least EUR 35.000,00 is required.

Types of the companies and their specifics 

Limited liability company

The limited liability company (LLC) is one of the most popular corporate structures used in Latvia. A LLC is a private company, the shares of which are not publicly tradable.

In parallel to the LLC, there is also micro-capital LLC permitted with the decreased requirement for the share capital, starting from EUR1. Micro-capital LLC has certain limitations to comply with, inter alia:

  1. it can have no more than 5 founders (shareholders) all of them being individuals;
  2. any member of the Board of Directors must also be a shareholder of the company; and
  3. one person can be a shareholder in only one micro-capital company at a time. A micro-capital LLC is mostly used for business activities of a small scale and start-ups.

When it comes to establishing a LLC the main criteria are:

  1. any amount of founders (shareholders), no nationality criteria, both individuals and legal entities permitted. For a micro-capital LLC – not more than 5 individuals;
  2. share capital – minimum of EUR 2.800,00. For a micro-capital LLC, share capital can be any in a range from EUR 1,00 to EUR 2.800,00;
  3. for a regular LLC, the share capital can be paid up either by financial means or investment in kind;
  4. the Board of Directors of a LLC must consist of at least one member. The same requirement is applicable to micro-capital LLCs.

The composition of shareholders and any changes in relation thereto are notified to the Company Register (Commercial Register), which is a public register.

The management structure of the LLC consists of the Board of Directors, Supervisory Board (if any) and Shareholder Meeting.

Joint stock company

A joint stock company (JSC) is a public company, the shares (stock) of which may be publicly tradable.

The main criteria for establishment of a JSC:

  1. any amount of founders, no national criteria;
  2. share capital at least EUR 35.000,00;
  3. share capital can be paid up either by financial means or investment in kind;
  4. the Board of Directors shall consist of at least one member. If the stock of the JSC is publicly traded – at least 3 members.

The management structure of the JSC consists of the Board of Directors, Supervisory Board and Shareholder Meeting.

When it comes to differences between LLC and JSC it shall be noted that shareholder register in a JSC is an internal document of the company; whereas in respect to LLC all shareholders are showed in the public data base of the Company Register (Commercial Register).

Registration process – must know tips 

Registration of a company in Latvia involves necessity to submit more or less same documents as in any other country, like application for registration, decision or agreement on incorporation and articles of association. However there are few specific aspects to be taken into account.

Name of the company

Before applying for registration, first check whether the name desired is available – both in trade mark register and data base of the Company Register (Commercial Register).

Please also note that there are certain local requirements on the company names, inter alia:

  1. Latvian or Latin letters to be used solely;
  2. it is permitted to use only symbols like – &, @, %, +, =;
  3. it is prohibited to include in the name words “Republic of Latvia”.

Share capital

For micro-capital LLC payment of the share capital must be performed in full before applying for registration of the company. In its turn for a regular LLC the share capital must be paid up in amount of at least 50% and for a JSC in amount of 25%.

Payment of the share capital always involves opening a temporary account in a local bank.

In case share capital is in some part covered by investment in kind, it should be noted that evaluation of a certificated expert of such investment may be required.

Address

The Board of the company must ensure receipt of correspondence at the company’s registered office. While there is a practice to use virtual offices, though in each case it must be evaluated whether such address will be sufficient for the operation of the company.

Moreover:

  1. each desired address must be checked in official state address data base (kadastrs.lv) to indicate the address correctly in the registration documents;
  2. only premises or building can be used as registered office but not a property consisting only of a land;
  3. written consent of the owner of the real estate used as address will be required for registration of the company.

Document signing

It must be noted that certain documents related to registration of the company will require approval of notary public and legalization (Apostille). Documents can be bilingual; however always one language must be Latvian.

Registration

A company will be registered within 1-3 working days.

If concurrently applied also registration with tax administration (State Revenue Service) can be very fast made.

State fees for registration are reasonable, but it should be noted that additional expenses like for assistance of a lawyer, notary fees or translation expenses will come on the top.

Taxation

Each of these corporate structures is full-scale taxpayers in Latvia. They are subject to corporate income tax at a rate of 20% divided by ratio 0.8, such ratio being applied for the calculation of the gross taxable base out of net paid dividends (so practically a rate of 25% is applied). Once the value of services provided or goods supplied within last 12 months exceeds EUR 40.000,00, a company shall be registered with the Value Added Taxpayer’s Register of the State Revenue Service.

From an income tax perspective, small companies corresponding to certain statutory criteria (like micro- capital LLCs) may also apply for a micro-enterprise tax payer status, which is applied to turnover per taxation period of a micro-enterprise. The rate of micro-enterprise tax applied is 15% subject to adjustments in specific cases provided for by the law.

As regards tax reporting, since 2018 the annual report on income is cancelled. Tax payers shall submit a return and pay the corporate income tax each month by the 20th day of the following month. Taxpayers who have a taxation period of a quarter shall submit a tax return and pay tax every quarter by the 20th day of the month following the relevant quarter. With respect to value added tax, the annual tax return shall be submitted by May 1 of the year following the taxation period. Micro-enterprise tax payers have special reporting rules.

It shall be also noted that in Latvia companies have a statutorily designated possibility to halt and restore their economic activity. Activity can be halted for up to 3 years, and during this period, as a general rule, the company shall be subject to regular tax reporting duties.

It shall be noted that information provided in this article covers only general lines of the requirements and processes, therefore it is advised to contact an experts and seek advice to run the processes properly.

On February 14, 2019, the European Commission proudly announced in a press release that the night before, the European Parliament, the Council of the European Union and the European Commission reached a political deal on the first-ever rules aimed at creating a fair, transparent and predictable business environment for businesses and traders when using online platforms.

The new Regulation is part of the strategic plan of the European authorities to establish a digital single market and has its origin in the Commission Communication on Online Platforms of May 2016. As a result, in April 2018 the Commission presented the proposal of a new regulation.

The new rules will apply to companies such as Google AdSense, DoubleClick , eBay and Amazon Marketplace, Google and Bing Search , Facebook and YouTube, Google Play and App Store, Facebook Messenger, PayPal, Zalando and Uber.

After having conducted a series of studies, workshops and a large public consultation, the European Commission explained in its 2016 Communication the importance of creating in Europe a favorable environment for the development of new online platforms. Indeed, the statistics are very disappointing: only 4% of the world’s market capitalization is represented by online platforms created in Europe. The champions in the field are the United States and Asia.

On the basis of this observation, the Commission has drawn up a list of challenges for the European lawmaker as follows:

  • Ensuring a level playing field for comparable digital services
  • Ensuring that online platforms act responsibly
  • Fostering trust, transparency and ensuring fairness
  • Keeping markets open and non-discriminatory to foster a data-driven economy
  • Safeguarding a fair and innovation-friendly business environment

2 years after the Communication of the Commission, the new Regulation was born.

First of all, what are the conditions for the application of the regulation?

  • companies using online platforms must have their place of establishment or residence in the European Union and
  • goods or services must be offered to consumers in the Union.

(the place of establishment or residence of the providers of these services is not relevant to the application of the Regulation).

A strengthened obligation of transparency

The Regulation makes online platforms subject to transparency by obliging them to ensure that their terms and conditions:

  • are drafted in a clear and unambiguous manner;
  • are easily available for business users at all stages of their commercial relationship with the provider of online intermediation services, including in the pre-contractual stage;
  • set out the objective grounds for decisions to suspend or terminate, in whole or in part, the provision of their online intermediation services to business users.

Ranking

Online platforms will have to indicate in their terms and conditions the main parameters determining ranking and the reasons for the relative importance of those main parameters as opposed to other parameters

Where those main parameters include the possibility to influence ranking against any direct or indirect remuneration paid by business users to the provider of online intermediation services concerned, that online platform shall also include in its terms and conditions a description of those possibilities and of the effects of such remuneration on ranking.

Differentiated treatment of goods or services

The online platform shall also include in their terms and conditions a description of any differential treatment they give on the one hand in relation to goods and services offered to consumers through these online intermediation services, either by the supplier himself or by any user enterprise controlled by that supplier and, secondly, in relation to other business users.

Access to data

The platforms will have to establish a description of the technical and contractual access, or lack of such access for business users, to any personal data or other data, or both, that user companies or the consumers transmit for the use of the online intermediation services concerned or which are generated through the provision of those services.

Prohibition of certain unfair practices

Prohibition of modification of the terms and conditions without notice

Any proposed amendment of terms and conditions shall be notified to users and the notice period shall be at least 15 days from the date on which the online platform notifies the business users concerned about the envisaged modifications.

Prohibition of suspension or termination without cause

Under Article 4 of the Regulation when intermediation service provider decides to suspend or terminate, in whole or in part, providing its services to a given user company, it shall provide the business user without undue delay, with the motivation for such a decision.

New avenues for dispute resolution

Internal complaint-handling system

Providers of online intermediation services will have to provide an internal complaint handling the complaints from user companies.

Mediation

The platforms shall identify in their terms and conditions one or more mediators with which they are willing to engage to attempt to reach an agreement with business users on the settlement, out of court, of any disputes between the provider and the business user arising in relation to the provision of the online intermediation services concerned, including complaints that could not be resolved by means of the internal complaint-handling system.

The Regulation specifies the conditions that mediators shall met in order to be able to carry out their mission.

Judicial proceedings by representative organizations or associations and by public bodies

Organisations and associations which have a legitimate interest in representing user undertakings or entities using a corporate website, as well as public bodies established in the Member States, shall have the right to bring an action before the national courts in the Union, in accordance with the rules of the law of the Member State in which the action is brought, with a view to putting an end to or prohibiting any infringement, by providers of online intermediation services or on-line search engines.

Coming into force

As it is announced by The European Commission, the new rules will apply 12 months after its adoption and publication, and will be subject to review within 18 months thereafter, in order to ensure that they keep pace with the rapidly developing market. The EU has also set up a dedicated Online Platform Observatory to monitor the evolution of the market and the effective implementation of the rules.

Online platforms regardless of your size, start drafting your new terms and conditions!

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    Brazil- M&A and Agency Agreements

    20 Agosto 2019

    • Brasile
    • Agenzia
    • Diritto societario
    • M&A

    Belgian residents working abroad, e.g. in Luxembourg, may have a company car registered in their country of employment. The Belgian regional tax administrations exercise checks to verify whether the user of the company car complies with regional vehicle tax rules allowing an exemption from registration of the car in Belgium and from Belgian vehicle taxes. Especially in the Walloon Region this has given rise to a lot of litigation in recent years, especially regarding Luxembourg workers residing in Belgium.

    Belgian vehicle registration rules stipulate that the user of the car must have on board of the car a copy of his employment contract as well as a document drawn up by the foreign employer showing that the latter had put the vehicle at the employee’s disposal. If the driver cannot produce these documents, he is supposed by the Walloon tax administration to have violated the legal obligation to register the car in Belgium and to pay Belgian vehicle taxes.

    The consequences are severe. In addition to the vehicle taxes, the driver must pay a hefty fine. Failing to pay these large amounts (often more than EUR 3,000.-) on site at the time of the road check, the authorities withhold the on-board documents of the car, which results in the immobilization of the car.

    The Walloon tax administration, initially, did not pay back the vehicle taxes even if it was proven afterwards that the conditions of the exemptions of registration in Belgium and Belgian vehicle taxes were met. At first, the tax administration claimed that the vehicle taxes remained due if the employee showed the required documents only afterwards to the competent authorities. The position of the Walloon tax administration was that the employee must be able to produce the required documents on the spot during the check to be exempted from registration and vehicle taxes in Belgium.

    In a recent reasoned order, the European Court of Justice (‘ECJ’) confirmed that this harsh position by the Walloon tax administration was in violation of the freedom of movement for workers. A reasoned order is issued by the ECJ a.o. where a question referred to the ECJ for a preliminary ruling is identical to a question on which the ECJ has previously ruled or where the answer to the question referred for a preliminary ruling admits of no reasonable doubt.

    In other words, the ECJ confirms that the requirement to have the abovementioned documents permanently on board of the vehicle to be exempted from Belgian registration and Belgian vehicle taxes is manifestly disproportionate and thus a violation of the freedom of movement for workers.

    From a practical perspective, this ruling confirms that an employee resident in Belgium but working in another member state does not have to pay the Belgian vehicle taxes (or is entitled to be paid back) if he demonstrates after the check that he met the conditions to be exempted from registration and vehicle taxes in Belgium.

    The legal form of a GmbH (limited liability company) is very popular in Germany and is also one of the most frequently chosen forms of market entry for foreign investors. Its establishment is relatively simple and quick, the GmbH offers shareholders the desired limitation of liability and enjoys a high reputation in business relations, both in Germany and abroad. The statutory minimum share capital of 25,000 euros documents a certain seriousness and is intended to protect creditors.

    However, the opening of a German bank account to which the shareholders are to pay their capital contributions is usually a factual problem when setting up a GmbH; the capital stock must be provided before the company is registered in the German commercial register. On the one hand, it is not uncommon for German financial institutions to refuse to open accounts to foreign shareholders per se. On the other hand, it is almost standard today that the opening of a bank account for a new company in which foreign shareholders are to hold shares can take several weeks for various internal bank reasons. In practice, this means that the entry of the company in the commercial register can be suspended for several weeks or even months. Valuable time is lost, especially if you are about to start a project in Germany and everything is already prepared.

    Do you have to accept this unnecessary delay? No, not at all.

    There is a much faster and more acceptable way.

    A bank account is not required for the establishment of a GmbH. The German corporate law does not provide for this either. In practice, however, it has become common to open an account directly when a company is established. Of course, this only makes sense if the account is opened quickly and immediately. If, however, it is foreseeable in advance that there might be problems opening an account with a German bank, a different procedure is recommended.

    The managing director of the newly established GmbH (he is usually already appointed during the notarial establishment of the company) has to assure in the registration of the new company to the commercial register that the capital contributions are in the free and unrestricted disposal of the management. The law does not stipulate that this can only take place if the payment is made to a bank account of the GmbH. It is also possible and permissible for the managing director to opens a company cash box (cash register) in which the shareholders hand over the capital contributions in cash and the managing director notes the payment in the cash book. A copy of the cash book or a confirmation of the managing director can be handed over to the notary as proof of the payment, who then also forwards this copy to the commercial register.

    In the incorporation practice and experience of the author, this procedure has so far been accepted by the commercial registers without objection. All GmbHs founded in this way were successfully registered.

    The author of this post is Dominik Wagner.

    Le operazioni di acquisizione (M&A) in Italia, nella maggior parte dei casi, vengono realizzate attraverso acquisto di partecipazioni (‘share deal’) o di azienda o ramo d’azienda (‘asset deal’). Per ragioni principalmente fiscali sono più frequenti gli share deal rispetto agli asset deal, nonostante l’asset deal consenta una migliore limitazione dei rischi per l’acquirente. Vedremo le principali differenze tra share deal e asset deal in termini di rischi e di rapporti tra venditore e acquirente.

    Preferenza per operazioni di M&A mediante acquisto di partecipazioni (‘share deal’) rispetto ad acquisto di azienda o ramo d’azienda (‘asset deal’) nel mercato italiano

    In Italia, le operazione di acquisizione (M&A) vengono realizzate, nella maggior parte dei casi, attraverso acquisto di partecipazioni (‘share deal’) o di azienda o ramo d’azienda (‘asset deal’). Altre modalità, come la fusione, sono meno frequenti.

    Con l’acquisto di quote o azioni della società acquisita (‘share deal’) l’acquirente acquisisce, indirettamente, l’intero patrimonio aziendale (attività, passività, rapporti) e quindi si fa carico di tutti i rischi relativi alla precedente gestione della società.

    Con l’acquisto dell’azienda o di un ramo d’azienda (‘asset deal’) l’acquirente acquisisce un insieme di beni e rapporti organizzati per l’esercizio dell’impresa (immobili, impianti, dipendenti, contratti, crediti, debiti, ecc.). Il vantaggio dell’asset deal risiede nella possibilità per le parti di definire il perimetro del trasferimento e, quindi, per l’acquirente, di limitare i rischi legali dell’operazione.

    Nonostante questo vantaggio, la maggior parte delle operazioni di acquisizione in Italia avviene attraverso acquisto di partecipazioni. Nel 2018 gli acquisti di partecipazioni (azioni o quote) sono state circa 78.400, mentre le cessioni di azienda sono state circa 35.900 (fonte: www.notariato.it/it/news/dati-statistici-notarili-anno-2018). E va osservato che il dato delle cessioni d’azienda comprende anche le aziende di piccole o piccolissime dimensioni esercitate da imprenditori individuali, per le quali l’alternativa dello share deal (pur praticabile, attraverso il conferimento dell’azienda in una newco e la cessione delle partecipazioni nella newco) non è percorribile in concreto per ragioni di costo.

    Costi fiscali delle operazioni di acquisizione (M&A) in Italia

    La principale ragione della preferenza per l’acquisto di partecipazione (‘share deal’) rispetto all’acquisto di azienda (‘asset deal’) risiede nei costi fiscali dell’operazione. Vediamo quali sono, in linea generale.

    Nell’acquisto di partecipazioni, le imposte dirette a carico del venditore vengono calcolate sulla plusvalenza, secondo le seguenti percentuali:

    • se il venditore è una società di capitali (s.p.a.; s.r.l.; s.a.p.a.) l’aliquota è del 24% della plusvalenza. Ma, a determinate condizioni, si applica il regime della c.d. PEX (participation exemption) con applicazione dell’aliquota del 24% solo sul 5% della plusvalenza.
    • Se il venditore è una persona fisica l’aliquota sulla plusvalenza è del 26%.
    • Se il venditore è una società di persone (s.s.; s.n.c..; s.a.s.) la plusvalenza è integralmente imponibile, tuttavia al ricorrere di determinate condizioni, l’imponibilità è limitata al 60% dell’ammontare della plusvalenza. In entrambi i casi l’aliquota applicabile è quella marginale riferita a ciascun socio a cui il reddito viene imputato per trasparenza.

    Nell’acquisto di partecipazioni si applica l’imposta di registro, normalmente a carico dell’acquirente, di euro 200.

    Anche nell’acquisto di azienda, le imposte dirette a carico del venditore vengono calcolate sulla plusvalenza. Se il venditore è una società di capitali, l’aliquota è del 24% della plusvalenza. Se il venditore è una società di persone (con soci persone fisiche) o un imprenditore individuale, le aliquote dipendono dal reddito del venditore.

    Nell’acquisto di azienda si applicano le imposte indirette, normalmente a carico dell’acquirente, calcolate sulla parte del prezzo attribuibile ai singoli beni trasferiti. Il prezzo è il risultato delle attività trasferite detratte le passività trasferite. Le percentuali sono diverse a seconda del tipo di beni. In generale:

    • ai beni mobili si applica una imposta di registro del 3%;
    • all’avviamento si applica una imposta di registro del 3%;
    • ai fabbricati si applica una imposta di registro del 9% (e imposte ipotecarie e catastali in misura fissa di euro 50 ciascuna);
    • ai terreni si applica una imposta di registro tra il 9 e il 12% (a seconda dell’acquirente) e imposte ipotecarie e catastali in misura fissa di euro 50 ciascuna.

    Nel caso in cui l’azienda sia composta da beni soggetti ad aliquote diverse e le parti abbiano pattuito un corrispettivo unico, senza distinzione in merito al valore attribuibile ai singoli beni, l’imposta deve calcolarsi applicando all’unico corrispettivo pattuito l’aliquota più elevata.

    Va sottolineato che l’Agenzia delle Entrate può sottoporre ad accertamento il valore attribuito dalle parti ai beni immobili e all’avviamento, con conseguente rischio di applicazione di maggiori imposte.

    Share deal e asset deal: rischi e responsabilità verso i terzi

    Nell’acquisto di quote o azioni (‘share deal’) l’acquirente si fa carico, indirettamente, di tutti i rischi relativi alla precedente gestione della società.

    Nell’acquisto dell’azienda o di un ramo d’azienda (‘asset deal’), invece, le parti possono decidere il perimetro del trasferimento (quali beni e rapporti) così stabilendo, nei rapporti tra loro, i rischi che l’acquirente assume.

    Vi sono però alcune norme, che le parti non possono derogare, relative ai rapporti con i terzi, che influiscono significativamente sui rischi per il venditore e l’acquirente e quindi sulla negoziazione dell’accordo tra le parti. Le principali sono le seguenti.

    • Lavoratori dipendenti: il rapporto di lavoro continua con l’acquirente dell’azienda. Il venditore e l’acquirente sono obbligati in solido per tutti i crediti del lavoratore al momento del trasferimento (art. 2112 c.c.).
    • Debiti: il venditore è obbligato al pagamento di tutti i debiti sino alla data del trasferimento. L’acquirente è obbligato per i debiti che risultano dai libri contabili (art. 2560 c.c.).
    • Debiti e responsabilità fiscali: il venditore è obbligato al pagamento di debiti, imposte e sanzioni fiscali relative al periodo sino alla data del trasferimento.
      L’acquirente, in aggiunta all’obbligo relativo ai debiti fiscali che risultano dai libri contabili (art. 2560 c.c.), è responsabile per le imposte e sanzioni, anche se non risultano dai libri contabili, con i seguenti limiti (art. 14 D.lgs. 472/1997):
    • beneficio della preventiva escussione del venditore;
    • fino al valore dell’azienda o del ramo d’azienda acquistato;
    • per le imposte e sanzioni non ancora contestate, la responsabilità riguarda solo quelle relative all’anno della vendita dell’azienda e ai due precedenti; per le imposte e sanzioni relative al periodo anteriore ai due anni precedenti la vendita dell’azienda, la responsabilità riguarda solo quelle contestate entro tale periodo;
    • nei limiti del debito risultante alla data di trasferimento dagli atti degli uffici dell’amministrazione finanziaria. L’Agenzia delle Entrate è tenuta a rilasciare un certificato sull’esistenza di contestazioni in corso e sui debiti. Il certificato negativo, o non rilasciato entro 40 giorni dalla richiesta, libera l’acquirente da responsabilità.
    • Contratti: le parti possono scegliere quali contratti trasferire. Rispetto ai contratti trasferiti, l’acquirente subentra, anche senza il consenso del terzo contraente, nei contratti per l’esercizio dell’azienda che non hanno carattere personale (sono a carattere personale quelli che prevedono da parte del venditore una prestazione oggettivamente infungibile o soggettivamente infungibile). Inoltre il terzo contraente può recedere dal contratto entro tre mesi, se sussiste una giusta causa (ad esempio se l’acquirente non garantisce, per la propria situazione patrimoniale o per capacità tecniche, di poter adempiere al contratto) (art. 2558 c.c.).

    Alcuni strumenti per affrontare i rischi

    Per affrontare i rischi derivanti dalle responsabilità verso i terzi e i rischi generali connessi all’acquisizione, vi sono diversi strumenti negoziali e contrattuali che possono essere utilizzati. Vediamone alcuni.

    Nelle operazioni di acquisto dell’azienda o di rami d’azienda (‘asset deal’):

    • Lavoratori dipendenti: è possibile concordare con il lavoratore modifiche alle condizioni contrattuali e rinunce alla responsabilità solidale dell’acquirente e del venditore (ex art. 2112 c.c.). L’accordo con i lavoratore per essere valido deve essere concluso in sede ‘protetta’ (ad esempio: con l’assistenza delle organizzazioni sindacali).
    • Debiti:
    • trasferire all’acquirente i debiti riducendo il prezzo in misura corrispondente; la riduzione del prezzo comporta, inoltre, una minor costo fiscale dell’operazione. In caso di trasferimento dei debiti, per tutelare il venditore si può ottenere dal creditore una dichiarazione di liberazione del venditore dalla responsabilità ex art. 2560 c.c.; oppure si può prevedere che il pagamento del debito da parte dell’acquirente avvenga contestualmente al trasferimento dell’azienda (‘closing’).
    • Per i debiti non trasferiti all’acquirente, ottenere dal creditore una dichiarazione di liberazione dell’acquirente dalla responsabilità ex art. 2560 c.c.
    • Per i debiti per i quali non sia possibile ottenere la dichiarazione di liberazione da parte del creditore, pattuire forme di garanzia a favore del venditore (per i debiti trasferiti) o a favore dell’acquirente (per i debiti non trasferiti), quali ad esempio la dilazione del pagamento (a favore dell’acquirente) di parte del prezzo, il deposito fiduciario (‘escrow’) di parte del prezzo, fideiussioni bancarie o da parte dei soci.
    • Debiti e responsabilità fiscali:
    • ottenere dall’Agenzia delle Entrate il certificato ex art. 14 D.lgs. 472/1997 sui debiti e le contestazioni in corso;
    • trasferire all’acquirente i debiti riducendo il prezzo in misura corrispondente;
    • pattuire le forme di garanzia a favore del venditore (per i debiti trasferiti) e a favore dell’acquirente (per i debiti non trasferiti o per le contestazioni che non sono ancora debiti), quali ad esempio quelle sopra esposte per i debiti in generale.
    • Contratti: per quelli che vengono trasferiti:
    • verificare che le prestazioni a carico del venditore sino alla data del trasferimento siano state regolarmente adempiute, per evitare il rischio di contestazioni del terzo contraente che possono bloccare l’esecuzione del contratto;
    • almeno per i contratti più importanti (e salvo ragioni di riservatezza), cercare di ottenere conferma dal terzo contraente del benestare al trasferimento del contratto.

    Nelle operazioni di acquisto di partecipazioni (‘share deal’), in cui l’acquirente si fa carico, indirettamente, di tutti i rischi relativi alla precedente gestione della società, alcuni strumenti sono:

    • Due diligence. Svolgere una approfondita due diligence legale, fiscale e contabile sulla società, per valutare preventivamente i rischi e gestirli nella trattativa e nei contratti.
    • Dichiarazioni e garanzie (‘R&W’) e indennizzo. Prevedere nel contratto di acquisizione (‘share purchase agreement’) un set dettagliato di dichiarazioni e garanzie – e obblighi di indennizzo in caso di non conformità – a carico del venditore relativamente alla situazione della società (‘business warranties’: bilancio; situazione patrimoniale di riferimento; contratti; contenzioso; rispetto della normativa ambientale; autorizzazioni per lo svolgimento dell’attività; debiti; crediti ecc.). La trattativa sulle dichiarazioni e garanzie normalmente recepisce, gestendoli, gli esiti della due diligence (ad esempio: viene escluso dalle dichiarazioni e garanzie e dall’indennizzo un contenzioso emerso in due diligence, del quale le parti tengono conto nella definizione del prezzo). La pattuizione di dichiarazioni e garanzie sulla situazione della società (‘business warranties’) e dell’obbligo di indennizzo sono necessari negli share deal in Italia, in quanto in mancanza di tali clausole l’acquirente non può ottenere dal venditore (salvo situazioni estreme e molto rare) un risarcimento o indennizzo in caso la situazione della società sia diversa da quella considerata al momento dell’acquisto (così ad esempio: Cass. Civ. 16963/2014).
    • Garanzie per l’acquirente. Strumenti per garantire all’acquirente l’effettiva possibilità di ottenere l’indennizzo (o parte dell’indennizzo) in caso di non conformità delle dichiarazioni e garanzie. Tra queste: (a) la dilazione del pagamento di parte del prezzo; (b) il versamento di parte del prezzo in un deposito fiduciario (‘escrow’) per la durata delle dichiarazioni e garanzie e, in caso di contestazioni, fino a che la contestazione non è definita; (c) fideiussione bancaria;; (d) polizza W&I, contratto di assicurazione che copre il rischio dell’acquirente in caso di violazioni di dichiarazioni e garanzie, sino ad un importo massimo (ed esclusi alcuni rischi).

    Altri fattori che incidono sulla scelta tra share deal e asset deal

    Naturalmente la scelta di realizzare un’operazione di acquisizione in Italia mediante share deal o asset deal, dipende anche da altri fattori oltre a quello dei costi fiscali dell’operazione. Eccone alcuni.

    • Acquisto di parte del business. Si sceglie l’asset deal, quando l’operazione non riguarda l’acquisto dell’intera azienda del venditore ma solo una sua parte (un ramo d’azienda).
    • Situazione della società problematica. Si sceglie l’asset deal quando la situazione della società target è così problematica che l’acquirente non è disponibile ad assumere tutti i rischi derivanti dalla precedente gestione, ma solo parte di essi.
    • Mantenimento di un ruolo da parte del venditore. Si sceglie lo share deal quando si vuole conservare al venditore un ruolo nella società acquisita. In questo caso, oltre ad un ruolo nel management, è frequente il mantenimento da parte del venditore di una partecipazione di minoranza, con clausole di exit (diritti di put e call) decorso un certo periodo di tempo. Clausole che, spesso, legano il prezzo ai risultati futuri e, quindi, nell’interesse dell’acquirente incentivano il venditore nel ruolo manageriale e, nell’interesse del venditore, valorizzano prospettive reddituali non concretizzate al momento dell’acquisto.

    A legal due diligence of a Brazilian target company should analyze the existence and the content of Agency Agreements, including values paid to the agent and the nature of such payments and the factual situation of the target’s agents, in order to evaluate potential contingencies.

    One usual suspect in legal due diligences of Brazilian target companies in M&A transactions that should not be overlooked is the existence of agency agreements, due to:

    • the obligation to indemnify the agent stipulated by law: at least 1/12th of all commissions paid throughout the entire term of the agency agreement; and
    • the risks for the agency being disregarded and considered as an employment relationship, subjecting the principal to compensate the agent as an employee with all rights, benefits, taxes and social contributions.

    This should be considered for evaluation of potential contingencies and the impacts on the valuation of the target.

    No doubt that agents can be an important component of the sales force of the business and can be strategic for the activity of the principal, in view of a certain independence and for not increasing the payroll of a company.

    On the other hand, under Brazilian laws, the protective nature of the agency demands the principal a considerable level of attention.

    Indemnification

    Brazilian Federal Law No. 4,886/65 as amended – the Brazilian Agency Law – determines that the agent is entitled to, at the termination of an agency agreement, receive an indemnification of 1/12th calculated over all the commissions paid throughout the duration of the entire period of the agency agreement.

    The Brazilian Agency Law stipulates that if the parties sign a new contract within 6 months after the expiration of the previous, the relation between agent and principal shall be deemed as the same relationship and thus, the duration to calculate the indemnification shall encompass the entire period (past and subsequent contract).

    Termination by the agent

    The Brazilian Agency Law also stipulates situations that agent could terminate the contract and still be entitled to receive the 1/12th indemnification:

    • reduction of the activities in disagreement with the contractual stipulation
    • breach of exclusivity (territory and/or products), if so stipulated in the agreement
    • determination of prices that makes the agency unfeasible and
    • default on payment of the commissions
    • force majeure

    Termination without cause

    Termination without cause can be done, upon payment to agent of the indemnification and with a previous notice of at least 30 days, in which situation the agent shall receive the payment of 1/3 of the remuneration received during the previous 90 days prior to the termination.

    Can principal avoid the indemnification?

    The only cases where the 1/12th indemnification would not be applicable are when the contract is terminated by principal with cause. The Brazilian Agency Law has limited situations for principal to terminate the contract with cause:

    • acts by agent causing disrepute of the principal
    • breach of obligations related to the agency activities
    • criminal conviction related to honor, reputation

    These situations shall be clearly demonstrated. Producing the sufficiently strong evidence of the facts to configure cause for termination may not be an easy task, considering some of the facts may be subject to construing and interpreting by the parties, witnesses and ultimately the judge.

    As a result, from past experiences, it is rare to see principals in conditions not to incur in the 1/12th indemnification.

    Potential risk: configuring employment relationship

    In addition to the indemnification, the activities developed by the agent could eventually be deemed as performed by a regular employee of the principal and, in this case, principal could be subject to compensate the agent as an employee.

    Agent vs. employee

    For the appreciation of the employment relationship, the individual acting as agent shall file a labor claim and demonstrate the existence of the employment relationship.

    The Labor Court judge will consider the factual situation, prevailing upon the written agreements or other formal documents. The judge may rely on e-mails, witnesses and other evidence.

    The elements of an employment relationship are:

    • Individual: in case the individual acts by himself to perform the services; Personal services: the services are in fact performed by the individual specifically to the Principal;;
    • Non-eventuality – exclusivity: the services are rendered in a regular basis;
    • Subordination: key factor – the individual has to follow strict instructions directed by principal, such as reporting to an employee of the principal, determined visits;
    • Rewarding – fixed remuneration: the individual is awarded regular amounts and expenses allowances

    In the event the individual can demonstrate the existence of the elements to configure an employment relationship, he/she could have an award to entitle him/her to have his remuneration considered as of a regular employee for the last 5 years.

    As a result, the individual would be awarded the payment of Christmas bonus (equivalent to 1 monthly remuneration per year), vacation allowance (1/3 of a monthly remuneration per year), unemployment guarantee fund (1 monthly remuneration per year) plus other benefits that he/she would be given as an employee of principal (based on the collective bargaining agreement between the employees’ and employers’ unions). The company would also be obliged to make the payment of the co-related social security contributions.

    Needless to say, the result could turn into a considerable potential contingency.

    The author of this article is Paulo Yamaguchi

    The sale and purchase of agricultural land under Polish law have been recurrently amended over the past few years.

    For the most part legal provisions aim to protect the country’s food resources as well as to be self-sustained and independent from foreign food suppliers. Agriculture is considered to be one of the decisive economic branches and it’s the Lawmaker’s according belief that it should be accurately regulated. Consequently, the sale and purchase of land which may be used for farming are subject to various limitations, as well as the sale and purchase of company shares or business assets (fonds de commerce) holding such land.

    This topic, therefore, is crucial to foreign investors. In this article, I would like to highlight some key points which should be taken into account by foreign investors in setting up a joint venture with a Polish counterpart owning a real estate or acquiring shares in an already existing entity that owns a real estate. These situations are very frequent and the legal risks related to the agricultural land cannot be neglected.

    Agricultural land is defined as any land which is qualified as such in the zoning regulation. The agricultural character subsists not only when the real estate is already utilized for agricultural purposes but also if such use is merely potential. Here arises the first issue: it is a matter of facts, not law whether such utilization is conceivable and often arguable.

    One may imagine a plot of land which is not used for farming at the moment but still suitable to be used in such a way in the future. Such a real estate will be subject to the legal limitations and the sale and purchase of it offer a significant legal and commercial issue. This pertains green fields in the outskirts of a city which are generally marked as agricultural land under the zoning plan and form an ideal target for investors who wish to construct a production facility (e.g. factory), warehouse or start a business far from farming. Except if planning the construction of residential buildings they will have to face severe legal requirements.

    Another point is that in Poland not every region has a zoning plan. Often there is none and the legal character of a given land has to be determined on the basis of other sources; such as a land register or a general concept of zoning plan adopted by a single municipality. Oftentimes the data arising from the two sources are contradictory.

    Issue concerns only out of city real estate

    The upside is that these strict regulations do not apply to agricultural land situated within the administrative city limits.

    Minimum surface: 1 ha and 5 ha

    The statutory limitations apply only in case if the land exceeds a certain surface.

    For share deals (transactions where the shares in a company or rights in a partnership are transferred) the minimum surface required is 5 ha. If a company or a partnership owns an agricultural land below 5 ha the share deal can be done without further complications.

    For asset deals (simple transactions resulting in a transfer of land property) the relevant figure is 1 ha (see below).

    Transfer of land

    The transfer of agricultural land having a surface exceeding 1 ha to a non-farmer, requires the approval of the State. This is given through an administrative decision.

    If the surface is less than 1 ha, transfer approval is not mandatory, but the State has a right of first refusal with respect to such land. As mentioned earlier, these rules do not apply to the real estate situated within the cities.

    For these reasons an asset deal in Poland may produce complications.

    Transfer of shares in a capital company

    The share deals are comparatively easier, even if the company owns an agricultural real estate. They do not require the approval of the State.

    However, the State has a right of first refusal with respect to shares in a company (limited liability company or joint stock company) which owns an agricultural land having a surface of at least 5 ha. It has a right to examine the company’s papers and books as well as to request data from the company in order to establish the legal and financial state of the real estate.

    The shares owner can only enter into a conditional share sale and purchase agreement with a third party. Such an agreement is conditioned by the mentioned right to a first refusal within a statutory time period of 1 (one) month. However, there is a very important deviation from the regular right of first refusal. If the State considers the contractual price does not meet the market value of the shares it may demand that the share price which the State itself will pay is set by a court. Such price revision does not extend to regular share deals or asset deals. And therein we see the significant risk for the seller.

    Transfer of shares in a partnership and accession of a new member

    Different rules apply if the sale and purchase agreements relating to the rights in a partnership (general partnership, limited partnership, a partnership limited by shares or professional partnership) owning an agricultural land of at least 5 ha surface.

    In such a case, if a current member transfers his/her rights to a third party or a new member adheres, the company is obliged to inform the State of such transfer or adhesion. Subsequently, the State has a right take over the property of the land and to set a price for it unilaterally. Such a price should reflect the market value of the concerned real estate. However, in many cases, the partnership may find the price too low and wishes to challenge it. The partnership thus has to go to court asking for a price revision.

    Real estate or shares in a company or a partnership as a non-cash contribution

    It is not possible to avoid the above complications if instead of selling the shares or a real estate we transfer them to a purchaser through a different legal act. For example, one may wish to confer it as a non-cash contribution to a different company, exchange it for some other asset or donate it to a third party.

    In those cases, very strict rules apply too. The State may take over respectively the land or the shares. The State sets the price unilaterally. The land- or shareowner may challenge the price in court but he has to apply within 1 month from take-over.

    Mergers, divisions, and transformations of companies and partnerships

    The right to take over the property of a real estate applies similarly to mergers, transformations, and divisions of companies and partnerships. There is a significant legal and financial risk connected to this kind of M&A.

    Null and void agreements

    If an agreement related to a transfer of land, shares in a company or rights in a partnership does not match all legal requirements it is null and void. In such a case the Buyer does not acquire the rights for which he/she has paid. The value of the real estate in question or importance for the company’s business is irrelevant. Even if the entity owns a relatively small real estate which currently is useless but potentially may be used for agricultural purposes and it is not properly identified within the due diligence process – this may trigger the invalidity of the whole transaction.

    Be careful!

    For the above reasons the buyer craving to purchase shares in Polish companies or partnerships should carefully investigate if his/her target entity is an owner of any real estate and – if so – what legal status of it might be. If it turns out that the entity owns an agricultural land of at least 1 ha then the share sale and purchase transaction should be performed very carefully and by specialized lawyers. If the relevant procedures are omitted the current share owner may lose the ownership of the shares and the intended purchaser may lose money in case the irregularity is discovered later on, when e.g. the seller gets insolvent, has been liquidated or simply disappeared.

    After the transition period, in the last 10 years, the Republic of Serbia has become a stable and well organized society. The stable government, the status of the candidate country for the EU membership, as well as the traditionally well-balanced relations with both the East and the West, have led Serbia to become an increasingly interesting investment opportunity for both domestic, and foreign investors (total production increased of 2.3% from January to September 2018).

    Legal framework and tax benefits

    Being on the road to the EU membership, the Republic of Serbia has already begun to harmonise its legislation with the EU acquis communautaire, opening its market to foreign investments and striving to follow the current markets trends. On the other side, relationships with China and Russia are also traditionally exceptional good and cooperative.

    In line with the aforementioned, the Serbian government seeks to attract as many foreign investors as possible, primarily by providing significant tax benefits, such as: reduced burden on earnings up to 75%, temporary tax exemption of the corporate profits, avoidance of double taxation, possibility of duty-free imports of raw materials and semi-finished products, duty-free imports of machines and equipment, as well as many other benefits.

    Setting-up a company

    Before presenting a short guidance on setting up a company in Serbia, it is notable to highlight that companies in Serbia can be established by any natural or legal person, both domestic citizens and non-residents. Therefore, the following basic rules of establishment could be of interest for the foreign readers.

    Serbian Company Law recognizes four types of companies: Joint Stock Company, Limited Partnership, Partnership and Limited Liability Company. In this post we will focus on the latter, describing in a few lines the process of establishing a LLC (in Serbian: Društvo sa ograničenom odgovornošću – DOO) in Serbia.

    A LLC is a company that is established by one or more legal and/or natural persons (which are the members of the company), for the purpose of performing a particular business under a common business name. Regardless of whether the LLC is owned by one or more member, remains, however, an entity separate from its members and liable for its obligations only with its assets.

    The basic conditions that a LLC must fulfil in order to be able to submit a proper registration to the Business Registers Agency are:

    • Incorporation act: Memorandum of association, in case of a multi-member LLC / Decision on incorporation in case of a one-member LLC;
    • Business Name (in Serbian language in Cyrillic or Latin letters);
    • Appointment of the legal representative of the company, i.e. the director;
    • In Serbian law, contributions can be monetary or non-monetary (contributions in kind), including contributions in work and services. The minimum subscribed capital (monetary or non-monetary) is 100.00 RSD (equivalent to 1 euro). At the moment of establishment of the LLC, the contributions do not have to be paid in. In such case, the member of the company is obliged to determine the deadline for payment of the contributions, in accordance with the Incorporation Act. The deadline cannot be longer than 5 years after the foundation of the company.

    When the aforementioned basic conditions are met, the incorporation procedure continues as follows:

    1. Registration of the company at the Business Registers Agency. The deadline for submission of the application is 15 days after the date of adoption of the incorporation act. When registered, the company obtains: (i) Registration number (in Serbian: Matični broj (MB)); (ii) Tax Identification Number (in Serbian: Poreski identifikacioni broj (PIB)); and (iii) Health insurance number issued by the Republic Health Insurance Institute.
    2. Opening a company bank account.
    3. Registration in the Tax Administration.
    4. Digital signature (optional).
    5. Company seal (optional).

    The author of this post is Dragan Nikolic.

    Each country has its approach and practice on doing business. In Latvia the two most popular forms of running a business are – limited liability company and joint stock company. Establishment of a legal entity is simple, fast and proportionate in costs. A limited liability company can be established with a minimum share capital of EUR 1,00, subject to compliance with certain requirements; whereas share capital of a full-scale limited liability company is EUR 2.800,00. For a joint stock company a share capital of at least EUR 35.000,00 is required.

    Types of the companies and their specifics 

    Limited liability company

    The limited liability company (LLC) is one of the most popular corporate structures used in Latvia. A LLC is a private company, the shares of which are not publicly tradable.

    In parallel to the LLC, there is also micro-capital LLC permitted with the decreased requirement for the share capital, starting from EUR1. Micro-capital LLC has certain limitations to comply with, inter alia:

    1. it can have no more than 5 founders (shareholders) all of them being individuals;
    2. any member of the Board of Directors must also be a shareholder of the company; and
    3. one person can be a shareholder in only one micro-capital company at a time. A micro-capital LLC is mostly used for business activities of a small scale and start-ups.

    When it comes to establishing a LLC the main criteria are:

    1. any amount of founders (shareholders), no nationality criteria, both individuals and legal entities permitted. For a micro-capital LLC – not more than 5 individuals;
    2. share capital – minimum of EUR 2.800,00. For a micro-capital LLC, share capital can be any in a range from EUR 1,00 to EUR 2.800,00;
    3. for a regular LLC, the share capital can be paid up either by financial means or investment in kind;
    4. the Board of Directors of a LLC must consist of at least one member. The same requirement is applicable to micro-capital LLCs.

    The composition of shareholders and any changes in relation thereto are notified to the Company Register (Commercial Register), which is a public register.

    The management structure of the LLC consists of the Board of Directors, Supervisory Board (if any) and Shareholder Meeting.

    Joint stock company

    A joint stock company (JSC) is a public company, the shares (stock) of which may be publicly tradable.

    The main criteria for establishment of a JSC:

    1. any amount of founders, no national criteria;
    2. share capital at least EUR 35.000,00;
    3. share capital can be paid up either by financial means or investment in kind;
    4. the Board of Directors shall consist of at least one member. If the stock of the JSC is publicly traded – at least 3 members.

    The management structure of the JSC consists of the Board of Directors, Supervisory Board and Shareholder Meeting.

    When it comes to differences between LLC and JSC it shall be noted that shareholder register in a JSC is an internal document of the company; whereas in respect to LLC all shareholders are showed in the public data base of the Company Register (Commercial Register).

    Registration process – must know tips 

    Registration of a company in Latvia involves necessity to submit more or less same documents as in any other country, like application for registration, decision or agreement on incorporation and articles of association. However there are few specific aspects to be taken into account.

    Name of the company

    Before applying for registration, first check whether the name desired is available – both in trade mark register and data base of the Company Register (Commercial Register).

    Please also note that there are certain local requirements on the company names, inter alia:

    1. Latvian or Latin letters to be used solely;
    2. it is permitted to use only symbols like – &, @, %, +, =;
    3. it is prohibited to include in the name words “Republic of Latvia”.

    Share capital

    For micro-capital LLC payment of the share capital must be performed in full before applying for registration of the company. In its turn for a regular LLC the share capital must be paid up in amount of at least 50% and for a JSC in amount of 25%.

    Payment of the share capital always involves opening a temporary account in a local bank.

    In case share capital is in some part covered by investment in kind, it should be noted that evaluation of a certificated expert of such investment may be required.

    Address

    The Board of the company must ensure receipt of correspondence at the company’s registered office. While there is a practice to use virtual offices, though in each case it must be evaluated whether such address will be sufficient for the operation of the company.

    Moreover:

    1. each desired address must be checked in official state address data base (kadastrs.lv) to indicate the address correctly in the registration documents;
    2. only premises or building can be used as registered office but not a property consisting only of a land;
    3. written consent of the owner of the real estate used as address will be required for registration of the company.

    Document signing

    It must be noted that certain documents related to registration of the company will require approval of notary public and legalization (Apostille). Documents can be bilingual; however always one language must be Latvian.

    Registration

    A company will be registered within 1-3 working days.

    If concurrently applied also registration with tax administration (State Revenue Service) can be very fast made.

    State fees for registration are reasonable, but it should be noted that additional expenses like for assistance of a lawyer, notary fees or translation expenses will come on the top.

    Taxation

    Each of these corporate structures is full-scale taxpayers in Latvia. They are subject to corporate income tax at a rate of 20% divided by ratio 0.8, such ratio being applied for the calculation of the gross taxable base out of net paid dividends (so practically a rate of 25% is applied). Once the value of services provided or goods supplied within last 12 months exceeds EUR 40.000,00, a company shall be registered with the Value Added Taxpayer’s Register of the State Revenue Service.

    From an income tax perspective, small companies corresponding to certain statutory criteria (like micro- capital LLCs) may also apply for a micro-enterprise tax payer status, which is applied to turnover per taxation period of a micro-enterprise. The rate of micro-enterprise tax applied is 15% subject to adjustments in specific cases provided for by the law.

    As regards tax reporting, since 2018 the annual report on income is cancelled. Tax payers shall submit a return and pay the corporate income tax each month by the 20th day of the following month. Taxpayers who have a taxation period of a quarter shall submit a tax return and pay tax every quarter by the 20th day of the month following the relevant quarter. With respect to value added tax, the annual tax return shall be submitted by May 1 of the year following the taxation period. Micro-enterprise tax payers have special reporting rules.

    It shall be also noted that in Latvia companies have a statutorily designated possibility to halt and restore their economic activity. Activity can be halted for up to 3 years, and during this period, as a general rule, the company shall be subject to regular tax reporting duties.

    It shall be noted that information provided in this article covers only general lines of the requirements and processes, therefore it is advised to contact an experts and seek advice to run the processes properly.

    On February 14, 2019, the European Commission proudly announced in a press release that the night before, the European Parliament, the Council of the European Union and the European Commission reached a political deal on the first-ever rules aimed at creating a fair, transparent and predictable business environment for businesses and traders when using online platforms.

    The new Regulation is part of the strategic plan of the European authorities to establish a digital single market and has its origin in the Commission Communication on Online Platforms of May 2016. As a result, in April 2018 the Commission presented the proposal of a new regulation.

    The new rules will apply to companies such as Google AdSense, DoubleClick , eBay and Amazon Marketplace, Google and Bing Search , Facebook and YouTube, Google Play and App Store, Facebook Messenger, PayPal, Zalando and Uber.

    After having conducted a series of studies, workshops and a large public consultation, the European Commission explained in its 2016 Communication the importance of creating in Europe a favorable environment for the development of new online platforms. Indeed, the statistics are very disappointing: only 4% of the world’s market capitalization is represented by online platforms created in Europe. The champions in the field are the United States and Asia.

    On the basis of this observation, the Commission has drawn up a list of challenges for the European lawmaker as follows:

    • Ensuring a level playing field for comparable digital services
    • Ensuring that online platforms act responsibly
    • Fostering trust, transparency and ensuring fairness
    • Keeping markets open and non-discriminatory to foster a data-driven economy
    • Safeguarding a fair and innovation-friendly business environment

    2 years after the Communication of the Commission, the new Regulation was born.

    First of all, what are the conditions for the application of the regulation?

    • companies using online platforms must have their place of establishment or residence in the European Union and
    • goods or services must be offered to consumers in the Union.

    (the place of establishment or residence of the providers of these services is not relevant to the application of the Regulation).

    A strengthened obligation of transparency

    The Regulation makes online platforms subject to transparency by obliging them to ensure that their terms and conditions:

    • are drafted in a clear and unambiguous manner;
    • are easily available for business users at all stages of their commercial relationship with the provider of online intermediation services, including in the pre-contractual stage;
    • set out the objective grounds for decisions to suspend or terminate, in whole or in part, the provision of their online intermediation services to business users.

    Ranking

    Online platforms will have to indicate in their terms and conditions the main parameters determining ranking and the reasons for the relative importance of those main parameters as opposed to other parameters

    Where those main parameters include the possibility to influence ranking against any direct or indirect remuneration paid by business users to the provider of online intermediation services concerned, that online platform shall also include in its terms and conditions a description of those possibilities and of the effects of such remuneration on ranking.

    Differentiated treatment of goods or services

    The online platform shall also include in their terms and conditions a description of any differential treatment they give on the one hand in relation to goods and services offered to consumers through these online intermediation services, either by the supplier himself or by any user enterprise controlled by that supplier and, secondly, in relation to other business users.

    Access to data

    The platforms will have to establish a description of the technical and contractual access, or lack of such access for business users, to any personal data or other data, or both, that user companies or the consumers transmit for the use of the online intermediation services concerned or which are generated through the provision of those services.

    Prohibition of certain unfair practices

    Prohibition of modification of the terms and conditions without notice

    Any proposed amendment of terms and conditions shall be notified to users and the notice period shall be at least 15 days from the date on which the online platform notifies the business users concerned about the envisaged modifications.

    Prohibition of suspension or termination without cause

    Under Article 4 of the Regulation when intermediation service provider decides to suspend or terminate, in whole or in part, providing its services to a given user company, it shall provide the business user without undue delay, with the motivation for such a decision.

    New avenues for dispute resolution

    Internal complaint-handling system

    Providers of online intermediation services will have to provide an internal complaint handling the complaints from user companies.

    Mediation

    The platforms shall identify in their terms and conditions one or more mediators with which they are willing to engage to attempt to reach an agreement with business users on the settlement, out of court, of any disputes between the provider and the business user arising in relation to the provision of the online intermediation services concerned, including complaints that could not be resolved by means of the internal complaint-handling system.

    The Regulation specifies the conditions that mediators shall met in order to be able to carry out their mission.

    Judicial proceedings by representative organizations or associations and by public bodies

    Organisations and associations which have a legitimate interest in representing user undertakings or entities using a corporate website, as well as public bodies established in the Member States, shall have the right to bring an action before the national courts in the Union, in accordance with the rules of the law of the Member State in which the action is brought, with a view to putting an end to or prohibiting any infringement, by providers of online intermediation services or on-line search engines.

    Coming into force

    As it is announced by The European Commission, the new rules will apply 12 months after its adoption and publication, and will be subject to review within 18 months thereafter, in order to ensure that they keep pace with the rapidly developing market. The EU has also set up a dedicated Online Platform Observatory to monitor the evolution of the market and the effective implementation of the rules.

    Online platforms regardless of your size, start drafting your new terms and conditions!