German Limited Liability Company: Structure of a GmbH

19 Ottobre 2016

  • Germania
  • Diritto societario

There are three bodies in a Swiss corporation, namely: the general meeting of shareholders (the supreme body), the board of directors and the auditors.

Shareholder’s meeting

The general meeting of shareholders is the supreme authority of the company and is composed of all shareholders. There are two types of meetings:

  • Ordinary general meeting. This is held annually within six months after the close of the business year;
  • Extraordinary general meeting, which is called as often as considered necessary.

The general meeting of shareholders has the right to adopt and amend the articles, to appoint directors and auditors, to approve the financial statements and the directors’ report, to ratify certain decisions of the Board, and, in general, to make all important decisions which are not delegated to any other body. The shareholders must also approve the proposal of the Board relative to the distribution of annual profits. A general meeting is called by the board or, if it fails in its duties, by the auditors. One or more shareholders, representing together at least 10 % of the share capital, may at any time request the calling of an extraordinary shareholders’ meeting. This must be done in writing, indicating the purpose of the meeting. In general, a simple majority of votes represented at the general meeting is sufficient to pass a resolution and hold elections. However, certain decisions require a vote of two thirds of the votes represented and the absolute majority of the· par value of the shares represented (such as change of corporate purpose, extension of scope of business, distribution of shares with privileged voting rights etc.).

Shareholders cannot be deprived of their acquired rights without their consent. The term acquired rights includes the right to vote, to dividends, to a share of the liquidation proceeds and to receive sufficient information on the financial condition of the company. The Swiss Code distinguishes two kinds of shareholders rights: financial interests and personal membership rights.

Each shareholder has the right to a proportionate share of the profits distributed. Dividends may only be paid out of net profits or out of reserves specially created for this purpose. There is no interest payable on the ordinary share capital and a company may not declare interim dividends out of current year profits. Dividends can only be declared by the general meeting of shareholders and after attribution to the legal reserve. A share of the net profits may be paid to members of the board of directors if:

  • the articles specifically provide for such payments,
  • the allocations to the legal reserve fund have been made and,
  • a dividend of at least five percent has been paid to the shareholders.

Unless otherwise stated in the articles or in the resolution for the increase in share capital, each shareholder has an option to subscribe to new shares in the same proportion that his original holding bears to the total shares issued.

Each shareholder is entitled to a proportionate share of the proceeds of liquidation unless the articles of incorporation provide otherwise. The proceeds are calculated in proportion to the amounts paid in on the share capital.

Most personal membership rights are acquired rights which means that even with the general meeting’s consent, the shareholder cannot be deprived thereof. These include the following:

  • Shareholders exercise their rights at the general meeting of shareholders. Every shareholder may attend the meeting in person or be represented by his proxy. A holder of bearer shares is considered authorized to attend if he presents the share. On the other hand, registered shares can only be represented if a written proxy is produced.
  • Voting rights.
  • Shareholders are entitled to review the financial statements, which must be available for inspection at the address of the company not later than 20 day prior to the annual general meeting. Any shareholder may request a copy to be sent to him before the meeting.

Board of Directors

The company is managed by the board composed of one or more individual directors who must be shareholders. A majority of board members must be Swiss citizens residing in Switzerland.  If the board consists of a single member, he or she must be a Swiss citizen residing in Switzerland. The directors are elected at the general meeting for a period fixed by the articles (maximum six years). The directors can however be re-elected indefinitely.

The articles may require that during their term of office they must deposit a certain number of shares at the corporation’s registered domicile. This is designed to protect the corporation against damages that directors may cause in the fulfilment of their duties. The board can delegate part of its authority to either an executive committee or to individual directors, to officers or to agents. At least one director must have power and authority to represent the company. The board designates the individuals authorized to represent the company vis-a-vis third parties and determines the details concerning the signatory powers. The company is unrestricted in the selection of its executive personnel, such as managers and officers, although managers and employees of foreign nationality require a permit to take up residence and employment in Switzerland.

The board is responsible for the preparation of the general meeting. It gives the necessary instructions to the management for the proper conduct of the company’s business and supervises those authorized to act on behalf of the company. It is the primary responsibility of the board, although generally delegated to management, to keep the accounting records and to prepare the annual financial statements. Furthermore, the board must submit a written annual report on the company’s financial position and the results of its activities to the general meeting of shareholders.

Auditors

The general meeting of shareholders elects one or more independent auditors who may be individuals or legal entities. Auditors must be professionally qualified to fulfil their duties. At least one auditor must have his domicile, registered office, or a registered branch in Switzerland. The auditors may not serve as directors nor be otherwise employed by the company, nor may they assume managerial functions for the company. Auditors may be elected for a maximum period of three years. Re-election is possible.

Auditors must have special professional qualifications if the audited entity:

  • has outstanding bond issues;
  • has shares listed on a Swiss stock exchange;
  • exceeds two of the following parameters in two consecutive years:
  • Balance sheet total: CHF 20’000’000
  • Revenues: CHF 40’000’000
  • Average number of employees: 200

The auditors must report on whether the accounting records and the financial statements, as well as the proposal concerning the appropriation of the available profit, comply with the law and the articles of incorporation. If the auditors, in the course of their examination, find violations either of law or of the articles, they report this in writing to the board of directors and, in important cases, to the general meeting of shareholders. In the event of obvious over-indebtedness, the auditors must notify the judge if the board fails to do so. Auditors are liable to the shareholders and creditors for damage caused by intentional or negligent failure to perform their duties. The auditors are required to attend the general meeting of shareholders.

The Bolivarian Republic of Venezuela (“Venezuela” or the “Republic”) is one of the largest Latin American economies, given its status as one of the world’s largest oil producers and exporters.

Over the last few years, however, the Venezuelan Government has nationalized a number of businesses in the telecom, power, oil, oil service, bank, and several other industries. The Government has also imposed price controls on many core goods and significant exchange control restrictions that limit the ability to purchase foreign currency.

Despite all these setbacks, Venezuela continues to be a country with significant business opportunities for foreign investors willing to assume risks.

The business environment

Venezuela has the fifth largest proven oil reserves in the world (and the largest in the Western Hemisphere), and the second largest proved natural gas reserves in the Western Hemisphere. If we include an estimated 235 billion barrels of extra heavy crude oil in the Orinoco Belt region, Venezuela holds the largest hydrocarbons reserves in the world. PDVSA, Venezuela’s oil and gas state-owned company, is one of the world’s largest oil companies: they have acknowledged that significant additional foreign investment would be required to achieve its production goals. The Government has signed joint venture agreements for the development of oil and gas projects with international partners from China, India, Italy, Japan, Russia, Spain, the United States of America, and Vietnam among others. All of this creates enormous business opportunities for companies in the oil and gas sector.

The Venezuelan market is also a significant source of profits for several multinational consumer-products makers operating in the country since Venezuelans spend a relatively high proportion of discretionary income on personal products and services, beverages and tobacco, apparel, communications (mobile and smartphones), TV and electronic products. In the next few years, imports are expected to increase much faster than exports with the expansion of consumer demand and the decreasing in the national production of consumer goods.

Venezuela has signed economic cooperation treaties with several countries, including Brazil, China and Russia, providing an adequate framework for investments in projects by companies from such countries.

Venezuela is also a party to international treaties to avoid double taxation with several countries that protect investors against certain changes in tax legislation and is a party to bilateral investment treaties with several European, Latin American and Asian countries, which provide for adequate compensation in case of expropriation or nationalization and access to international arbitration in a neutral forum. Despite Venezuela’s withdrawal from the International Centre for Settlement of Investment Disputes, several of the existing bilateral investment treaties permit arbitration under the UNCITRAL Arbitration Rules and the ICSID’s Additional Facility rules. In certain cases, the Venezuelan Government has reached agreements with foreign investors in businesses subject to nationalization and has paid compensation in U.S. dollars.

The Venezuelan government has engaged in infrastructure and other strategic projects with foreign investors under contracts providing for payments in foreign currency and, in certain cases, for international arbitration to settle potential disputes.

Venezuela is divided into three levels of government:  the national level, the state level and the municipal level.  There are 23 states, a capital district and various federal dependencies, and each state is divided into several municipalities.  The political structure of Venezuela is governed by the Constitution of 1999, as amended in February 2009.

At the national level, the government is divided in the executive, legislative, judicial, civic and electoral branches.  The President of Venezuela (the “President”) is the head of state, head of the national executive branch, and the commander-in-chief of Venezuela’s armed forces.  All executive powers are vested in the President.  The President is also entitled to veto laws passed by the National Assembly.

The national legislative power is vested in the Asamblea Nacional or National Assembly.  The National Assembly has only one chamber, and its members (diputados) are elected by universal suffrage for terms of five years, and may be re-elected for unlimited five-year terms.  The National Assembly is empowered to enact laws, which require the promulgation of the President and its publication in the Official Gazette to become effective.  The work of the members of the National Assembly is done through several Commissions and Sub-Commissions.

The judicial branch is vested in the Venezuelan Supreme Tribunal (Tribunal Supremo de Justicia) and various lower tribunals.  The Supreme Tribunal is the final court of appeals.  It has the power to void laws, regulations and other acts or decisions of the executive or legislative branches that conflict with the Constitution or the laws.  The current number of justices of the Supreme Tribunal is 32.  Justices of the Supreme Tribunal are appointed by the National Assembly for twelve-year terms

The Supreme Court has five chambers, the Constitutional Chamber, the Social Cassation Chamber, the Civil Cassation Chamber, the Criminal Chamber, Electoral Chamber and the Political-Administrative Chamber.  Each Chamber is composed of three justices, except for the Constitutional Chamber which is composed by five.

The Venezuelan court system is a national system; there are no state courts, but there are national courts sitting in each respective state.  Judges are appointed by the Supreme Court.  The jurisdictions of courts are divided by subject matter: civil, commercial, labor, tax, administrative, criminal and family, among others.

Venezuelan courts are generally biased in favor of the Venezuelan government (the Republic or Venezuelan state-owned companies); therefore, it would be very difficult to win a case against the Venezuelan government in a Venezuelan court. In addition, bringing judicial proceedings against the Venezuelan government may have adverse effects on the business of the claimant and on its ability to be awarded further projects or contracts from the government.

At the state level, the government is divided in the executive and legislative branches.  The executive branch of a state is in charge of its governor (gobernador) elected by universal suffrage within each state.  State legislative power is vested in state assemblies whose members are also elected by universal suffrage within each state.  States have virtually no taxing power but they may create taxes on non-precious metals and minerals that are not reserved to the State.

At the municipal level, the government is divided in the executive and legislative branches.  The executive branch of a municipality is in charge of its mayor (alcalde), elected by universal suffrage within each municipality.  Municipal legislative power is vested in municipal assemblies (consejos municipales) whose members (concejales) are also elected by universal suffrage within each state.  Municipalities are empowered to levy business tax on gross income and to approve construction projects in cities and other population centers.

 

The author of this post is Fulvio Italiani

Un imprenditore straniero che voglia intraprendere un’attività commerciale in Belgio potrà scegliere tra tutte le forme societarie previste nel Codice delle Società belga. In quest’articolo verranno esaminate in maniera schematica le tre modalità di accesso nel mercato belga più comuni.

In primis la forma più semplice è quella della succursale (1), ossia una nuova entità che opererà nel territorio belga come filiale della società madre.

Nel caso in cui l’imprenditore voglia costituire una nuova società, la scelta normalmente ricadrà fra le due tipologie maggiormente utilizzate: Société anonyme (2) o Société privée à responsabilité limitée (3).

1.    Succursale

Le società che sono state costituite all’estero e che all’estero hanno la loro sede principale possono operare in Belgio e stabilirvi una succursale (art. 58 Codice delle società).

La succursale è stata definita dalla giurisprudenza belga come “un centro di operazioni che si manifesta all’esterno, in maniera stabile, come un’estensione della casa-madre (maison mère), ma comunque in grado di poter negoziare autonomamente con i terzi”.

Requisiti di forma

Gli artt. 81 e 82 del Codice delle società indicano quali sono i documenti necessari:

  • atto costitutivo;
  • la denominazione e la sua sede;
  • la decisione di aprire la succursale presa dall’organo abilitato a farlo nella società estera;
  • gli ultimi bilanci annuali.

Tutti questi documenti dovranno essere tradotti (con una traduzione giurata) in una lingua ufficiale belga (francese, olandese, tedesco) e depositati presso la cancelleria del tribunale del commercio territorialmente competente.

Legalizzazione ed Apostilla

In determinati casi questi documenti dovranno essere legalizzati (légalisés), vale a dire che occorrerà una certificazione della loro “provenienza” da parte di un organo competente.

Sono esentati da legalizzazione, in quanto sostituita dalla forma semplificata delle apostille, gli atti provenienti dagli Stati contraenti della Convenzione de L’Aja del 5 ottobre 1961.

Per quanto riguarda le società italiane che intendano aprire una succursale in Belgio, non sarà più necessario procedere alla legalizzazione degli atti pubblici o all’apposizione di apostille in virtù della Convenzione di Bruxelles del 25 maggio 1987, la quale ha soppresso ogni forma di legalizzazione o qualsiasi altra formalità equivalente tra gli Stati che l’hanno ratificata.

Conoscenze di base e capacità imprenditoriali

Per provare il possesso delle conoscenze di base occorre un documento che attesti:

  • una conoscenza della gestione di base;
  • la partecipazione ad un corso di gestione;
  • il possesso di un titolo di studio abilitante all’insegnamento superiore o universitario.

Per dimostrare l’esistenza ed il possesso di queste capacità di gestione imprenditoriale ci si può avvalere delle disposizioni contenute nella direttiva europea 2005/36 (artt. 17 e 19) relativa al “riconoscimento dei titoli e delle qualifiche professionali ottenuti all’estero”, attraverso una dichiarazione di competenze rilasciata dagli enti preposti all’interno dello Stato membro di origine.

Regolamento Bruxelles I bis

Il regolamento europeo “Bruxelles I bis”, applicabile alle controversie in materia civile e commerciale, dispone che le società che hanno la loro sede nel territorio di uno degli Stati membri dell’UE possono essere convenute nel tribunale del luogo in cui esse hanno stabilito una succursale se la controversia concerne l’esercizio di questa succursale (art. 7 n. 5 Bruxelles I bis).

2.    S.A. (Société anonyme)

La SA è definita nel Codice delle società come quella nella quale “gli azionisti non si impegnano che per un ammontare determinato” (art. 437).

Dal 1984 è possibile che la costituzione di una SA avvenga per mezzo dell’accordo di due persone fisiche o giuridiche (fino a questa data erano necessarie sette persone!).

Numero soci

2 soci, nessun limite massimo

Capitale minimo

€ 61.500

Liberazione del capitale

Il capitale versato deve essere pari ad almeno € 61.500.

Inoltre ogni azione deve essere liberata per almeno ¼ del suo valore e le azioni che corrispondono a dei conferimenti in natura dovranno essere interamente liberate entro 5 anni dalla costituzione.

Modalità di costituzione

Atto pubblico a pena di nullità e deposito presso la cancelleria del tribunale. È inoltre necessaria la  redazione di un piano finanziario relativo ai primi 2 anni.

Responsabilità dei soci

Limitata alla propria partecipazione.

Titoli

Azioni e obbligazioni:

  • i titoli possono essere nominativi o dematerializzati;
  • in caso di emissione di azioni nominative occorre tenere un registro delle azioni.

Circolazione dei titoli

La libera circolazione è obbligatoria. Limitazioni statutarie:

  • clausola di gradimento;
  • clausola di vendita (prelazione);
  • clausola di inalienabilità (sempre per un tempo determinato).

Organi

Consiglio di amministrazione:

  • minimo 3 amministratori e 2 in caso di due soli soci (persone fisiche o giuridiche);
  • nominato dall’assemblea generale al massimo per 6 anni.

Assemblea generale dei soci:

  • ordinaria: una volta per anno;
  • straordinaria: in caso di modifiche allo statuto.

3.    S.P.R.L. (Société privée à responsabilité limitée)

Ai sensi degli artt. 210 e 211 Codice delle società, la SPRL può essere definita come una società:

  • costituita da una o più persone (dal 1987 la costituzione di una SPRL può avvenire per atto unilaterale);
  • i cui soci sono responsabili limitatamente al valore dei loro conferimenti;
  • i cui conferimenti possono essere sia in denaro sia in natura (intendendo per conferimento in natura qualsiasi bene suscettibile di valutazione economica).

L’art. 210 CS vieta espressamente l’appello al mercato per collocare quote o obbligazioni di una SPRL.

Numero soci

2 soci, nessun limite massimo. È possibile costituire una s.p.r.l.u. (unipersonale) con un solo socio.

Capitale minimo

Capitale da sottoscrivere e da liberare:

  • € 18.550 capitale minimo; deve essere integralmente sottoscritto,
  • € 6.2000 capitale da liberare (€12.400 nelle s.p.r.l.u.),
  • p.r.l. starter: € 1 capitale minimo.

In caso di conferimenti in natura:

  • rapporto di un revisore di impresa (valutazione),
  • rapporto dei fondatori (interesse dell’impresa).

Modalità di costituzione

L’atto costitutivo dovrà essere redatto nella forma dell’atto pubblico:

  • deve essere depositato in cancelleria entro 15 giorni,
  • i fondatori devono presentare un piano finanziario relativo ai primi 2 anni.

Responsabilità dei soci

Limitata alla propria partecipazione.

Titoli

Quote sociali (titoli nominativi) + la possibilità di emettere obbligazioni: tutti i trasferimenti dovranno essere annotati nel registro dei soci tenuto presso la sede sociale.

Circolazione dei titoli

Occorre l’approvazione della metà dei soci che detengano almeno i ¾ del capitale. L’approvazione non sarà necessaria quando il trasferimento avviene a favore di un altro socio, di un parente del socio cedente o di una persona preliminarmente approvata in statuto.

Lo statuto potrà contenere norme maggiormente restrittive.

Organi

Amministrazione:

  • Amministratore (1 o più, soci e non);

Assemblea generale:

  • ordinaria: almeno una volta all’anno;
  • straordinaria: in caso di modifiche allo statuto.

L’autore di questo post è David Diris.

For purposes of conducting business in Argentina, a foreign investor may either incorporate a company under one of the types provided for by the Argentine Companies Law (“ACL”) – subsidiary – or it may set up a branch of its company and appoint a representative thereto. Foreign investors normally elect to set up a subsidiary under the type of Corporations (Sociedades Anónimas “SA”) or Limited Liability Companies (Sociedades de Responsabilidad Limitada “SRL”), for both cases the foreign investor’s liability is limited to the stock capital amount invested in the subsidiary. This first post will summarize the SRL main characteristics.

Foreign investors infrequently prefer the branch structure, as (unlike corporations and limited liability companies) branches do not enjoy limited liability. Branches are not considered to be a separate entity from their parent companies, and therefore, all such acts carried out by the branches are considered as directly performed by the parent company itself. This implies that foreign entities are fully liable for all the transactions carried out by their branches. Both legal structures (subsidiaries and branches) require the foreign investor to be registered with the Public Registry of Commerce in Argentina.

Main characteristics of the Argentinian Limited Liability Companies: las Sociedades de Responsabilidad Limitada (SRL)

Registration and by-laws: No more than 50 quotaholders are permitted in the limited liability companies.

Capital Limited liability companies: No minimum capital is required to form a limited liability company. As in the case of the corporations, the corporate capital must be proper to the development of the corporate purpose and the Public Registry of Commerce may request the companies to fix an amount higher than the one decided by the partners. At least 25% of the capital must be paid up at the time of formation and the remaining 75% must be contributed within a term of two years as of that moment.

Liability SRL: The liability of the quotaholders is limited to the amount of the capital invested. The sole limitation to this rule is the “lifting of the corporate veil” doctrine, applicable when companies have been organized or used with fraudulent purposes, abusing of the right to organize such separated legal person.

Legal Books and Records SRL: Only a Book of Meetings of Managers and Quotaholders is required.

Management SRL: Are managed by managers who may be appointed indefinitely. Managers are not required to be Quotaholders and also the majority must be resident in Argentina. Managers have the same rights and obligations as directors of corporations.

Supervision SRL: the appointment of a syndic is optional unless the capital is more than AR$ 10,000,000, in which case one or more syndic must be appointed.

Quotaholders’ Meetings SRL: Corporate resolutions are adopted by a partners’ resolution as set forth in the act of incorporation. At least one Ordinary Quotaholders’ Meeting must be summoned annually to consider the financial statements, the managers’ report, allocation of profits, and appointment of managers and statutory auditors as basic subjects. Amendments of the by-laws, should a sole partner represent the majority vote, require the vote of another partner.

Financial statements, Balance Sheets and Accounts SRL: Annual financial statements must be submitted for the consideration of the Quotaholders’ Meeting. Same must be filed with the Public Registry of Commerce only if the capital exceeds the amount of $ 10,000,000.

The author of this post is Tomás García Navarro.

Founders

At least one founder (either individual or legal entity) is necessary to form a corporation. Founders and shareholders are not subject to any nationality or residence requirements. Directors must be shareholders and at least one director must be resident in Switzerland. Another restriction relates to the acquisition by non-resident aliens of shares in a Swiss company whose assets consist mainly of Swiss real estate: these transactions are subject to prior authorization. Prior authorization is further required for non-residents to own and operate a Swiss bank, or to acquire an existing Swiss bank.

Articles of incorporation

Articles of incorporation must have the following minimum content:

  • the company name and address;
  • the business purpose of the company;
  • the amount of share capital and the contributions made thereto;
  • the number, par value and type of shares;
  • the calling of the general meeting of shareholders and the voting rights of the shareholders;
  • the naming of the bodies which take care of the management and the auditing of the company;
  • the form in which the company must publish its notices.

Optional clauses are those which must only be listed if founders intend to adopt additional provisions, such as the directors’ participation in the net profits, the issue of preferred shares, the delegation of directors’ authority, the issue of authorized capital or conditional capital.

Founders report

The founders must provide a written statement giving particulars of the nature and condition of contributions in kind or proposed acquisitions of assets, and the appropriateness of their valuation. A founders’ statement is also required when the capital of a company shall be contributed by conversion of shareholder loans and advances. The auditors have to review the founders report and confirm in writing that it is complete and truthful.

Raising of Funds

After subscription to all shares of capital stock, a minimum of 20% of the par value but not less than CHF 50,000 must be placed in escrow with a bank. The funds may only be released to the management after the company has been registered in the Commercial Register.

Incorporation Meeting

The corporation is formed at the incorporation meeting, which is held in the presence of all the shareholders and a public notary. This latter declares that the capital stock is fully subscribed and that the minimum payments have been made. Thereafter, the shareholders adopt the articles of incorporation and appoint the bodies corporate (board of directors, auditors etc.). Finally, a notarised deed must be drawn up recording the resolutions of the general meeting.

Registration

After incorporation, the company must be registered with the Commercial Register. This registration is published in the Swiss Official Gazette of Commerce. It discloses details such as the purpose of the company, its seat, the names of the shareholders (unless they opted for issuing bearer shares) and the names of the directors. Only at the time of registration the company acquires legal entity status. Shares may not be issued prior to registration.

Upon formation, a one-time federal stamp duty of 3% is due on the capitalisation of the company. This stamp duty is assessed on the price at which the shareholder buys the shares. Any premium above par value is also subject to this duty. Furthermore, there are registration and notary fees and, generally, fees due to agents who act as founders to the new entity.

Corporate Name

The corporation is registered under a firm name, which must be distinguished from those of all other corporations already existing in Switzerland. In principle, the corporation is free to choose any kind of name. The name may not however be misleading or otherwise untruthful. The use of national or territorial designations is not permitted unless specifically authorized by the Federal and Cantonal Registers of Commerce. If a personal name is used, a designation showing the corporate nature must be added.

Share Capital

A public company is required to have a minimum capital of CHF 100,000 divided into shares with a minimum face value of CHF 0,01, while a limited liability company is required to have a minimum capital of CHF 20,000.  In the case of a public company, all shares must be subscribed at the time of formation. Capital contributions may be in cash or in kind. If the contribution is made in kind, the company must have access to such assets immediately after registration in the Commercial Register. The articles must describe the property, its value, the shareholder from whom it is received and the number of shares issued in return. The acceptance by the company of contributions in kind requires the approval of at least two thirds of the shares represented at the incorporation meeting.

The general meeting of shareholders may authorize the board to increase the share capital within a period of 2 years. It is within the competence of the Board to decide if, when, and to what extent, the capital should be increased.

The general meeting may provide in the articles for a conditional capital increase. The purpose of issuing conditional capital is, alternatively, to secure options and conversion rights in connection with warrant issues or convertible bonds, or to create employee shares. The increase of capital takes place at the same time, and to the same extent, as the exercise of the respective rights.

Different Types of Shares

Swiss corporation law distinguishes between the following categories of shares:

  • Bearer shares – Bearer shares may not be issued until the full issue price has been paid in. They are transferable by delivery and the corporation cannot restrict their transfer. Bearer shares are very popular in Switzerland because many owners prefer to protect their identity.
  • Registered shares – Registered shares are subscribed as called by the corporation and do not need to be fully paid in on issue. They are transferable by endorsement or assignment, generally without restriction. The company must keep a share ledger listing the owners’ names and places of residence. The entry must be certified on the share certificate by the Board. The buyer of incorrectly transferred registered shares cannot exercise personal membership rights. The articles may provide for subsequent conversion of registered shares into bearer shares and vice versa.
  • Restricted transferability of registered shares – To prevent unfriendly takeovers, the articles may provide for restrictions on the free transferability of shares. By law those restrictions are however limited.
  • Preferred shares – The general meeting of shareholders is entitled to issue preferred shares or to convert existing common shares into preferred shares. The holders of preferred shares enjoy certain preferences such as cumulative or non-cumulative dividends, priority in the proceeds of liquidation and a preferential right to subscribe to new shares. This preferential treatment must be provided for by the articles or be adopted by the votes of at least two thirds of all shares represented.
  • Voting shares – In general, each share is entitled to one vote. Since shares of differing value may be issued, each vote may not represent the same amount of capital contribution. Voting shares, therefore, provide those shareholders who represent a financial minority with the decision making power within the corporation. The issue of voting shares is permitted in the ratio of 1 : 10 to ordinary shares.
  • Profit sharing certificates – The general meeting of shareholders can issue profit sharing certificates in favour of persons who have an interest in the company through previous capital contributions, shareholdings, creditors’ claims, employees, or similar relationships. Profit sharing certificates may grant rights to a share in profits, a share in the liquidation proceeds or rights to subscribe to new shares. They do not procure any membership rights. By law, profit sharing certificates must not have a par value nor be issued in exchange for contributions characterized as assets.
  • Certificates of participation – The certificate of participation is a non-voting share, with the holder of such certificates having basically the same status as shareholders apart from the right to vote. The participation capital must not exceed double the share capital. Companies have until June 30, 1997 to comply with this requirement unless their participation capital was more than double the share capital on January l, 1985.

There are two ways to enter and do business in the Dominican Republic: By establishing a separate Dominican business entity (“subsidiary”) or by registering a branch of a foreign company (“branch”). In addition, business relationships may be set up under a commercial contract in form of a joint venture, agency, distribution or similar agreements that comply with Dominican Republic legal and regulatory requirements, for the recognition and validity of business entities and commercial agreements.

Another option consists of a Consortium agreement between foreign and Dominican companies intended to execute projects in which the Dominican State participates.

ESTABLISHING A DOMINICAN SUBSIDIARY

Usually start-up and medium business entities in the Dominican Republic are incorporated as a Limited Liability Company or Sociedad de Responsabilidad Limitada (S.R.L.). The Sociedad de Responsabilidad Limitada or S.R.L. is the most common and efficient form of organizing a company in the Dominican Republic and is often chosen by large foreign companies as the legal form for their subsidiaries.

S.R.L.’s offer the following advantages: The partners receive limited liability, meaning that they only respond for company debts up to the limit of their contributed capital. Shareholders can be legal persons or individuals. SRL’s is manager managed with no board of directors required; managers must be individuals, and can be Dominicans or foreigners. Company can attract capital through the issuing of new shares which may be ordinary or preferred shares.

SRL’s may effectuate any type of activities that are legal in trade and there are no restrictions in the Dominican Republic on the legal currency. The United States Dollar is exchanged freely with the Dominican Peso, as well as any other currency.

SRL’s also serve as a holding company and may keep assets as their property, contributed by the partners or acquired by the same, both national and international, movable and real estate properties.

SRL can outlive their founders. Their quotas may be freely transferred among partners, by way of succession, in case of liquidation of marital community assets, among ascendants and descendants under the rules established in the By Laws.

The main steps in establishing a Dominican Limited Liability Company (SRL) are the following:

  1. Make a search before the Dominican Trademark Office, draft and file the request registration to obtain a trade name for the Dominican Company.
  2. Draft by-laws, minutes of incorporation meeting and related incorporation documents. These may be drafted as private documents or as a notary public act for signing by the partners and managers for legalization by notary public;
  3. Pay the incorporation taxes of one percent (1%) of the company’s registered capital before the corresponding Dominican Tax Administration (DGII);
  4. Prepare the business register application and file it along with the corresponding company incorporation documents after payment of business registration fee to obtain the company’s business registration certificate;
  5. Prepare and file the request to obtain the company’s Tax Identification Number (RNC);
  6. Register at DGII’s web page to obtain access and request fiscal invoice numbers (NCF);
  7. Enroll employees before the treasury of social security (TSS) and the ministry of labor.

The following schedule serves as a guidance of the time required to form a new Dominican Company:

Register of company trade name 5 to 7 days
Drafting incorporation documents plus 2 to 5 days
annexes (Incorporation Meeting, By-laws, Business Register application)
Paying incorporation taxes on capital less than 1/2 day
Incorporation Meeting of shareholders less than 1/2 day
Legalizations by Notary Public less than 1/2 day
Registration in Business Register 2 to 5 days
Registration as Tax Contributor (RNC) 10 to 15 days

The following founding documents are needed to form the company:

  1. Business Register request of registration form for Dominican Company, duly signed by the person that is authorized by the company or by an empowered attorney, for which a copy of the power of attorney shall be provided.
  2. By- Laws/Articles of Incorporation in private or notary act form containing the details required in legislation (including company name, registered domicile and purposes.
  3. Attendance List and Minutes of the Incorporation Meeting.
  4. Updated List of Partners/ Shareholders
  5. Report of the Commissary of Contributions, if applicable.
  6. Receipt of payment of the tax on the incorporation of legal entities.
  7. Photocopies of the Dominican Identity and Electoral Card and if foreign, Passport photo page or other official document with visible photo from the country of origin for the partners, managers and account commissary.
  8. Copy of the Trade Name Certificate issued by the Dominican Trademark Office.
  9. Declaration of acceptance of the appointments by the managers if this is not apparent from the by-laws and minutes of the incorporation meeting.

REGISTERING A DOMINICAN BRANCH

Foreign companies interested in doing business in the Dominican Republic (DR) may register a branch in the DR. Under Dominican law, a registered foreign company branch office can enter into contracts and execute and settle transactions in its own name, and can sue and be sued at its place of business.

In order to successfully complete a DR branch registration, the foreign company documents shall prove its valid incorporation and existence, contain all general and specific information as well as proper authorizations; corporate documents shall be certified, notarized and duly legalized by all applicable foreign and local authorities according to local and international law. The Dominican Republic is a member of the 1965 convention of The Hague or Apostille.

The registration of a foreign company branch before local authorities will enable the owners of the foreign entity to conduct business in a similar way and equal rights as a DR business entity.

Branches of foreign corporations are in general treated the same way as legal entities for tax purposes. They are however not subject to issuance stamp tax upon formation. Profits of a Dominican branch office are exempt from taxation (Dominican withholding tax) in the partner-nation under the double-taxation agreements which Dominican Republic has signed.

To register a branch in the DR, it is necessary to provide certified company incorporation, shareholder and manager verification and a power of attorney to qualified attorneys who will draft, prepare and file the request of branch registration at the business register and request a Taxpayer Identification Number (TIN) in the Dominican Republic.

Usually, the registration of a branch to pursue general, unregulated and taxed commercial activities may be accomplished by pursuing the following:

  1. a) Business Registry: The Company should be registered in the Business Registry of the Chamber of Commerce where its local domicile will be located. A registration fee is calculated based on the authorized capital. In order to obtain this registry, the company must file all documents which evidence its proper incorporation in the home country and that representatives are fully authorized to register the foreign company branch.
  2. b) TIN: Issued by the Tax Administration. It is a number that shall serve for identifying the business’s taxable activities and for the control of the duties and obligations derived therefrom. To obtain such registration, the company shall file copy of the Business Registry and the corporate documentation that may be required by such Tax Administration. It shall also present a valid corporate domicile in the DR which may be subject to verification.

USING DOMINICAN COMMERCIAL AGENTS AND DISTRIBUTORS

A foreign supplier of goods and services may choose to enter the Dominican market by selling his/her products through Dominican agents and distributors or representatives. The different channels of selling are subject to different legal frameworks.

Contracts involving Dominican agents and distributors are generally governed by the Civil Code of the Dominican Republic, whose freedom of contract principle allows the parties to choose freely the form, terms and conditions of their agreement as well as by the Code of Commerce and general commercial practices and rulings interpreting the scope of agency, unless said agreement is registered under Law 173 Protecting Importing Agents of Merchandises and Products of April 6, 1966, as amended (“Law 173”).

Local agents and distributors often want to register their Agreements with foreign enterprises under Law 173, while foreign companies that do not have a free trade agreement with the Dominican Republic, are often unaware of this possibility and without adequate previous legal counsel, may later find out a Law 173 registration has been made.

Once registration has been obtained, the relationship of the local licensee (a.k.a. “concessionaire”) with its grantor becomes governed by the provisions of Law 173 of 1966, which provides the local concessionaire with the following rights:

  • The right to initiate legal actions against the grantor or a third party for the purpose of preventing them from directly importing, promoting or distributing in Dominican Territory the registered products or services of the grantor;
  • The right to file suit for damages against both the grantor and any new appointee for substitution of the local concessionaire, including the right to be indemnified for unjust termination in accordance with the formula and for the concepts provided by Article 3 of Law 173.
  • The right to an automatic renewal of the contract or a mandate of continuation of the relationship existing thereof, even if the termination clause of a registered contract provides otherwise.
  • Unilateral termination by the grantor of the local concessionaire’s rights under Law 173 of 1966 is only possible if made for a “just cause”, pursuant to the definition of just cause provided by Law 173 of 1966.
  • The Law provides exclusive jurisdiction to the courts of the Dominican Republic.

Law 173 protects Dominican agents and distributors of foreign enterprises. Its objective is to protect exclusive and non-exclusive agents, distributors and representatives from being unilaterally substituted or terminated without just cause by foreign entities, after favorable market conditions have been created for them in DR.

Law 173 defines as grantor the individuals or legal entities who the Dominican agents and distributors (i.e. concessionaires) represent, who conduct business activities in the interest of the grantor or of its goods, products or services, whether the contract is granted directly by grantor, or by means of other persons or entities, acting in grantor’s representation or in their own name but always in its interest or of their goods, products or services.

The author of this post is Felipe Castillo.

Companies are the most common vehicles for business and investment activity whether in Cyprus or abroad.

Types of companies

Under the Companies Law. Cap. 113 as amended (the “Companies Law”), there are two types of companies:

  • Companies limited by shares, and
  • Companies limited by guarantee (with share capital or without share capital)

Companies limited by guarantee are often employed for non-profit or charitable purposes whereas companies limited by shares for business purposes.

The latter may be either private companies or public companies. A private limited liability company must have at least one shareholder but no more than fifty whereas a public limited liability company must have a minimum of seven shareholders and there is no ceiling as to maximum number. The shareholders of a company may be either natural persons or legal persons (Cypriot or foreign). Shares cannot be issued to the bearer.

Liability of shareholders

Companies are separate legal entities distinct from their members. They have a separate corporate personality and are responsible for their obligations and debts. The liability of the shareholders in companies limited by shares (private or public), is limited to the nominal value of the shares agreed to be taken up or to an amount above the nominal value if the shareholder specifically agreed to subscribe to the shares at a premium. In the case of companies limited by guarantee, the liability of the shareholders is limited to the amount each shareholder agrees, at subscription, to contribute towards the debts of the company in the event of liquidation.

Share Capital

There is no restriction as regards the minimum or maximum share capital of a private company. But there is a minimum share capital requirement of €25629.02 in the case of public companies. Information as regards the initial authorised and issued share capital of the company is included in the memorandum of association and any subsequent changes must be notified to the Registrar of Companies.

The share capital may be paid in cash or in kind.

 Transfer and allotment

The transfer of shares in a company is not restricted by law. It is however possible and common for restrictions e.g. right of first refusal to be included in the articles of association of the company. In such cases any transfer of shares must be made in compliance with the relevant provisions of the constitutional documents (see below).

On an allotment of new shares of a public company, the company is obliged to offer shares to existing shareholders pursuant to pre-emption rights provided as mandatory rules in the statute. In the case of a private company there is not such statutory duty and therefore it depends on whether pre-emptions rights and relevant obligations on the part of the company have been provided for in the articles of association.

All allotments of new shares and transfers of shares must be notified to the Registrar of Companies.

 The Directors and Secretary

The directors of the company, acting collectively as a board, manage the business of the company and do all decision making to the extent not reserved for the general meeting of the shareholders.

A private company needs to have at least one director whereas a public company must have at least two. There is no statutory restriction as to the maximum number of directors but the articles of association of the company may provide limitations. The directors of the company may be natural or legal persons (Cypriot or foreign). The proceedings of the board of directors and its composition are very important elements for the tax treatment of the company (see below).

All companies are required to have a secretary. The duties of the secretary are mainly of an administrative nature.

 Registered office

The company must have a registered office in Cyprus. All communications and notices may be addressed to the company at the registered office and any document, whether official or otherwise, may be served to the company at its registered office.

 Incorporation documents

The memorandum of association is the document which sets out important information in relation to the company; such information might be relevant for third parties e.g. potential counterparties, creditors etc.. The memorandum of association must state:

  • the name of the company;
  • the place where the registered office is situated;
  • in the case of a public company, the fact that it is such a company;
  • the objects of the company;
  • a statement that the liability of its members is limited and the amount to which such liability applies;
  • the names of the subscribers to the memorandum of association and the number of shares each of them takes up.

Following the registration of the company, the memorandum of association may be amended with the approval of the court.

The articles of association is the document regulating internal matters as regards the operation and management of the company and the rights of the members e.g. the procedures to be followed in general meetings, requirements for the adoption of resolutions, the voting rights of members, the conditions and manner in which shares are to be transferred, rights and duties relating to put or call options, rights and duties relating to tag and drag along rights, the appointment and removal of directors etc. The articles of association may be amended by a relevant decision of the members of the company.

Together with the memorandum of association, the articles of association form the constitutional documents of the company and constitute basically an agreement between all and each of the members of the company to abide to their provisions.

 Registration

Establishing a company requires registration with the Registrar of Companies, the governmental office competent for matters relevant to the registration of companies and their ongoing obligations with regard to information that must filed pursuant to the Companies Law. The Registrar of Companies is responsible for keeping a relevant file which is available to the public for inspection.

The initial step in the formation of a company is the approval of the proposed name by the Registrar of Companies. Subsequently, the memorandum of association and articles of association of the company must be filed accompanied by the necessary forms which indicate the registered office, the details of the director(s) and secretary and an affidavit of the lawyer in charge of the registration of the company. Usually it takes approximately seven to fifteen working days for the completion of the registration of a company. A shelf company i.e. a ready-made company may be purchased if there is an immediate need for the use of a company. Following registration of the company, the Registrar of Companies issues a certificate of incorporation which constitutes conclusive evidence that all the requirements of the Companies Law, in respect to registration and matters precedent and incidental thereto, have been complied with.

Financial statements

Financial statements must be prepared annually and be duly audited by qualified accountants practising in Cyprus according to the International Financial Reporting Standards. Annual returns containing information as to any changes to directors, secretary, shareholders, authorised, issued or paid up capital, registered office, mortgages/charges and other related matters must be filed with the Registrar of Companies once per year accompanied by a copy of the financial statements.

Tax aspects

In order be eligible to benefit from the favourable Cyprus tax regime and treaty network in place, a company should be considered as resident in Cyprus for tax purposes.

Under Cyprus tax law, a company is considered as tax resident in Cyprus if its ‘management and control’ is exercised in Cyprus. There is no statutory definition of ‘management and control’. In practice Cyprus tax authorities would look at several conditions to determine whether a company qualifies as a resident in Cyprus for tax purposes:

  • strategic management decisions and preferably day-to-day decisions being taken in Cyprus,
  • the majority of the board members being tax residents in Cyprus and exercising their  office from Cyprus,
  • an actual office being maintained in Cyprus,
  • evidence of commercial documentation being stored in the company’s office,
  • accounting records being prepared and kept in Cyprus,
  • bank accounts being operated from Cyprus even if maintained with foreign banks.

Not all of the above must be established in order for the company to qualify a tax resident in Cyprus; the conditions would be considered in light of the nature and level of activities of the company and the country in which transactions or investments are made. For the purposes of the Cyprus tax authorities satisfaction of the first two conditions would normally be adequate for the company to be considered as tax resident.

Tax resident companies are subject to income tax on their worldwide income at the flat rate of 12.5% subject to tax credit for any tax suffered in a foreign jurisdiction on income which is also subject to tax in Cyprus.

Companies ought to submit tax returns, together with their annual financial statements, to the Tax Department in compliance with the applicable legislation.

Re-domiciliation

It is possible for corporations from other jurisdictions to acquire a ‘domicile’ in Cyprus. Effectively this means that the company may change its governing law without going through the process of liquidation where it was firstly established and then fresh incorporation in Cyprus.

A company registered in another jurisdiction is eligible to apply to the Registrar of Companies to be registered as a continuing company pursuant to the provisions of the Companies Law if: the foreign jurisdiction allows the re-domiciliation, its constitutional documents provide for it and the steps required for the decision for the re-domiciliation have been complied with. Such companies must have their registered office transferred into Cyprus.

It is also possible for local companies to “re-domicile” moving their registered office in other jurisdictions.

In both cases of ‘re-domiciliations’ the permission of the Registrar of Companies is required and it is generally given upon certain conditions being met.

La sfida dell’imprenditore

Quando un imprenditore decide di internazionalizzare la sua azienda, deve tenere in considerazione diversi fattori prima di prendere una decisione. Al termine dell’analisi, probabilmente si indirizzerà verso uno stato che gli offra sicurezza, stabilità, poche restrizioni e incentivi statali.

Nell’America meridionale, c’è un paese che sta crescendo sistematicamente da 25 anni ed ha contesto estremamente favorevole agli investimenti: il Perù.

Questo paese ha trasformato la sua chiusura economica del passato in un sistema produttivo aperto, con uno sguardo sempre rivolto agli investimenti stranieri. Prima del 1990, questo paese si trovava in una situazione economica recessiva, con un sistemae economico controllato dallo Stato, altissimi livelli d’inflazione, dazi doganali elevati, proibizioni alle monete straniere, grandi differenze tra le aree metropolitane e le province, attentati terroristi e alti livelli di corruzione.

Anche se nel 1990 la situazione di questo paese sembrava irrecuperabile, una nuova classe politica ha saputo rialzare il paese, tracciando la strada per lo sviluppo degli ultimi anni. L’economia è stata rivoluzionata: dazi doganali drasticamente ridotti, sono stati eliminate le limitazioni alle valute straniere e sono state gettate le basi per un’attività economica privata in regime concorrenziale, relegando le partecipazioni Statali a una funzione sussidiaria, senza violare i principi del libero mercato.

Un paese da tenere in considerazione

Mai nella storia repubblicana del Peru ci sono stati oltre 25 anni di crescita, e questo cammino intrapreso non accenna a fermarsi. C’è un generale consenso a favore della stabilità macroeconomica che, associato a politiche fiscali prudenti, ha portato il Perù ad accogliere importanti riserve monetarie internazionali e ridurre drasticamente il suo debito.

Aziende statali hanno lasciato il mercato in favore di imprese private locali e internazionali attraverso privatizzazioni e concessioni, specialmente nel settore delle infrastrutture.

I diversi governi peruviani dal 1990 in poi hanno sottoscritto molteplici accordi internazionali con il resto del monto. Ad oggi, il Perù ha accordi di libero scambio con le principali economie del mondo, tra le quali gli Stati Uniti, l’Unione Europea e la Cina, ed è un promotore attivo dell’integrazione economica, come testimoniato recentemente dall’“Alleanza del Pacifico” formata insieme alla Colombia, al Cile e al Messico.

In Peru è possibile non solo avere conti in valuta locale (Soles), Dollari Americani ed Euro, ma è anche possibile cambiare moneta a tassi di cambio molto competitivi. Investitori stranieri e trader possono importare ed esportare capitali in Perù senza il bisogno di alcun tipo di permesso o autorizzazione da parte dello Stato.

Il paese è cambiato e questa volta la modernità ha raggiunto anche le province, la povertà è stata ridotta da più del 50% all’inizio degli anni ’90 a poco meno del 20%, comportando un’importante crescita della classe media. Il nuovo governo peruviano, che ha iniziato il mandato quinquennale lo scorso luglio, si è impegnato a ridurre ulteriormente questa cifra, portandola sotto il 10%.

L’economia peruviana è abbastanza diversificata. Mentre il settore minerario è storicamente il più importante dell’economia, altri settori stanno crescendo a livelli record: pesca, agricoltura, agro-industria, costruzione, turismo, servizi, etc.

Il Peru si è anche impegnato ad entrare nell’Organizzazione per la cooperazione e lo sviluppo economico (OCSE), che riunisce alle più importanti economie del mondo.

Ciononostante la strada è ancora lunga. Alti livelli di economia informale e un grande deficit nelle infrastrutture rappresentano sì una sfida, ma allo stesso tempo anche una notevole opportunità.

Il quadro normativo

Mentre le normative nei settori fondamentali (fiscale, diritto del lavoro, diritto civile) sono sostanzialmente le stesse dall’inizio degli anni 90’, il governo di Pedro Pablo Kuczynsky ha richiesto al Congresso nazionale la possibilità di legiferare attraverso decreti in 5 materie chiave: lo sviluppo economico, la sicurezza pubblica, in materia di anti-corruzione, riguardo servizi essenziali (come acqua e sanità) e per la riorganizzazione della società petrolifera nazionale (Petro-Peru). Il Congresso peruviano (controllato dal partito di opposizione guidato dalla sig.ra Fujimori) ha approvato la richiesta dell’esecutivo, che ora ha novanta giorni (quindi entro la fine di dicembre 2016) per legiferare in materia.

Nelle prossime settimane analizzeremo i primi provvedimenti governativi, che dovrebbero contenere disposizioni a favore degli investitori stranieri. Attraverso l’analisi di queste nuove norme, proveremo a dare alcuni consigli su come fare affari in Perù, con particolare attenzione agli aspetti legali.

L’autore di questo articolo è Frank Boyle.

Mattia Dalla Costa

Aree di attività

  • Diritto societario
  • e-commerce
  • Franchising
  • Proprietà intellettuale
  • Marchi e brevetti
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    China – WOFE set up process

    10 Ottobre 2016

    • Cina
    • Diritto societario

    There are three bodies in a Swiss corporation, namely: the general meeting of shareholders (the supreme body), the board of directors and the auditors.

    Shareholder’s meeting

    The general meeting of shareholders is the supreme authority of the company and is composed of all shareholders. There are two types of meetings:

    • Ordinary general meeting. This is held annually within six months after the close of the business year;
    • Extraordinary general meeting, which is called as often as considered necessary.

    The general meeting of shareholders has the right to adopt and amend the articles, to appoint directors and auditors, to approve the financial statements and the directors’ report, to ratify certain decisions of the Board, and, in general, to make all important decisions which are not delegated to any other body. The shareholders must also approve the proposal of the Board relative to the distribution of annual profits. A general meeting is called by the board or, if it fails in its duties, by the auditors. One or more shareholders, representing together at least 10 % of the share capital, may at any time request the calling of an extraordinary shareholders’ meeting. This must be done in writing, indicating the purpose of the meeting. In general, a simple majority of votes represented at the general meeting is sufficient to pass a resolution and hold elections. However, certain decisions require a vote of two thirds of the votes represented and the absolute majority of the· par value of the shares represented (such as change of corporate purpose, extension of scope of business, distribution of shares with privileged voting rights etc.).

    Shareholders cannot be deprived of their acquired rights without their consent. The term acquired rights includes the right to vote, to dividends, to a share of the liquidation proceeds and to receive sufficient information on the financial condition of the company. The Swiss Code distinguishes two kinds of shareholders rights: financial interests and personal membership rights.

    Each shareholder has the right to a proportionate share of the profits distributed. Dividends may only be paid out of net profits or out of reserves specially created for this purpose. There is no interest payable on the ordinary share capital and a company may not declare interim dividends out of current year profits. Dividends can only be declared by the general meeting of shareholders and after attribution to the legal reserve. A share of the net profits may be paid to members of the board of directors if:

    • the articles specifically provide for such payments,
    • the allocations to the legal reserve fund have been made and,
    • a dividend of at least five percent has been paid to the shareholders.

    Unless otherwise stated in the articles or in the resolution for the increase in share capital, each shareholder has an option to subscribe to new shares in the same proportion that his original holding bears to the total shares issued.

    Each shareholder is entitled to a proportionate share of the proceeds of liquidation unless the articles of incorporation provide otherwise. The proceeds are calculated in proportion to the amounts paid in on the share capital.

    Most personal membership rights are acquired rights which means that even with the general meeting’s consent, the shareholder cannot be deprived thereof. These include the following:

    • Shareholders exercise their rights at the general meeting of shareholders. Every shareholder may attend the meeting in person or be represented by his proxy. A holder of bearer shares is considered authorized to attend if he presents the share. On the other hand, registered shares can only be represented if a written proxy is produced.
    • Voting rights.
    • Shareholders are entitled to review the financial statements, which must be available for inspection at the address of the company not later than 20 day prior to the annual general meeting. Any shareholder may request a copy to be sent to him before the meeting.

    Board of Directors

    The company is managed by the board composed of one or more individual directors who must be shareholders. A majority of board members must be Swiss citizens residing in Switzerland.  If the board consists of a single member, he or she must be a Swiss citizen residing in Switzerland. The directors are elected at the general meeting for a period fixed by the articles (maximum six years). The directors can however be re-elected indefinitely.

    The articles may require that during their term of office they must deposit a certain number of shares at the corporation’s registered domicile. This is designed to protect the corporation against damages that directors may cause in the fulfilment of their duties. The board can delegate part of its authority to either an executive committee or to individual directors, to officers or to agents. At least one director must have power and authority to represent the company. The board designates the individuals authorized to represent the company vis-a-vis third parties and determines the details concerning the signatory powers. The company is unrestricted in the selection of its executive personnel, such as managers and officers, although managers and employees of foreign nationality require a permit to take up residence and employment in Switzerland.

    The board is responsible for the preparation of the general meeting. It gives the necessary instructions to the management for the proper conduct of the company’s business and supervises those authorized to act on behalf of the company. It is the primary responsibility of the board, although generally delegated to management, to keep the accounting records and to prepare the annual financial statements. Furthermore, the board must submit a written annual report on the company’s financial position and the results of its activities to the general meeting of shareholders.

    Auditors

    The general meeting of shareholders elects one or more independent auditors who may be individuals or legal entities. Auditors must be professionally qualified to fulfil their duties. At least one auditor must have his domicile, registered office, or a registered branch in Switzerland. The auditors may not serve as directors nor be otherwise employed by the company, nor may they assume managerial functions for the company. Auditors may be elected for a maximum period of three years. Re-election is possible.

    Auditors must have special professional qualifications if the audited entity:

    • has outstanding bond issues;
    • has shares listed on a Swiss stock exchange;
    • exceeds two of the following parameters in two consecutive years:
    • Balance sheet total: CHF 20’000’000
    • Revenues: CHF 40’000’000
    • Average number of employees: 200

    The auditors must report on whether the accounting records and the financial statements, as well as the proposal concerning the appropriation of the available profit, comply with the law and the articles of incorporation. If the auditors, in the course of their examination, find violations either of law or of the articles, they report this in writing to the board of directors and, in important cases, to the general meeting of shareholders. In the event of obvious over-indebtedness, the auditors must notify the judge if the board fails to do so. Auditors are liable to the shareholders and creditors for damage caused by intentional or negligent failure to perform their duties. The auditors are required to attend the general meeting of shareholders.

    The Bolivarian Republic of Venezuela (“Venezuela” or the “Republic”) is one of the largest Latin American economies, given its status as one of the world’s largest oil producers and exporters.

    Over the last few years, however, the Venezuelan Government has nationalized a number of businesses in the telecom, power, oil, oil service, bank, and several other industries. The Government has also imposed price controls on many core goods and significant exchange control restrictions that limit the ability to purchase foreign currency.

    Despite all these setbacks, Venezuela continues to be a country with significant business opportunities for foreign investors willing to assume risks.

    The business environment

    Venezuela has the fifth largest proven oil reserves in the world (and the largest in the Western Hemisphere), and the second largest proved natural gas reserves in the Western Hemisphere. If we include an estimated 235 billion barrels of extra heavy crude oil in the Orinoco Belt region, Venezuela holds the largest hydrocarbons reserves in the world. PDVSA, Venezuela’s oil and gas state-owned company, is one of the world’s largest oil companies: they have acknowledged that significant additional foreign investment would be required to achieve its production goals. The Government has signed joint venture agreements for the development of oil and gas projects with international partners from China, India, Italy, Japan, Russia, Spain, the United States of America, and Vietnam among others. All of this creates enormous business opportunities for companies in the oil and gas sector.

    The Venezuelan market is also a significant source of profits for several multinational consumer-products makers operating in the country since Venezuelans spend a relatively high proportion of discretionary income on personal products and services, beverages and tobacco, apparel, communications (mobile and smartphones), TV and electronic products. In the next few years, imports are expected to increase much faster than exports with the expansion of consumer demand and the decreasing in the national production of consumer goods.

    Venezuela has signed economic cooperation treaties with several countries, including Brazil, China and Russia, providing an adequate framework for investments in projects by companies from such countries.

    Venezuela is also a party to international treaties to avoid double taxation with several countries that protect investors against certain changes in tax legislation and is a party to bilateral investment treaties with several European, Latin American and Asian countries, which provide for adequate compensation in case of expropriation or nationalization and access to international arbitration in a neutral forum. Despite Venezuela’s withdrawal from the International Centre for Settlement of Investment Disputes, several of the existing bilateral investment treaties permit arbitration under the UNCITRAL Arbitration Rules and the ICSID’s Additional Facility rules. In certain cases, the Venezuelan Government has reached agreements with foreign investors in businesses subject to nationalization and has paid compensation in U.S. dollars.

    The Venezuelan government has engaged in infrastructure and other strategic projects with foreign investors under contracts providing for payments in foreign currency and, in certain cases, for international arbitration to settle potential disputes.

    Venezuela is divided into three levels of government:  the national level, the state level and the municipal level.  There are 23 states, a capital district and various federal dependencies, and each state is divided into several municipalities.  The political structure of Venezuela is governed by the Constitution of 1999, as amended in February 2009.

    At the national level, the government is divided in the executive, legislative, judicial, civic and electoral branches.  The President of Venezuela (the “President”) is the head of state, head of the national executive branch, and the commander-in-chief of Venezuela’s armed forces.  All executive powers are vested in the President.  The President is also entitled to veto laws passed by the National Assembly.

    The national legislative power is vested in the Asamblea Nacional or National Assembly.  The National Assembly has only one chamber, and its members (diputados) are elected by universal suffrage for terms of five years, and may be re-elected for unlimited five-year terms.  The National Assembly is empowered to enact laws, which require the promulgation of the President and its publication in the Official Gazette to become effective.  The work of the members of the National Assembly is done through several Commissions and Sub-Commissions.

    The judicial branch is vested in the Venezuelan Supreme Tribunal (Tribunal Supremo de Justicia) and various lower tribunals.  The Supreme Tribunal is the final court of appeals.  It has the power to void laws, regulations and other acts or decisions of the executive or legislative branches that conflict with the Constitution or the laws.  The current number of justices of the Supreme Tribunal is 32.  Justices of the Supreme Tribunal are appointed by the National Assembly for twelve-year terms

    The Supreme Court has five chambers, the Constitutional Chamber, the Social Cassation Chamber, the Civil Cassation Chamber, the Criminal Chamber, Electoral Chamber and the Political-Administrative Chamber.  Each Chamber is composed of three justices, except for the Constitutional Chamber which is composed by five.

    The Venezuelan court system is a national system; there are no state courts, but there are national courts sitting in each respective state.  Judges are appointed by the Supreme Court.  The jurisdictions of courts are divided by subject matter: civil, commercial, labor, tax, administrative, criminal and family, among others.

    Venezuelan courts are generally biased in favor of the Venezuelan government (the Republic or Venezuelan state-owned companies); therefore, it would be very difficult to win a case against the Venezuelan government in a Venezuelan court. In addition, bringing judicial proceedings against the Venezuelan government may have adverse effects on the business of the claimant and on its ability to be awarded further projects or contracts from the government.

    At the state level, the government is divided in the executive and legislative branches.  The executive branch of a state is in charge of its governor (gobernador) elected by universal suffrage within each state.  State legislative power is vested in state assemblies whose members are also elected by universal suffrage within each state.  States have virtually no taxing power but they may create taxes on non-precious metals and minerals that are not reserved to the State.

    At the municipal level, the government is divided in the executive and legislative branches.  The executive branch of a municipality is in charge of its mayor (alcalde), elected by universal suffrage within each municipality.  Municipal legislative power is vested in municipal assemblies (consejos municipales) whose members (concejales) are also elected by universal suffrage within each state.  Municipalities are empowered to levy business tax on gross income and to approve construction projects in cities and other population centers.

     

    The author of this post is Fulvio Italiani

    Un imprenditore straniero che voglia intraprendere un’attività commerciale in Belgio potrà scegliere tra tutte le forme societarie previste nel Codice delle Società belga. In quest’articolo verranno esaminate in maniera schematica le tre modalità di accesso nel mercato belga più comuni.

    In primis la forma più semplice è quella della succursale (1), ossia una nuova entità che opererà nel territorio belga come filiale della società madre.

    Nel caso in cui l’imprenditore voglia costituire una nuova società, la scelta normalmente ricadrà fra le due tipologie maggiormente utilizzate: Société anonyme (2) o Société privée à responsabilité limitée (3).

    1.    Succursale

    Le società che sono state costituite all’estero e che all’estero hanno la loro sede principale possono operare in Belgio e stabilirvi una succursale (art. 58 Codice delle società).

    La succursale è stata definita dalla giurisprudenza belga come “un centro di operazioni che si manifesta all’esterno, in maniera stabile, come un’estensione della casa-madre (maison mère), ma comunque in grado di poter negoziare autonomamente con i terzi”.

    Requisiti di forma

    Gli artt. 81 e 82 del Codice delle società indicano quali sono i documenti necessari:

    • atto costitutivo;
    • la denominazione e la sua sede;
    • la decisione di aprire la succursale presa dall’organo abilitato a farlo nella società estera;
    • gli ultimi bilanci annuali.

    Tutti questi documenti dovranno essere tradotti (con una traduzione giurata) in una lingua ufficiale belga (francese, olandese, tedesco) e depositati presso la cancelleria del tribunale del commercio territorialmente competente.

    Legalizzazione ed Apostilla

    In determinati casi questi documenti dovranno essere legalizzati (légalisés), vale a dire che occorrerà una certificazione della loro “provenienza” da parte di un organo competente.

    Sono esentati da legalizzazione, in quanto sostituita dalla forma semplificata delle apostille, gli atti provenienti dagli Stati contraenti della Convenzione de L’Aja del 5 ottobre 1961.

    Per quanto riguarda le società italiane che intendano aprire una succursale in Belgio, non sarà più necessario procedere alla legalizzazione degli atti pubblici o all’apposizione di apostille in virtù della Convenzione di Bruxelles del 25 maggio 1987, la quale ha soppresso ogni forma di legalizzazione o qualsiasi altra formalità equivalente tra gli Stati che l’hanno ratificata.

    Conoscenze di base e capacità imprenditoriali

    Per provare il possesso delle conoscenze di base occorre un documento che attesti:

    • una conoscenza della gestione di base;
    • la partecipazione ad un corso di gestione;
    • il possesso di un titolo di studio abilitante all’insegnamento superiore o universitario.

    Per dimostrare l’esistenza ed il possesso di queste capacità di gestione imprenditoriale ci si può avvalere delle disposizioni contenute nella direttiva europea 2005/36 (artt. 17 e 19) relativa al “riconoscimento dei titoli e delle qualifiche professionali ottenuti all’estero”, attraverso una dichiarazione di competenze rilasciata dagli enti preposti all’interno dello Stato membro di origine.

    Regolamento Bruxelles I bis

    Il regolamento europeo “Bruxelles I bis”, applicabile alle controversie in materia civile e commerciale, dispone che le società che hanno la loro sede nel territorio di uno degli Stati membri dell’UE possono essere convenute nel tribunale del luogo in cui esse hanno stabilito una succursale se la controversia concerne l’esercizio di questa succursale (art. 7 n. 5 Bruxelles I bis).

    2.    S.A. (Société anonyme)

    La SA è definita nel Codice delle società come quella nella quale “gli azionisti non si impegnano che per un ammontare determinato” (art. 437).

    Dal 1984 è possibile che la costituzione di una SA avvenga per mezzo dell’accordo di due persone fisiche o giuridiche (fino a questa data erano necessarie sette persone!).

    Numero soci

    2 soci, nessun limite massimo

    Capitale minimo

    € 61.500

    Liberazione del capitale

    Il capitale versato deve essere pari ad almeno € 61.500.

    Inoltre ogni azione deve essere liberata per almeno ¼ del suo valore e le azioni che corrispondono a dei conferimenti in natura dovranno essere interamente liberate entro 5 anni dalla costituzione.

    Modalità di costituzione

    Atto pubblico a pena di nullità e deposito presso la cancelleria del tribunale. È inoltre necessaria la  redazione di un piano finanziario relativo ai primi 2 anni.

    Responsabilità dei soci

    Limitata alla propria partecipazione.

    Titoli

    Azioni e obbligazioni:

    • i titoli possono essere nominativi o dematerializzati;
    • in caso di emissione di azioni nominative occorre tenere un registro delle azioni.

    Circolazione dei titoli

    La libera circolazione è obbligatoria. Limitazioni statutarie:

    • clausola di gradimento;
    • clausola di vendita (prelazione);
    • clausola di inalienabilità (sempre per un tempo determinato).

    Organi

    Consiglio di amministrazione:

    • minimo 3 amministratori e 2 in caso di due soli soci (persone fisiche o giuridiche);
    • nominato dall’assemblea generale al massimo per 6 anni.

    Assemblea generale dei soci:

    • ordinaria: una volta per anno;
    • straordinaria: in caso di modifiche allo statuto.

    3.    S.P.R.L. (Société privée à responsabilité limitée)

    Ai sensi degli artt. 210 e 211 Codice delle società, la SPRL può essere definita come una società:

    • costituita da una o più persone (dal 1987 la costituzione di una SPRL può avvenire per atto unilaterale);
    • i cui soci sono responsabili limitatamente al valore dei loro conferimenti;
    • i cui conferimenti possono essere sia in denaro sia in natura (intendendo per conferimento in natura qualsiasi bene suscettibile di valutazione economica).

    L’art. 210 CS vieta espressamente l’appello al mercato per collocare quote o obbligazioni di una SPRL.

    Numero soci

    2 soci, nessun limite massimo. È possibile costituire una s.p.r.l.u. (unipersonale) con un solo socio.

    Capitale minimo

    Capitale da sottoscrivere e da liberare:

    • € 18.550 capitale minimo; deve essere integralmente sottoscritto,
    • € 6.2000 capitale da liberare (€12.400 nelle s.p.r.l.u.),
    • p.r.l. starter: € 1 capitale minimo.

    In caso di conferimenti in natura:

    • rapporto di un revisore di impresa (valutazione),
    • rapporto dei fondatori (interesse dell’impresa).

    Modalità di costituzione

    L’atto costitutivo dovrà essere redatto nella forma dell’atto pubblico:

    • deve essere depositato in cancelleria entro 15 giorni,
    • i fondatori devono presentare un piano finanziario relativo ai primi 2 anni.

    Responsabilità dei soci

    Limitata alla propria partecipazione.

    Titoli

    Quote sociali (titoli nominativi) + la possibilità di emettere obbligazioni: tutti i trasferimenti dovranno essere annotati nel registro dei soci tenuto presso la sede sociale.

    Circolazione dei titoli

    Occorre l’approvazione della metà dei soci che detengano almeno i ¾ del capitale. L’approvazione non sarà necessaria quando il trasferimento avviene a favore di un altro socio, di un parente del socio cedente o di una persona preliminarmente approvata in statuto.

    Lo statuto potrà contenere norme maggiormente restrittive.

    Organi

    Amministrazione:

    • Amministratore (1 o più, soci e non);

    Assemblea generale:

    • ordinaria: almeno una volta all’anno;
    • straordinaria: in caso di modifiche allo statuto.

    L’autore di questo post è David Diris.

    For purposes of conducting business in Argentina, a foreign investor may either incorporate a company under one of the types provided for by the Argentine Companies Law (“ACL”) – subsidiary – or it may set up a branch of its company and appoint a representative thereto. Foreign investors normally elect to set up a subsidiary under the type of Corporations (Sociedades Anónimas “SA”) or Limited Liability Companies (Sociedades de Responsabilidad Limitada “SRL”), for both cases the foreign investor’s liability is limited to the stock capital amount invested in the subsidiary. This first post will summarize the SRL main characteristics.

    Foreign investors infrequently prefer the branch structure, as (unlike corporations and limited liability companies) branches do not enjoy limited liability. Branches are not considered to be a separate entity from their parent companies, and therefore, all such acts carried out by the branches are considered as directly performed by the parent company itself. This implies that foreign entities are fully liable for all the transactions carried out by their branches. Both legal structures (subsidiaries and branches) require the foreign investor to be registered with the Public Registry of Commerce in Argentina.

    Main characteristics of the Argentinian Limited Liability Companies: las Sociedades de Responsabilidad Limitada (SRL)

    Registration and by-laws: No more than 50 quotaholders are permitted in the limited liability companies.

    Capital Limited liability companies: No minimum capital is required to form a limited liability company. As in the case of the corporations, the corporate capital must be proper to the development of the corporate purpose and the Public Registry of Commerce may request the companies to fix an amount higher than the one decided by the partners. At least 25% of the capital must be paid up at the time of formation and the remaining 75% must be contributed within a term of two years as of that moment.

    Liability SRL: The liability of the quotaholders is limited to the amount of the capital invested. The sole limitation to this rule is the “lifting of the corporate veil” doctrine, applicable when companies have been organized or used with fraudulent purposes, abusing of the right to organize such separated legal person.

    Legal Books and Records SRL: Only a Book of Meetings of Managers and Quotaholders is required.

    Management SRL: Are managed by managers who may be appointed indefinitely. Managers are not required to be Quotaholders and also the majority must be resident in Argentina. Managers have the same rights and obligations as directors of corporations.

    Supervision SRL: the appointment of a syndic is optional unless the capital is more than AR$ 10,000,000, in which case one or more syndic must be appointed.

    Quotaholders’ Meetings SRL: Corporate resolutions are adopted by a partners’ resolution as set forth in the act of incorporation. At least one Ordinary Quotaholders’ Meeting must be summoned annually to consider the financial statements, the managers’ report, allocation of profits, and appointment of managers and statutory auditors as basic subjects. Amendments of the by-laws, should a sole partner represent the majority vote, require the vote of another partner.

    Financial statements, Balance Sheets and Accounts SRL: Annual financial statements must be submitted for the consideration of the Quotaholders’ Meeting. Same must be filed with the Public Registry of Commerce only if the capital exceeds the amount of $ 10,000,000.

    The author of this post is Tomás García Navarro.

    Founders

    At least one founder (either individual or legal entity) is necessary to form a corporation. Founders and shareholders are not subject to any nationality or residence requirements. Directors must be shareholders and at least one director must be resident in Switzerland. Another restriction relates to the acquisition by non-resident aliens of shares in a Swiss company whose assets consist mainly of Swiss real estate: these transactions are subject to prior authorization. Prior authorization is further required for non-residents to own and operate a Swiss bank, or to acquire an existing Swiss bank.

    Articles of incorporation

    Articles of incorporation must have the following minimum content:

    • the company name and address;
    • the business purpose of the company;
    • the amount of share capital and the contributions made thereto;
    • the number, par value and type of shares;
    • the calling of the general meeting of shareholders and the voting rights of the shareholders;
    • the naming of the bodies which take care of the management and the auditing of the company;
    • the form in which the company must publish its notices.

    Optional clauses are those which must only be listed if founders intend to adopt additional provisions, such as the directors’ participation in the net profits, the issue of preferred shares, the delegation of directors’ authority, the issue of authorized capital or conditional capital.

    Founders report

    The founders must provide a written statement giving particulars of the nature and condition of contributions in kind or proposed acquisitions of assets, and the appropriateness of their valuation. A founders’ statement is also required when the capital of a company shall be contributed by conversion of shareholder loans and advances. The auditors have to review the founders report and confirm in writing that it is complete and truthful.

    Raising of Funds

    After subscription to all shares of capital stock, a minimum of 20% of the par value but not less than CHF 50,000 must be placed in escrow with a bank. The funds may only be released to the management after the company has been registered in the Commercial Register.

    Incorporation Meeting

    The corporation is formed at the incorporation meeting, which is held in the presence of all the shareholders and a public notary. This latter declares that the capital stock is fully subscribed and that the minimum payments have been made. Thereafter, the shareholders adopt the articles of incorporation and appoint the bodies corporate (board of directors, auditors etc.). Finally, a notarised deed must be drawn up recording the resolutions of the general meeting.

    Registration

    After incorporation, the company must be registered with the Commercial Register. This registration is published in the Swiss Official Gazette of Commerce. It discloses details such as the purpose of the company, its seat, the names of the shareholders (unless they opted for issuing bearer shares) and the names of the directors. Only at the time of registration the company acquires legal entity status. Shares may not be issued prior to registration.

    Upon formation, a one-time federal stamp duty of 3% is due on the capitalisation of the company. This stamp duty is assessed on the price at which the shareholder buys the shares. Any premium above par value is also subject to this duty. Furthermore, there are registration and notary fees and, generally, fees due to agents who act as founders to the new entity.

    Corporate Name

    The corporation is registered under a firm name, which must be distinguished from those of all other corporations already existing in Switzerland. In principle, the corporation is free to choose any kind of name. The name may not however be misleading or otherwise untruthful. The use of national or territorial designations is not permitted unless specifically authorized by the Federal and Cantonal Registers of Commerce. If a personal name is used, a designation showing the corporate nature must be added.

    Share Capital

    A public company is required to have a minimum capital of CHF 100,000 divided into shares with a minimum face value of CHF 0,01, while a limited liability company is required to have a minimum capital of CHF 20,000.  In the case of a public company, all shares must be subscribed at the time of formation. Capital contributions may be in cash or in kind. If the contribution is made in kind, the company must have access to such assets immediately after registration in the Commercial Register. The articles must describe the property, its value, the shareholder from whom it is received and the number of shares issued in return. The acceptance by the company of contributions in kind requires the approval of at least two thirds of the shares represented at the incorporation meeting.

    The general meeting of shareholders may authorize the board to increase the share capital within a period of 2 years. It is within the competence of the Board to decide if, when, and to what extent, the capital should be increased.

    The general meeting may provide in the articles for a conditional capital increase. The purpose of issuing conditional capital is, alternatively, to secure options and conversion rights in connection with warrant issues or convertible bonds, or to create employee shares. The increase of capital takes place at the same time, and to the same extent, as the exercise of the respective rights.

    Different Types of Shares

    Swiss corporation law distinguishes between the following categories of shares:

    • Bearer shares – Bearer shares may not be issued until the full issue price has been paid in. They are transferable by delivery and the corporation cannot restrict their transfer. Bearer shares are very popular in Switzerland because many owners prefer to protect their identity.
    • Registered shares – Registered shares are subscribed as called by the corporation and do not need to be fully paid in on issue. They are transferable by endorsement or assignment, generally without restriction. The company must keep a share ledger listing the owners’ names and places of residence. The entry must be certified on the share certificate by the Board. The buyer of incorrectly transferred registered shares cannot exercise personal membership rights. The articles may provide for subsequent conversion of registered shares into bearer shares and vice versa.
    • Restricted transferability of registered shares – To prevent unfriendly takeovers, the articles may provide for restrictions on the free transferability of shares. By law those restrictions are however limited.
    • Preferred shares – The general meeting of shareholders is entitled to issue preferred shares or to convert existing common shares into preferred shares. The holders of preferred shares enjoy certain preferences such as cumulative or non-cumulative dividends, priority in the proceeds of liquidation and a preferential right to subscribe to new shares. This preferential treatment must be provided for by the articles or be adopted by the votes of at least two thirds of all shares represented.
    • Voting shares – In general, each share is entitled to one vote. Since shares of differing value may be issued, each vote may not represent the same amount of capital contribution. Voting shares, therefore, provide those shareholders who represent a financial minority with the decision making power within the corporation. The issue of voting shares is permitted in the ratio of 1 : 10 to ordinary shares.
    • Profit sharing certificates – The general meeting of shareholders can issue profit sharing certificates in favour of persons who have an interest in the company through previous capital contributions, shareholdings, creditors’ claims, employees, or similar relationships. Profit sharing certificates may grant rights to a share in profits, a share in the liquidation proceeds or rights to subscribe to new shares. They do not procure any membership rights. By law, profit sharing certificates must not have a par value nor be issued in exchange for contributions characterized as assets.
    • Certificates of participation – The certificate of participation is a non-voting share, with the holder of such certificates having basically the same status as shareholders apart from the right to vote. The participation capital must not exceed double the share capital. Companies have until June 30, 1997 to comply with this requirement unless their participation capital was more than double the share capital on January l, 1985.

    There are two ways to enter and do business in the Dominican Republic: By establishing a separate Dominican business entity (“subsidiary”) or by registering a branch of a foreign company (“branch”). In addition, business relationships may be set up under a commercial contract in form of a joint venture, agency, distribution or similar agreements that comply with Dominican Republic legal and regulatory requirements, for the recognition and validity of business entities and commercial agreements.

    Another option consists of a Consortium agreement between foreign and Dominican companies intended to execute projects in which the Dominican State participates.

    ESTABLISHING A DOMINICAN SUBSIDIARY

    Usually start-up and medium business entities in the Dominican Republic are incorporated as a Limited Liability Company or Sociedad de Responsabilidad Limitada (S.R.L.). The Sociedad de Responsabilidad Limitada or S.R.L. is the most common and efficient form of organizing a company in the Dominican Republic and is often chosen by large foreign companies as the legal form for their subsidiaries.

    S.R.L.’s offer the following advantages: The partners receive limited liability, meaning that they only respond for company debts up to the limit of their contributed capital. Shareholders can be legal persons or individuals. SRL’s is manager managed with no board of directors required; managers must be individuals, and can be Dominicans or foreigners. Company can attract capital through the issuing of new shares which may be ordinary or preferred shares.

    SRL’s may effectuate any type of activities that are legal in trade and there are no restrictions in the Dominican Republic on the legal currency. The United States Dollar is exchanged freely with the Dominican Peso, as well as any other currency.

    SRL’s also serve as a holding company and may keep assets as their property, contributed by the partners or acquired by the same, both national and international, movable and real estate properties.

    SRL can outlive their founders. Their quotas may be freely transferred among partners, by way of succession, in case of liquidation of marital community assets, among ascendants and descendants under the rules established in the By Laws.

    The main steps in establishing a Dominican Limited Liability Company (SRL) are the following:

    1. Make a search before the Dominican Trademark Office, draft and file the request registration to obtain a trade name for the Dominican Company.
    2. Draft by-laws, minutes of incorporation meeting and related incorporation documents. These may be drafted as private documents or as a notary public act for signing by the partners and managers for legalization by notary public;
    3. Pay the incorporation taxes of one percent (1%) of the company’s registered capital before the corresponding Dominican Tax Administration (DGII);
    4. Prepare the business register application and file it along with the corresponding company incorporation documents after payment of business registration fee to obtain the company’s business registration certificate;
    5. Prepare and file the request to obtain the company’s Tax Identification Number (RNC);
    6. Register at DGII’s web page to obtain access and request fiscal invoice numbers (NCF);
    7. Enroll employees before the treasury of social security (TSS) and the ministry of labor.

    The following schedule serves as a guidance of the time required to form a new Dominican Company:

    Register of company trade name 5 to 7 days
    Drafting incorporation documents plus 2 to 5 days
    annexes (Incorporation Meeting, By-laws, Business Register application)
    Paying incorporation taxes on capital less than 1/2 day
    Incorporation Meeting of shareholders less than 1/2 day
    Legalizations by Notary Public less than 1/2 day
    Registration in Business Register 2 to 5 days
    Registration as Tax Contributor (RNC) 10 to 15 days

    The following founding documents are needed to form the company:

    1. Business Register request of registration form for Dominican Company, duly signed by the person that is authorized by the company or by an empowered attorney, for which a copy of the power of attorney shall be provided.
    2. By- Laws/Articles of Incorporation in private or notary act form containing the details required in legislation (including company name, registered domicile and purposes.
    3. Attendance List and Minutes of the Incorporation Meeting.
    4. Updated List of Partners/ Shareholders
    5. Report of the Commissary of Contributions, if applicable.
    6. Receipt of payment of the tax on the incorporation of legal entities.
    7. Photocopies of the Dominican Identity and Electoral Card and if foreign, Passport photo page or other official document with visible photo from the country of origin for the partners, managers and account commissary.
    8. Copy of the Trade Name Certificate issued by the Dominican Trademark Office.
    9. Declaration of acceptance of the appointments by the managers if this is not apparent from the by-laws and minutes of the incorporation meeting.

    REGISTERING A DOMINICAN BRANCH

    Foreign companies interested in doing business in the Dominican Republic (DR) may register a branch in the DR. Under Dominican law, a registered foreign company branch office can enter into contracts and execute and settle transactions in its own name, and can sue and be sued at its place of business.

    In order to successfully complete a DR branch registration, the foreign company documents shall prove its valid incorporation and existence, contain all general and specific information as well as proper authorizations; corporate documents shall be certified, notarized and duly legalized by all applicable foreign and local authorities according to local and international law. The Dominican Republic is a member of the 1965 convention of The Hague or Apostille.

    The registration of a foreign company branch before local authorities will enable the owners of the foreign entity to conduct business in a similar way and equal rights as a DR business entity.

    Branches of foreign corporations are in general treated the same way as legal entities for tax purposes. They are however not subject to issuance stamp tax upon formation. Profits of a Dominican branch office are exempt from taxation (Dominican withholding tax) in the partner-nation under the double-taxation agreements which Dominican Republic has signed.

    To register a branch in the DR, it is necessary to provide certified company incorporation, shareholder and manager verification and a power of attorney to qualified attorneys who will draft, prepare and file the request of branch registration at the business register and request a Taxpayer Identification Number (TIN) in the Dominican Republic.

    Usually, the registration of a branch to pursue general, unregulated and taxed commercial activities may be accomplished by pursuing the following:

    1. a) Business Registry: The Company should be registered in the Business Registry of the Chamber of Commerce where its local domicile will be located. A registration fee is calculated based on the authorized capital. In order to obtain this registry, the company must file all documents which evidence its proper incorporation in the home country and that representatives are fully authorized to register the foreign company branch.
    2. b) TIN: Issued by the Tax Administration. It is a number that shall serve for identifying the business’s taxable activities and for the control of the duties and obligations derived therefrom. To obtain such registration, the company shall file copy of the Business Registry and the corporate documentation that may be required by such Tax Administration. It shall also present a valid corporate domicile in the DR which may be subject to verification.

    USING DOMINICAN COMMERCIAL AGENTS AND DISTRIBUTORS

    A foreign supplier of goods and services may choose to enter the Dominican market by selling his/her products through Dominican agents and distributors or representatives. The different channels of selling are subject to different legal frameworks.

    Contracts involving Dominican agents and distributors are generally governed by the Civil Code of the Dominican Republic, whose freedom of contract principle allows the parties to choose freely the form, terms and conditions of their agreement as well as by the Code of Commerce and general commercial practices and rulings interpreting the scope of agency, unless said agreement is registered under Law 173 Protecting Importing Agents of Merchandises and Products of April 6, 1966, as amended (“Law 173”).

    Local agents and distributors often want to register their Agreements with foreign enterprises under Law 173, while foreign companies that do not have a free trade agreement with the Dominican Republic, are often unaware of this possibility and without adequate previous legal counsel, may later find out a Law 173 registration has been made.

    Once registration has been obtained, the relationship of the local licensee (a.k.a. “concessionaire”) with its grantor becomes governed by the provisions of Law 173 of 1966, which provides the local concessionaire with the following rights:

    • The right to initiate legal actions against the grantor or a third party for the purpose of preventing them from directly importing, promoting or distributing in Dominican Territory the registered products or services of the grantor;
    • The right to file suit for damages against both the grantor and any new appointee for substitution of the local concessionaire, including the right to be indemnified for unjust termination in accordance with the formula and for the concepts provided by Article 3 of Law 173.
    • The right to an automatic renewal of the contract or a mandate of continuation of the relationship existing thereof, even if the termination clause of a registered contract provides otherwise.
    • Unilateral termination by the grantor of the local concessionaire’s rights under Law 173 of 1966 is only possible if made for a “just cause”, pursuant to the definition of just cause provided by Law 173 of 1966.
    • The Law provides exclusive jurisdiction to the courts of the Dominican Republic.

    Law 173 protects Dominican agents and distributors of foreign enterprises. Its objective is to protect exclusive and non-exclusive agents, distributors and representatives from being unilaterally substituted or terminated without just cause by foreign entities, after favorable market conditions have been created for them in DR.

    Law 173 defines as grantor the individuals or legal entities who the Dominican agents and distributors (i.e. concessionaires) represent, who conduct business activities in the interest of the grantor or of its goods, products or services, whether the contract is granted directly by grantor, or by means of other persons or entities, acting in grantor’s representation or in their own name but always in its interest or of their goods, products or services.

    The author of this post is Felipe Castillo.

    Companies are the most common vehicles for business and investment activity whether in Cyprus or abroad.

    Types of companies

    Under the Companies Law. Cap. 113 as amended (the “Companies Law”), there are two types of companies:

    • Companies limited by shares, and
    • Companies limited by guarantee (with share capital or without share capital)

    Companies limited by guarantee are often employed for non-profit or charitable purposes whereas companies limited by shares for business purposes.

    The latter may be either private companies or public companies. A private limited liability company must have at least one shareholder but no more than fifty whereas a public limited liability company must have a minimum of seven shareholders and there is no ceiling as to maximum number. The shareholders of a company may be either natural persons or legal persons (Cypriot or foreign). Shares cannot be issued to the bearer.

    Liability of shareholders

    Companies are separate legal entities distinct from their members. They have a separate corporate personality and are responsible for their obligations and debts. The liability of the shareholders in companies limited by shares (private or public), is limited to the nominal value of the shares agreed to be taken up or to an amount above the nominal value if the shareholder specifically agreed to subscribe to the shares at a premium. In the case of companies limited by guarantee, the liability of the shareholders is limited to the amount each shareholder agrees, at subscription, to contribute towards the debts of the company in the event of liquidation.

    Share Capital

    There is no restriction as regards the minimum or maximum share capital of a private company. But there is a minimum share capital requirement of €25629.02 in the case of public companies. Information as regards the initial authorised and issued share capital of the company is included in the memorandum of association and any subsequent changes must be notified to the Registrar of Companies.

    The share capital may be paid in cash or in kind.

     Transfer and allotment

    The transfer of shares in a company is not restricted by law. It is however possible and common for restrictions e.g. right of first refusal to be included in the articles of association of the company. In such cases any transfer of shares must be made in compliance with the relevant provisions of the constitutional documents (see below).

    On an allotment of new shares of a public company, the company is obliged to offer shares to existing shareholders pursuant to pre-emption rights provided as mandatory rules in the statute. In the case of a private company there is not such statutory duty and therefore it depends on whether pre-emptions rights and relevant obligations on the part of the company have been provided for in the articles of association.

    All allotments of new shares and transfers of shares must be notified to the Registrar of Companies.

     The Directors and Secretary

    The directors of the company, acting collectively as a board, manage the business of the company and do all decision making to the extent not reserved for the general meeting of the shareholders.

    A private company needs to have at least one director whereas a public company must have at least two. There is no statutory restriction as to the maximum number of directors but the articles of association of the company may provide limitations. The directors of the company may be natural or legal persons (Cypriot or foreign). The proceedings of the board of directors and its composition are very important elements for the tax treatment of the company (see below).

    All companies are required to have a secretary. The duties of the secretary are mainly of an administrative nature.

     Registered office

    The company must have a registered office in Cyprus. All communications and notices may be addressed to the company at the registered office and any document, whether official or otherwise, may be served to the company at its registered office.

     Incorporation documents

    The memorandum of association is the document which sets out important information in relation to the company; such information might be relevant for third parties e.g. potential counterparties, creditors etc.. The memorandum of association must state:

    • the name of the company;
    • the place where the registered office is situated;
    • in the case of a public company, the fact that it is such a company;
    • the objects of the company;
    • a statement that the liability of its members is limited and the amount to which such liability applies;
    • the names of the subscribers to the memorandum of association and the number of shares each of them takes up.

    Following the registration of the company, the memorandum of association may be amended with the approval of the court.

    The articles of association is the document regulating internal matters as regards the operation and management of the company and the rights of the members e.g. the procedures to be followed in general meetings, requirements for the adoption of resolutions, the voting rights of members, the conditions and manner in which shares are to be transferred, rights and duties relating to put or call options, rights and duties relating to tag and drag along rights, the appointment and removal of directors etc. The articles of association may be amended by a relevant decision of the members of the company.

    Together with the memorandum of association, the articles of association form the constitutional documents of the company and constitute basically an agreement between all and each of the members of the company to abide to their provisions.

     Registration

    Establishing a company requires registration with the Registrar of Companies, the governmental office competent for matters relevant to the registration of companies and their ongoing obligations with regard to information that must filed pursuant to the Companies Law. The Registrar of Companies is responsible for keeping a relevant file which is available to the public for inspection.

    The initial step in the formation of a company is the approval of the proposed name by the Registrar of Companies. Subsequently, the memorandum of association and articles of association of the company must be filed accompanied by the necessary forms which indicate the registered office, the details of the director(s) and secretary and an affidavit of the lawyer in charge of the registration of the company. Usually it takes approximately seven to fifteen working days for the completion of the registration of a company. A shelf company i.e. a ready-made company may be purchased if there is an immediate need for the use of a company. Following registration of the company, the Registrar of Companies issues a certificate of incorporation which constitutes conclusive evidence that all the requirements of the Companies Law, in respect to registration and matters precedent and incidental thereto, have been complied with.

    Financial statements

    Financial statements must be prepared annually and be duly audited by qualified accountants practising in Cyprus according to the International Financial Reporting Standards. Annual returns containing information as to any changes to directors, secretary, shareholders, authorised, issued or paid up capital, registered office, mortgages/charges and other related matters must be filed with the Registrar of Companies once per year accompanied by a copy of the financial statements.

    Tax aspects

    In order be eligible to benefit from the favourable Cyprus tax regime and treaty network in place, a company should be considered as resident in Cyprus for tax purposes.

    Under Cyprus tax law, a company is considered as tax resident in Cyprus if its ‘management and control’ is exercised in Cyprus. There is no statutory definition of ‘management and control’. In practice Cyprus tax authorities would look at several conditions to determine whether a company qualifies as a resident in Cyprus for tax purposes:

    • strategic management decisions and preferably day-to-day decisions being taken in Cyprus,
    • the majority of the board members being tax residents in Cyprus and exercising their  office from Cyprus,
    • an actual office being maintained in Cyprus,
    • evidence of commercial documentation being stored in the company’s office,
    • accounting records being prepared and kept in Cyprus,
    • bank accounts being operated from Cyprus even if maintained with foreign banks.

    Not all of the above must be established in order for the company to qualify a tax resident in Cyprus; the conditions would be considered in light of the nature and level of activities of the company and the country in which transactions or investments are made. For the purposes of the Cyprus tax authorities satisfaction of the first two conditions would normally be adequate for the company to be considered as tax resident.

    Tax resident companies are subject to income tax on their worldwide income at the flat rate of 12.5% subject to tax credit for any tax suffered in a foreign jurisdiction on income which is also subject to tax in Cyprus.

    Companies ought to submit tax returns, together with their annual financial statements, to the Tax Department in compliance with the applicable legislation.

    Re-domiciliation

    It is possible for corporations from other jurisdictions to acquire a ‘domicile’ in Cyprus. Effectively this means that the company may change its governing law without going through the process of liquidation where it was firstly established and then fresh incorporation in Cyprus.

    A company registered in another jurisdiction is eligible to apply to the Registrar of Companies to be registered as a continuing company pursuant to the provisions of the Companies Law if: the foreign jurisdiction allows the re-domiciliation, its constitutional documents provide for it and the steps required for the decision for the re-domiciliation have been complied with. Such companies must have their registered office transferred into Cyprus.

    It is also possible for local companies to “re-domicile” moving their registered office in other jurisdictions.

    In both cases of ‘re-domiciliations’ the permission of the Registrar of Companies is required and it is generally given upon certain conditions being met.

    La sfida dell’imprenditore

    Quando un imprenditore decide di internazionalizzare la sua azienda, deve tenere in considerazione diversi fattori prima di prendere una decisione. Al termine dell’analisi, probabilmente si indirizzerà verso uno stato che gli offra sicurezza, stabilità, poche restrizioni e incentivi statali.

    Nell’America meridionale, c’è un paese che sta crescendo sistematicamente da 25 anni ed ha contesto estremamente favorevole agli investimenti: il Perù.

    Questo paese ha trasformato la sua chiusura economica del passato in un sistema produttivo aperto, con uno sguardo sempre rivolto agli investimenti stranieri. Prima del 1990, questo paese si trovava in una situazione economica recessiva, con un sistemae economico controllato dallo Stato, altissimi livelli d’inflazione, dazi doganali elevati, proibizioni alle monete straniere, grandi differenze tra le aree metropolitane e le province, attentati terroristi e alti livelli di corruzione.

    Anche se nel 1990 la situazione di questo paese sembrava irrecuperabile, una nuova classe politica ha saputo rialzare il paese, tracciando la strada per lo sviluppo degli ultimi anni. L’economia è stata rivoluzionata: dazi doganali drasticamente ridotti, sono stati eliminate le limitazioni alle valute straniere e sono state gettate le basi per un’attività economica privata in regime concorrenziale, relegando le partecipazioni Statali a una funzione sussidiaria, senza violare i principi del libero mercato.

    Un paese da tenere in considerazione

    Mai nella storia repubblicana del Peru ci sono stati oltre 25 anni di crescita, e questo cammino intrapreso non accenna a fermarsi. C’è un generale consenso a favore della stabilità macroeconomica che, associato a politiche fiscali prudenti, ha portato il Perù ad accogliere importanti riserve monetarie internazionali e ridurre drasticamente il suo debito.

    Aziende statali hanno lasciato il mercato in favore di imprese private locali e internazionali attraverso privatizzazioni e concessioni, specialmente nel settore delle infrastrutture.

    I diversi governi peruviani dal 1990 in poi hanno sottoscritto molteplici accordi internazionali con il resto del monto. Ad oggi, il Perù ha accordi di libero scambio con le principali economie del mondo, tra le quali gli Stati Uniti, l’Unione Europea e la Cina, ed è un promotore attivo dell’integrazione economica, come testimoniato recentemente dall’“Alleanza del Pacifico” formata insieme alla Colombia, al Cile e al Messico.

    In Peru è possibile non solo avere conti in valuta locale (Soles), Dollari Americani ed Euro, ma è anche possibile cambiare moneta a tassi di cambio molto competitivi. Investitori stranieri e trader possono importare ed esportare capitali in Perù senza il bisogno di alcun tipo di permesso o autorizzazione da parte dello Stato.

    Il paese è cambiato e questa volta la modernità ha raggiunto anche le province, la povertà è stata ridotta da più del 50% all’inizio degli anni ’90 a poco meno del 20%, comportando un’importante crescita della classe media. Il nuovo governo peruviano, che ha iniziato il mandato quinquennale lo scorso luglio, si è impegnato a ridurre ulteriormente questa cifra, portandola sotto il 10%.

    L’economia peruviana è abbastanza diversificata. Mentre il settore minerario è storicamente il più importante dell’economia, altri settori stanno crescendo a livelli record: pesca, agricoltura, agro-industria, costruzione, turismo, servizi, etc.

    Il Peru si è anche impegnato ad entrare nell’Organizzazione per la cooperazione e lo sviluppo economico (OCSE), che riunisce alle più importanti economie del mondo.

    Ciononostante la strada è ancora lunga. Alti livelli di economia informale e un grande deficit nelle infrastrutture rappresentano sì una sfida, ma allo stesso tempo anche una notevole opportunità.

    Il quadro normativo

    Mentre le normative nei settori fondamentali (fiscale, diritto del lavoro, diritto civile) sono sostanzialmente le stesse dall’inizio degli anni 90’, il governo di Pedro Pablo Kuczynsky ha richiesto al Congresso nazionale la possibilità di legiferare attraverso decreti in 5 materie chiave: lo sviluppo economico, la sicurezza pubblica, in materia di anti-corruzione, riguardo servizi essenziali (come acqua e sanità) e per la riorganizzazione della società petrolifera nazionale (Petro-Peru). Il Congresso peruviano (controllato dal partito di opposizione guidato dalla sig.ra Fujimori) ha approvato la richiesta dell’esecutivo, che ora ha novanta giorni (quindi entro la fine di dicembre 2016) per legiferare in materia.

    Nelle prossime settimane analizzeremo i primi provvedimenti governativi, che dovrebbero contenere disposizioni a favore degli investitori stranieri. Attraverso l’analisi di queste nuove norme, proveremo a dare alcuni consigli su come fare affari in Perù, con particolare attenzione agli aspetti legali.

    L’autore di questo articolo è Frank Boyle.

    Roberto Luzi Crivellini

    Aree di attività

    • Arbitrato
    • Distribuzione
    • Commercio internazionale
    • Contenzioso
    • Real estate
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