-
比利时
Vehicle taxes for foreign workers residing in Belgium
2 1 月 2020
- 公司法
- 税务
Summary – While China’s economy bore the brunt of the initial economic impact, the COVID-19 outbreak is bringing both direct and indirect complications for economies around the world. With China’s key role in the supply chain and manufacturing, in combination with lockdowns restricting movement, trade and business – fiscal authorities are implementing new measures to protect and stimulate their respective economies.
The Australian Government has announced a series of new regulatory, legislative and administrative changes that strengthen the country’s position moving through the crisis. The International Monetary Fund and the Organisation for Economic Co-operation and Development forecast Australia’s growth outpacing many comparable countries, including France, Canada, Japan, Germany, and the UK – all without endangering Australia’s debt sustainability.
Australia’s Response
The Australian Federal Government has, in a series of announcements, revealed a consolidated package of $320 billion AUD or $200 billion USD[1] support – equivalent to 16.4% of the country’s nominal GDP. They have made a clear stance that Australia is prepared to protect its national interest and respond to the broad and prolonged impact of the outbreak.
The stimulus measures can be considered in three separate categories, each with an intended purpose:
- support businesses;
- support the flow of credit; and
- support individuals and households.
The measures come with consideration of varying factors, including helping with the management of short-term cash flow, assist severely affected communities and regions, to prop up individuals and households dealing with sudden loss of employment, maintaining employees’ connections with business, and to ensure the continued flow of credit.
The Coronavirus Economic Response Package (Payments and Benefits) Act 2020 and Coronavirus Economic Response Package Omnibus (Measures No. 2) were passed by parliament on 8 April 2020. More legislation is expected to come as Australian authorities continue to study the broader prolonged impacts of COVID-19.
State and local governments within Australia have also announced a wide range of measures in addition to those announced by the Federal Government.
[1] Based on AUD-USD exchange rate 21 April 2020
Support for Businesses
JobKeeper Subsidy
The Australian government has committed $130 billion in ongoing support to business through the JobKeeper subsidy. The payment is available to businesses that are suffering a reduction in turnover to keep Australians employed during the outbreak. The JobKeeper subsidy is a gross fortnightly payment of $1,500 for each eligible employee for a 6-month period. The full $1,500 payment is to be paid to each eligible employee, either as a partial subsidy if their wage is greater than $1,500, or as a full subsidy if their wage was previously less than $1,500. The gross payment will be taxed at normal rates, although employers are not obliged to make additional superannuation contributions.
The scheme includes sole traders as well as businesses and not-for-profits (NFP).
Boosting Cash Flow for Employers
Small and medium businesses, as well as NFP are eligible for cashflow boosts to further assist in retaining employees. Tax-free cash flow boosts of $20,000 to $100,000 will be delivered to eligible businesses and organisations with aggregated annual turnover under $50 million. The Government has specifically acknowledged the increasing demand for NFP services during this crisis.
In a series of two payments, each payment will be equivalent to the business’ withheld salary and wages, with a minimum of $10,000 and maximum of $50,000. The first cashflow boost is set to be available between March and July 2020; the second boost will be made to businesses who received the first and will be of an equal sum, to be paid between June to September 2020. By splitting the support into two equal payments, the intention is to provide continued cash flow support over a longer period – increasing confidence and assisting businesses to maintain their operations.
Temporary Relief for Financially Distressed Businesses
Recognising the need for a safety net to allow businesses to resume operation post-crisis, this measure provides legislative support to financially distressed businesses. The temporary changes include reducing thresholds for creditors to issue statutory demands and initiate bankruptcy proceedings, increasing time available to respond to statutory demands, relieving directors from personal liability for trading while insolvent, and providing flexibility in the Corporations Act 2001 when dealing with unforeseen circumstances stemming from the COVID-19 crisis.
The Australian Taxation Office is willing to tailor solutions for directors and owners currently suffering. These may include reductions in payments or deferrals and withholding enforcement actions.
Changes to Asset Write-Off and Depreciation Deductions
The threshold for instant asset write-off is increased from $30,000 to $150,000 and access is expanded to businesses with aggregated annual turnover less than $500 million (previously $50 million) until the end of the 2019-20 financial year (i.e. 30 June 2020).
Up until the end of the 2020-21 financial years, depreciation deductions are accelerated for businesses under the same $500 million threshold. Upon installation of assets, 50% can be deduced with existing depreciation deduction rates to the balance. This measure is considered an investment incentive for businesses.
Supporting Apprentices and Trainees
Eligible employers may have 50% of an apprentice’s or trainee’s wage subsidised between 1 January 2020 and 30 September 2020. When businesses are unable to retain their apprentice or trainee, the subsidy can be provided to a new employer. As a part of this program, Australia’s National Apprentice Employment Network will provide further support in coordinating re-employment of workers affected by the COVID-19 crisis.
Support for Affected Regions and Industries
$1 billion of stimulus funds is reserved to support regions that are most impacted by the COVID-19 crisis. The purpose is to provide assistance during both the outbreak and the recovery. Further, the Australian airline industry is receiving tax and fee relief, with an estimate value of $715 million.
Support Flow of Credit
Immediate Cash Flow Needs for SMEs
The Government is providing guarantees of 50% for SME lenders to encourage new short-term unsecured loans for SMEs. By increasing lender’s willingness to provide credit, Australian businesses will be in a better position to secure loans and increase their cash flow.
Quick and efficient access to credit for small business
Small businesses will have more and faster access to credit as an exemption is provided to ‘responsible lending’ requirements.
Reserve Bank of Australia Measures to Support Credit Flow
The Reserve Bank of Australia (RBA) has made funding available for banks at a fixed interest rate of 0.25%. This measure will reinforce a lower cash rate, helping to reduce interest rates for borrowers. The RBA funding is incentivised to banks who expand their business lending, especially for new loans to SMEs. To complement the interest rate cut, the RBA is taking active steps to achieve a 0.25% yield on Australian Government securities
Support for Non-ADI and smaller ADI lenders in the securitisation market
The Australian Office of Financial Management (AOFM) is receiving $15 billion in funding to invest in structured finance markets. The target of this measure is smaller authorised deposit taking institutions (ADI) and non-ADI lenders.
Australian Prudential Regulatory Authority (APRA) Supporting Lending
APRA is temporarily changing their expectations of a banks’ capital ratios in order to support their lending.
Supporting Individuals and Households
JobSeeker Payment
In response to a sudden and sharp increase in the number of unemployed Australians, a new streamlined processing of JobSeeker claims was introduced. JobSeeker is a pre-existing welfare payment available to eligible Australians while they are unemployed and in the active pursuit of gainful employment.
An employee cannot be in simultaneous receipt of JobKeeper and JobSeeker payments.
Changes to Other Income Support Payments
Recipients of income support payments are eligible for an additional fortnightly payment of $550 for a temporary six-month period. At the same time, eligibility for the payments has been expanded to allow for more Australians to receive the income support, and the supplementary fortnightly payment.
In addition to the ongoing payments, two separate $750 payments may be made to Australian income support recipients. The first payment was made on 31 March 2020, and the second payment is scheduled for 13 July 2020. The second payment is not available to recipients of the $550 fortnightly supplement. These stimulus injections are intended to increase confidence and domestic demand in the economy.
Changes to Superannuation
Australia’s superannuation program mandates wage contributions to a superfund in the purpose of supporting retirees and ensuring they have the financial means to survive and maintain quality of life. With the COVID-19 outbreak, two new measures have been introduced to allow Australian retirees to manage the impact of recent downturn on their superannuation and financial circumstances.
The first measure is allowing individuals to withdraw up to $10,000 from their superannuation in 2019-20 and an additional $10,000 in the following financial year. This withdrawal will not be taxed, nor will it affect income testing for income support payments.
The second measure is a temporary reduction of Superannuation drawdown requirements for retirees with account-base pensions. A reduction of 50% applies in both 2019-20 and 2020-21. This will lower the need to sell investment assets to fund minimum drawdown requirements.
Reduction of Social Security Deeming Rates
Both upper and lower social security rates were dropped by 0.5% on 12 March 2020. Another reduction has been announced, from 1 May 2020 the upper rate will be 2.25% and the lower 0.25%. This measure is in response to lowering interest rates and the reduction of savings income. Practically, this will mean an average increase of $105 in the Age Pension during the first year.
在意大利，收购交易(M&A)在大部分情况下通常是通过收购股权(“股票交易”)、公司或公司分支机构(“资产交易”)进行的。主要由于税收原因，股票交易比资产交易更为频繁，尽管资产交易可以更好地限制买方的风险。股票交易与资产交易之间的主要区别在于风险和买方与卖方之间的关系。
在意大利市场上更倾向于通过收购股权（“股票交易”）而非收购公司或公司分支机构进行收购（M&A）
在意大利，大多数情况下，收购交易(M&A)的执行是通过购买股份(“股票交易”)或购买公司与公司分支机构(“资产交易“)的方式进行的。其他的形式，如合并，则不那么常见。
通过购买被收购公司的股权或股份(“股票交易”)，买方间接获得公司的全部资产(资产、负债、关系)，从而承担与公司先前管理有关的所有风险。
通过收购公司或公司分支机构(“资产交易”)，买方获得一组为经营业务而组织起来的商品和关系（物业、工厂、员工、合同、信贷、债务等）。资产交易的好处在于，双方可以确定转让的范围，从而限制交易的法律风险。
尽管有这一优势，意大利的大多数收购业务都是通过收购股权进行的。2018年，被购买的股份(股权和股票)约为78400股，而被出售的股份约为35900股(资料来源:：www.notariato.it/it/news/dati-statistici-notarili-anno-2018)。应当指出的是，业务转让的数字还包括个体企业家所经营的迷你或小型公司，对于这些公司而言，股权交易的替代方案（尽管可行，但可以通过将公司转让给新公司和出售来实现）由于成本原因，在实践中不可行。
意大利收购业务的经济成本(M&A)
与购买公司（“资产交易”）相比，购买股份（“股权交易”）的主要原因是运营的税收成本考虑，让我们看看它们通常是什么。
在购买股份时，卖方应缴的直接税款按下列百分比计算:
- 如果卖方是一家资本公司（有限股份公司、有限责任公司、有限合伙股权责任公司），税率是资本收益的24％。但是，在某些条件下，c.d. PEX（参股豁免）章程仅对5％的资本收益适用24％的税率。
- 如果卖方是合伙企业（简单公司、普通合伙公司、有限合伙公司），则应对资本收益全额征税，但是在某些情况下，应纳税额限制为资本收益额的60％。在这两种情况下，适用税率是指为透明性分配收入的每个股东的边际税率。
- 如果卖方是自然人，则资本收益率为26％。
在收购股权时，通常向买方收取200欧元的注册税。
即使是在购买公司时，卖方应支付的直接税款也是根据资本收益计算的。如果卖方是资本公司，则税率是资本收益的24％。如果卖方是合伙企业（与自然人合伙人合伙）或个体企业家，则税率取决于卖方的收入。
在购买公司时，通常由买方支付的间接税款是根据分配给每一转让资产的价格份额计算的。价格是转让资产减去转让负债所得的金额。百分比因资产类型而异。总的来说:
- 流动资产征收3％的注册税;
- 商誉需缴纳3％的注册税;
- 建筑物需缴纳9％的注册税 (以及每笔固定金额50欧元的抵押和地籍税);
- 土地需缴纳9％至12％的注册税 (视买方而定)，抵押和地籍税的税额均为50欧元。
如公司由不同税率的资产组成，且双方同意一次性付款，而不区分单个资产的可归属价值，则应将最高税率适用于一次性付款。
应当强调的是，税务机关可以对双方的不动产和商誉进行估价，从而产生增税的风险。
股票交易和资产交易：面向第三方的风险和责任
在购买股份或股权（“股票交易”）时，买方间接承担所有与公司先前管理有关的风险。
另一方面，在收购公司或公司分支机构（“资产交易”）时，双方可以决定转让的范围(资产和关系)，从而在相互关系中确定买方所承担的风险。
但是，在与第三方的关系方面，有一些规则是当事各方不能违背的，这些规则对买卖双方的风险有重大影响，从而对双方之间的谈判协定有重大影响。主要内容如下:
- 雇员:与公司买家的雇佣关系继续存在。转让时，买卖双方应对雇员的所有索赔承担连带责任（条款2112 c.c.)。
- 债务：卖方有义务偿还直至转让之日的所有债务。买方有义务承担会计账目上产生的债务（条款2560 c.c.)。
- 债务和税务责任：卖方有义务支付转让之日之前的债务、税款和税务处罚。
- 除了会计账簿产生的与应付税款有关的义务外 (条款2560 c.c.)，买方还应承担税款和罚款，即使这些税款和罚款未出现在会计账簿中，也应遵守以下限制 (法令472 / 1997，条款14):
- 卖方事先执行的利益;
- 不超过所购买公司或公司分支机构的价值;
- 对于尚未存在争议的税收和罚款，责任只适用于与公司被出售当年及之前两年有关的税收和处罚;在公司被出售前两年之前的税收和处罚，其责任仅适用于该期间内有争议的税收和罚款;
- 在税务机关契约移转日期产生的债务范围内。税务局必须出具一份证明，证明存在争议和债务。申请后40天内未签发的否定证书可免除买方的合同责任:
- 合同：双方可以选择转让哪些合同。就转让的合同而言，即使未经第三方同意，买方也会接管不属于个人性质的经营合同(即卖方提供客观或主观上不可互换的个人性质的给付))。此外，如果有正当理由 (例如，买方由于其财务状况或技术能力不能保证能够履行合同)，第三方可以在3个月内退出合同(条款2558c.c.)。
一些应对风险的工具
为了应对由第三方责任引起的风险以及与收购相关的一般风险，可以使用各种谈判和合同工具。让我们来看一些例子。
在收购公司或公司分支机构(“资产交易”)时:
雇员：可以与雇员就合同条件的变更达成一致，并免除买卖双方的连带责任（来自条款2112 c.c.）。为了使协议有效，必须在“受保护”的基础上(例如在工会的协助下)与雇员达成协议。
债务：
- 通过相应降低价格将债务转移给买方；价格的降低还减少了运营的财政成本。如果发生债务转移，则可以根据债权人的要求获得卖方解除债务责任声明，以保护卖方 (来自条款2560 c.c.); 或者可以预计，买方将在公司转让（“关闭”）的同时偿还债务。
- 对于未转让给买方的债务，请从债权人处获得使买方免于承担责任的声明（来自条款2560 c.c.）
- 对于无法获得债权人解除声明的债务，应同意有利于卖方的担保形式（针对转让债务）或有利于买方的担保形式 (针对非转让债务)，例如，推迟部分价格的付款 (对买方有利)，部分价格的信托保证金 (“托管”)，银行担保或由股东承担。
债务和税务责任:
- 向税务局申请法令472/1997的条款14中关于未决债务和争议的证明；
- 通过相应降低价格将债务转移给买方；
- 商定有利于卖方的担保形式（针对转让债务）和有利于买方的担保形式（针对未转让债务或尚未解决的争议），例如上文所述的一般债务担保。
合同：针对转让合同:
- 检查卖方在转让之日之前所承担的给付义务是否已得到适当履行，以避免可能妨碍合同履行的第三方诉讼的风险;
- 至少对于最重要的合同(除非出于保密原因)，应寻求第三方对合同转让批准的确认。
在收购股份的交易（“股票交易”）中，买方间接承担与公司先前管理有关的所有风险，其中一些工具包括:
- 尽职调查。 对公司进行深入的法律、税务和会计尽职调查，以便在谈判和合同中预先评估并管理风险。
- 声明、担保(R&W)和赔偿。在收购合同(“股票购买协议”)中，预先就公司的情况向卖方提供一系列详细的声明和担保，以及在违约情况下的赔偿义务（“商业担保”：财务报表、参考资产负债表、合同、诉讼、环保法规、开展业务的授权、债务、信贷等）。声明和担保的谈判通常通过管理尽职调查的结果来实施（例如：尽职调查引起的争议不包括在声明、担保和赔偿中，各方在确定价格时须予以考虑）。在意大利的股票交易中，关于公司状况的声明和保证（“业务保证”）以及赔偿义务的规定是必要的，因为如果没有这些条款，如果公司的实际情况与购买时考虑的情况不同，买方则无法从卖方那里获得赔款或补偿（除非在极端情况下、极为罕见）。
- 为买方提供担保。保证买方在对方不遵守声明和担保的情况下获得有效补偿（或部分补偿）的工具。 其中包括：（a）延长部分金额的支付；（b）在声明和担保期间，以及在发生争议到确定争议的阶段，以信托保证金（“托管”）的形式支付部分金额； （c）银行担保； （d）W＆I保单，即涵盖在违反声明和担保的情况下买方所承担风险的最高赔偿额（特定风险除外）的保险合同。
其他影响股票交易和资产交易选择的因素
当然，通过股票交易或资产交易在意大利进行收购交易的选择，也取决于交易的税收成本以外的其他因素。以下是一些情况：
- 购买部分业务。 当资产交易不涉及卖方整个公司的购买而仅涉及其一部分（公司分支机构）时，则选择资产交易。
- 问题公司的状况。当目标公司的状况非常棘手，买方无法承担所有来自公司先前管理的风险时，就选择资产交易。
- 保留卖方的角色。当你想让卖方在被收购的公司中占有一席之地时，你可以选择股票交易。在这种情况下，除了在管理中发挥作用外，卖方通常会持有少数股份，并在一定时间后拥有退出条款（出售权和认购权）。这些条款通常将价格与未来的结果联系起来，因此，从买方的利益出发，可以激励卖方发挥管理作用；从卖方的利益出发，可以增强购买时未实现的利润前景。
Belgian residents working abroad, e.g. in Luxembourg, may have a company car registered in their country of employment. The Belgian regional tax administrations exercise checks to verify whether the user of the company car complies with regional vehicle tax rules allowing an exemption from registration of the car in Belgium and from Belgian vehicle taxes. Especially in the Walloon Region this has given rise to a lot of litigation in recent years, especially regarding Luxembourg workers residing in Belgium.
Belgian vehicle registration rules stipulate that the user of the car must have on board of the car a copy of his employment contract as well as a document drawn up by the foreign employer showing that the latter had put the vehicle at the employee’s disposal. If the driver cannot produce these documents, he is supposed by the Walloon tax administration to have violated the legal obligation to register the car in Belgium and to pay Belgian vehicle taxes.
The consequences are severe. In addition to the vehicle taxes, the driver must pay a hefty fine. Failing to pay these large amounts (often more than EUR 3,000.-) on site at the time of the road check, the authorities withhold the on-board documents of the car, which results in the immobilization of the car.
The Walloon tax administration, initially, did not pay back the vehicle taxes even if it was proven afterwards that the conditions of the exemptions of registration in Belgium and Belgian vehicle taxes were met. At first, the tax administration claimed that the vehicle taxes remained due if the employee showed the required documents only afterwards to the competent authorities. The position of the Walloon tax administration was that the employee must be able to produce the required documents on the spot during the check to be exempted from registration and vehicle taxes in Belgium.
In a recent reasoned order, the European Court of Justice (‘ECJ’) confirmed that this harsh position by the Walloon tax administration was in violation of the freedom of movement for workers. A reasoned order is issued by the ECJ a.o. where a question referred to the ECJ for a preliminary ruling is identical to a question on which the ECJ has previously ruled or where the answer to the question referred for a preliminary ruling admits of no reasonable doubt.
In other words, the ECJ confirms that the requirement to have the abovementioned documents permanently on board of the vehicle to be exempted from Belgian registration and Belgian vehicle taxes is manifestly disproportionate and thus a violation of the freedom of movement for workers.
From a practical perspective, this ruling confirms that an employee resident in Belgium but working in another member state does not have to pay the Belgian vehicle taxes (or is entitled to be paid back) if he demonstrates after the check that he met the conditions to be exempted from registration and vehicle taxes in Belgium.
The legal form of a GmbH (limited liability company) is very popular in Germany and is also one of the most frequently chosen forms of market entry for foreign investors. Its establishment is relatively simple and quick, the GmbH offers shareholders the desired limitation of liability and enjoys a high reputation in business relations, both in Germany and abroad. The statutory minimum share capital of 25,000 euros documents a certain seriousness and is intended to protect creditors.
However, the opening of a German bank account to which the shareholders are to pay their capital contributions is usually a factual problem when setting up a GmbH; the capital stock must be provided before the company is registered in the German commercial register. On the one hand, it is not uncommon for German financial institutions to refuse to open accounts to foreign shareholders per se. On the other hand, it is almost standard today that the opening of a bank account for a new company in which foreign shareholders are to hold shares can take several weeks for various internal bank reasons. In practice, this means that the entry of the company in the commercial register can be suspended for several weeks or even months. Valuable time is lost, especially if you are about to start a project in Germany and everything is already prepared.
Do you have to accept this unnecessary delay? No, not at all.
There is a much faster and more acceptable way.
A bank account is not required for the establishment of a GmbH. The German corporate law does not provide for this either. In practice, however, it has become common to open an account directly when a company is established. Of course, this only makes sense if the account is opened quickly and immediately. If, however, it is foreseeable in advance that there might be problems opening an account with a German bank, a different procedure is recommended.
The managing director of the newly established GmbH (he is usually already appointed during the notarial establishment of the company) has to assure in the registration of the new company to the commercial register that the capital contributions are in the free and unrestricted disposal of the management. The law does not stipulate that this can only take place if the payment is made to a bank account of the GmbH. It is also possible and permissible for the managing director to opens a company cash box (cash register) in which the shareholders hand over the capital contributions in cash and the managing director notes the payment in the cash book. A copy of the cash book or a confirmation of the managing director can be handed over to the notary as proof of the payment, who then also forwards this copy to the commercial register.
In the incorporation practice and experience of the author, this procedure has so far been accepted by the commercial registers without objection. All GmbHs founded in this way were successfully registered.
The author of this post is Dominik Wagner.
A legal due diligence of a Brazilian target company should analyze the existence and the content of Agency Agreements, including values paid to the agent and the nature of such payments and the factual situation of the target’s agents, in order to evaluate potential contingencies.
One usual suspect in legal due diligences of Brazilian target companies in M&A transactions that should not be overlooked is the existence of agency agreements, due to:
- the obligation to indemnify the agent stipulated by law: at least 1/12th of all commissions paid throughout the entire term of the agency agreement; and
- the risks for the agency being disregarded and considered as an employment relationship, subjecting the principal to compensate the agent as an employee with all rights, benefits, taxes and social contributions.
This should be considered for evaluation of potential contingencies and the impacts on the valuation of the target.
No doubt that agents can be an important component of the sales force of the business and can be strategic for the activity of the principal, in view of a certain independence and for not increasing the payroll of a company.
On the other hand, under Brazilian laws, the protective nature of the agency demands the principal a considerable level of attention.
Indemnification
Brazilian Federal Law No. 4,886/65 as amended – the Brazilian Agency Law – determines that the agent is entitled to, at the termination of an agency agreement, receive an indemnification of 1/12th calculated over all the commissions paid throughout the duration of the entire period of the agency agreement.
The Brazilian Agency Law stipulates that if the parties sign a new contract within 6 months after the expiration of the previous, the relation between agent and principal shall be deemed as the same relationship and thus, the duration to calculate the indemnification shall encompass the entire period (past and subsequent contract).
Termination by the agent
The Brazilian Agency Law also stipulates situations that agent could terminate the contract and still be entitled to receive the 1/12th indemnification:
- reduction of the activities in disagreement with the contractual stipulation
- breach of exclusivity (territory and/or products), if so stipulated in the agreement
- determination of prices that makes the agency unfeasible and
- default on payment of the commissions
- force majeure
Termination without cause
Termination without cause can be done, upon payment to agent of the indemnification and with a previous notice of at least 30 days, in which situation the agent shall receive the payment of 1/3 of the remuneration received during the previous 90 days prior to the termination.
Can principal avoid the indemnification?
The only cases where the 1/12th indemnification would not be applicable are when the contract is terminated by principal with cause. The Brazilian Agency Law has limited situations for principal to terminate the contract with cause:
- acts by agent causing disrepute of the principal
- breach of obligations related to the agency activities
- criminal conviction related to honor, reputation
These situations shall be clearly demonstrated. Producing the sufficiently strong evidence of the facts to configure cause for termination may not be an easy task, considering some of the facts may be subject to construing and interpreting by the parties, witnesses and ultimately the judge.
As a result, from past experiences, it is rare to see principals in conditions not to incur in the 1/12th indemnification.
Potential risk: configuring employment relationship
In addition to the indemnification, the activities developed by the agent could eventually be deemed as performed by a regular employee of the principal and, in this case, principal could be subject to compensate the agent as an employee.
Agent vs. employee
For the appreciation of the employment relationship, the individual acting as agent shall file a labor claim and demonstrate the existence of the employment relationship.
The Labor Court judge will consider the factual situation, prevailing upon the written agreements or other formal documents. The judge may rely on e-mails, witnesses and other evidence.
The elements of an employment relationship are:
- Individual: in case the individual acts by himself to perform the services; Personal services: the services are in fact performed by the individual specifically to the Principal;;
- Non-eventuality – exclusivity: the services are rendered in a regular basis;
- Subordination: key factor – the individual has to follow strict instructions directed by principal, such as reporting to an employee of the principal, determined visits;
- Rewarding – fixed remuneration: the individual is awarded regular amounts and expenses allowances
In the event the individual can demonstrate the existence of the elements to configure an employment relationship, he/she could have an award to entitle him/her to have his remuneration considered as of a regular employee for the last 5 years.
As a result, the individual would be awarded the payment of Christmas bonus (equivalent to 1 monthly remuneration per year), vacation allowance (1/3 of a monthly remuneration per year), unemployment guarantee fund (1 monthly remuneration per year) plus other benefits that he/she would be given as an employee of principal (based on the collective bargaining agreement between the employees’ and employers’ unions). The company would also be obliged to make the payment of the co-related social security contributions.
Needless to say, the result could turn into a considerable potential contingency.
The author of this article is Paulo Yamaguchi
The sale and purchase of agricultural land under Polish law have been recurrently amended over the past few years.
For the most part legal provisions aim to protect the country’s food resources as well as to be self-sustained and independent from foreign food suppliers. Agriculture is considered to be one of the decisive economic branches and it’s the Lawmaker’s according belief that it should be accurately regulated. Consequently, the sale and purchase of land which may be used for farming are subject to various limitations, as well as the sale and purchase of company shares or business assets (fonds de commerce) holding such land.
This topic, therefore, is crucial to foreign investors. In this article, I would like to highlight some key points which should be taken into account by foreign investors in setting up a joint venture with a Polish counterpart owning a real estate or acquiring shares in an already existing entity that owns a real estate. These situations are very frequent and the legal risks related to the agricultural land cannot be neglected.
Agricultural land is defined as any land which is qualified as such in the zoning regulation. The agricultural character subsists not only when the real estate is already utilized for agricultural purposes but also if such use is merely potential. Here arises the first issue: it is a matter of facts, not law whether such utilization is conceivable and often arguable.
One may imagine a plot of land which is not used for farming at the moment but still suitable to be used in such a way in the future. Such a real estate will be subject to the legal limitations and the sale and purchase of it offer a significant legal and commercial issue. This pertains green fields in the outskirts of a city which are generally marked as agricultural land under the zoning plan and form an ideal target for investors who wish to construct a production facility (e.g. factory), warehouse or start a business far from farming. Except if planning the construction of residential buildings they will have to face severe legal requirements.
Another point is that in Poland not every region has a zoning plan. Often there is none and the legal character of a given land has to be determined on the basis of other sources; such as a land register or a general concept of zoning plan adopted by a single municipality. Oftentimes the data arising from the two sources are contradictory.
Issue concerns only out of city real estate
The upside is that these strict regulations do not apply to agricultural land situated within the administrative city limits.
Minimum surface: 1 ha and 5 ha
The statutory limitations apply only in case if the land exceeds a certain surface.
For share deals (transactions where the shares in a company or rights in a partnership are transferred) the minimum surface required is 5 ha. If a company or a partnership owns an agricultural land below 5 ha the share deal can be done without further complications.
For asset deals (simple transactions resulting in a transfer of land property) the relevant figure is 1 ha (see below).
Transfer of land
The transfer of agricultural land having a surface exceeding 1 ha to a non-farmer, requires the approval of the State. This is given through an administrative decision.
If the surface is less than 1 ha, transfer approval is not mandatory, but the State has a right of first refusal with respect to such land. As mentioned earlier, these rules do not apply to the real estate situated within the cities.
For these reasons an asset deal in Poland may produce complications.
Transfer of shares in a capital company
The share deals are comparatively easier, even if the company owns an agricultural real estate. They do not require the approval of the State.
However, the State has a right of first refusal with respect to shares in a company (limited liability company or joint stock company) which owns an agricultural land having a surface of at least 5 ha. It has a right to examine the company’s papers and books as well as to request data from the company in order to establish the legal and financial state of the real estate.
The shares owner can only enter into a conditional share sale and purchase agreement with a third party. Such an agreement is conditioned by the mentioned right to a first refusal within a statutory time period of 1 (one) month. However, there is a very important deviation from the regular right of first refusal. If the State considers the contractual price does not meet the market value of the shares it may demand that the share price which the State itself will pay is set by a court. Such price revision does not extend to regular share deals or asset deals. And therein we see the significant risk for the seller.
Transfer of shares in a partnership and accession of a new member
Different rules apply if the sale and purchase agreements relating to the rights in a partnership (general partnership, limited partnership, a partnership limited by shares or professional partnership) owning an agricultural land of at least 5 ha surface.
In such a case, if a current member transfers his/her rights to a third party or a new member adheres, the company is obliged to inform the State of such transfer or adhesion. Subsequently, the State has a right take over the property of the land and to set a price for it unilaterally. Such a price should reflect the market value of the concerned real estate. However, in many cases, the partnership may find the price too low and wishes to challenge it. The partnership thus has to go to court asking for a price revision.
Real estate or shares in a company or a partnership as a non-cash contribution
It is not possible to avoid the above complications if instead of selling the shares or a real estate we transfer them to a purchaser through a different legal act. For example, one may wish to confer it as a non-cash contribution to a different company, exchange it for some other asset or donate it to a third party.
In those cases, very strict rules apply too. The State may take over respectively the land or the shares. The State sets the price unilaterally. The land- or shareowner may challenge the price in court but he has to apply within 1 month from take-over.
Mergers, divisions, and transformations of companies and partnerships
The right to take over the property of a real estate applies similarly to mergers, transformations, and divisions of companies and partnerships. There is a significant legal and financial risk connected to this kind of M&A.
Null and void agreements
If an agreement related to a transfer of land, shares in a company or rights in a partnership does not match all legal requirements it is null and void. In such a case the Buyer does not acquire the rights for which he/she has paid. The value of the real estate in question or importance for the company’s business is irrelevant. Even if the entity owns a relatively small real estate which currently is useless but potentially may be used for agricultural purposes and it is not properly identified within the due diligence process – this may trigger the invalidity of the whole transaction.
Be careful!
For the above reasons the buyer craving to purchase shares in Polish companies or partnerships should carefully investigate if his/her target entity is an owner of any real estate and – if so – what legal status of it might be. If it turns out that the entity owns an agricultural land of at least 1 ha then the share sale and purchase transaction should be performed very carefully and by specialized lawyers. If the relevant procedures are omitted the current share owner may lose the ownership of the shares and the intended purchaser may lose money in case the irregularity is discovered later on, when e.g. the seller gets insolvent, has been liquidated or simply disappeared.
After the transition period, in the last 10 years, the Republic of Serbia has become a stable and well organized society. The stable government, the status of the candidate country for the EU membership, as well as the traditionally well-balanced relations with both the East and the West, have led Serbia to become an increasingly interesting investment opportunity for both domestic, and foreign investors (total production increased of 2.3% from January to September 2018).
Legal framework and tax benefits
Being on the road to the EU membership, the Republic of Serbia has already begun to harmonise its legislation with the EU acquis communautaire, opening its market to foreign investments and striving to follow the current markets trends. On the other side, relationships with China and Russia are also traditionally exceptional good and cooperative.
In line with the aforementioned, the Serbian government seeks to attract as many foreign investors as possible, primarily by providing significant tax benefits, such as: reduced burden on earnings up to 75%, temporary tax exemption of the corporate profits, avoidance of double taxation, possibility of duty-free imports of raw materials and semi-finished products, duty-free imports of machines and equipment, as well as many other benefits.
Setting-up a company
Before presenting a short guidance on setting up a company in Serbia, it is notable to highlight that companies in Serbia can be established by any natural or legal person, both domestic citizens and non-residents. Therefore, the following basic rules of establishment could be of interest for the foreign readers.
Serbian Company Law recognizes four types of companies: Joint Stock Company, Limited Partnership, Partnership and Limited Liability Company. In this post we will focus on the latter, describing in a few lines the process of establishing a LLC (in Serbian: Društvo sa ograničenom odgovornošću – DOO) in Serbia.
A LLC is a company that is established by one or more legal and/or natural persons (which are the members of the company), for the purpose of performing a particular business under a common business name. Regardless of whether the LLC is owned by one or more member, remains, however, an entity separate from its members and liable for its obligations only with its assets.
The basic conditions that a LLC must fulfil in order to be able to submit a proper registration to the Business Registers Agency are:
- Incorporation act: Memorandum of association, in case of a multi-member LLC / Decision on incorporation in case of a one-member LLC;
- Business Name (in Serbian language in Cyrillic or Latin letters);
- Appointment of the legal representative of the company, i.e. the director;
- In Serbian law, contributions can be monetary or non-monetary (contributions in kind), including contributions in work and services. The minimum subscribed capital (monetary or non-monetary) is 100.00 RSD (equivalent to 1 euro). At the moment of establishment of the LLC, the contributions do not have to be paid in. In such case, the member of the company is obliged to determine the deadline for payment of the contributions, in accordance with the Incorporation Act. The deadline cannot be longer than 5 years after the foundation of the company.
When the aforementioned basic conditions are met, the incorporation procedure continues as follows:
- Registration of the company at the Business Registers Agency. The deadline for submission of the application is 15 days after the date of adoption of the incorporation act. When registered, the company obtains: (i) Registration number (in Serbian: Matični broj (MB)); (ii) Tax Identification Number (in Serbian: Poreski identifikacioni broj (PIB)); and (iii) Health insurance number issued by the Republic Health Insurance Institute.
- Opening a company bank account.
- Registration in the Tax Administration.
- Digital signature (optional).
- Company seal (optional).
The author of this post is Dragan Nikolic.
Each country has its approach and practice on doing business. In Latvia the two most popular forms of running a business are – limited liability company and joint stock company. Establishment of a legal entity is simple, fast and proportionate in costs. A limited liability company can be established with a minimum share capital of EUR 1,00, subject to compliance with certain requirements; whereas share capital of a full-scale limited liability company is EUR 2.800,00. For a joint stock company a share capital of at least EUR 35.000,00 is required.
Types of the companies and their specifics
Limited liability company
The limited liability company (LLC) is one of the most popular corporate structures used in Latvia. A LLC is a private company, the shares of which are not publicly tradable.
In parallel to the LLC, there is also micro-capital LLC permitted with the decreased requirement for the share capital, starting from EUR1. Micro-capital LLC has certain limitations to comply with, inter alia:
- it can have no more than 5 founders (shareholders) all of them being individuals;
- any member of the Board of Directors must also be a shareholder of the company; and
- one person can be a shareholder in only one micro-capital company at a time. A micro-capital LLC is mostly used for business activities of a small scale and start-ups.
When it comes to establishing a LLC the main criteria are:
- any amount of founders (shareholders), no nationality criteria, both individuals and legal entities permitted. For a micro-capital LLC – not more than 5 individuals;
- share capital – minimum of EUR 2.800,00. For a micro-capital LLC, share capital can be any in a range from EUR 1,00 to EUR 2.800,00;
- for a regular LLC, the share capital can be paid up either by financial means or investment in kind;
- the Board of Directors of a LLC must consist of at least one member. The same requirement is applicable to micro-capital LLCs.
The composition of shareholders and any changes in relation thereto are notified to the Company Register (Commercial Register), which is a public register.
The management structure of the LLC consists of the Board of Directors, Supervisory Board (if any) and Shareholder Meeting.
Joint stock company
A joint stock company (JSC) is a public company, the shares (stock) of which may be publicly tradable.
The main criteria for establishment of a JSC:
- any amount of founders, no national criteria;
- share capital at least EUR 35.000,00;
- share capital can be paid up either by financial means or investment in kind;
- the Board of Directors shall consist of at least one member. If the stock of the JSC is publicly traded – at least 3 members.
The management structure of the JSC consists of the Board of Directors, Supervisory Board and Shareholder Meeting.
When it comes to differences between LLC and JSC it shall be noted that shareholder register in a JSC is an internal document of the company; whereas in respect to LLC all shareholders are showed in the public data base of the Company Register (Commercial Register).
Registration process – must know tips
Registration of a company in Latvia involves necessity to submit more or less same documents as in any other country, like application for registration, decision or agreement on incorporation and articles of association. However there are few specific aspects to be taken into account.
Name of the company
Before applying for registration, first check whether the name desired is available – both in trade mark register and data base of the Company Register (Commercial Register).
Please also note that there are certain local requirements on the company names, inter alia:
- Latvian or Latin letters to be used solely;
- it is permitted to use only symbols like – &, @, %, +, =;
- it is prohibited to include in the name words “Republic of Latvia”.
Share capital
For micro-capital LLC payment of the share capital must be performed in full before applying for registration of the company. In its turn for a regular LLC the share capital must be paid up in amount of at least 50% and for a JSC in amount of 25%.
Payment of the share capital always involves opening a temporary account in a local bank.
In case share capital is in some part covered by investment in kind, it should be noted that evaluation of a certificated expert of such investment may be required.
Address
The Board of the company must ensure receipt of correspondence at the company’s registered office. While there is a practice to use virtual offices, though in each case it must be evaluated whether such address will be sufficient for the operation of the company.
Moreover:
- each desired address must be checked in official state address data base (kadastrs.lv) to indicate the address correctly in the registration documents;
- only premises or building can be used as registered office but not a property consisting only of a land;
- written consent of the owner of the real estate used as address will be required for registration of the company.
Document signing
It must be noted that certain documents related to registration of the company will require approval of notary public and legalization (Apostille). Documents can be bilingual; however always one language must be Latvian.
Registration
A company will be registered within 1-3 working days.
If concurrently applied also registration with tax administration (State Revenue Service) can be very fast made.
State fees for registration are reasonable, but it should be noted that additional expenses like for assistance of a lawyer, notary fees or translation expenses will come on the top.
Taxation
Each of these corporate structures is full-scale taxpayers in Latvia. They are subject to corporate income tax at a rate of 20% divided by ratio 0.8, such ratio being applied for the calculation of the gross taxable base out of net paid dividends (so practically a rate of 25% is applied). Once the value of services provided or goods supplied within last 12 months exceeds EUR 40.000,00, a company shall be registered with the Value Added Taxpayer’s Register of the State Revenue Service.
From an income tax perspective, small companies corresponding to certain statutory criteria (like micro- capital LLCs) may also apply for a micro-enterprise tax payer status, which is applied to turnover per taxation period of a micro-enterprise. The rate of micro-enterprise tax applied is 15% subject to adjustments in specific cases provided for by the law.
As regards tax reporting, since 2018 the annual report on income is cancelled. Tax payers shall submit a return and pay the corporate income tax each month by the 20th day of the following month. Taxpayers who have a taxation period of a quarter shall submit a tax return and pay tax every quarter by the 20th day of the month following the relevant quarter. With respect to value added tax, the annual tax return shall be submitted by May 1 of the year following the taxation period. Micro-enterprise tax payers have special reporting rules.
It shall be also noted that in Latvia companies have a statutorily designated possibility to halt and restore their economic activity. Activity can be halted for up to 3 years, and during this period, as a general rule, the company shall be subject to regular tax reporting duties.
It shall be noted that information provided in this article covers only general lines of the requirements and processes, therefore it is advised to contact an experts and seek advice to run the processes properly.
越南 
中国 
埃及 
西班牙 
荷兰 
法国 
美国 写信给 Ferenc
Germany – How to set up a company – GmbH without opening a bank account
10 12 月 2019
-
德国
- 公司法
Summary – While China’s economy bore the brunt of the initial economic impact, the COVID-19 outbreak is bringing both direct and indirect complications for economies around the world. With China’s key role in the supply chain and manufacturing, in combination with lockdowns restricting movement, trade and business – fiscal authorities are implementing new measures to protect and stimulate their respective economies.
The Australian Government has announced a series of new regulatory, legislative and administrative changes that strengthen the country’s position moving through the crisis. The International Monetary Fund and the Organisation for Economic Co-operation and Development forecast Australia’s growth outpacing many comparable countries, including France, Canada, Japan, Germany, and the UK – all without endangering Australia’s debt sustainability.
Australia’s Response
The Australian Federal Government has, in a series of announcements, revealed a consolidated package of $320 billion AUD or $200 billion USD[1] support – equivalent to 16.4% of the country’s nominal GDP. They have made a clear stance that Australia is prepared to protect its national interest and respond to the broad and prolonged impact of the outbreak.
The stimulus measures can be considered in three separate categories, each with an intended purpose:
- support businesses;
- support the flow of credit; and
- support individuals and households.
The measures come with consideration of varying factors, including helping with the management of short-term cash flow, assist severely affected communities and regions, to prop up individuals and households dealing with sudden loss of employment, maintaining employees’ connections with business, and to ensure the continued flow of credit.
The Coronavirus Economic Response Package (Payments and Benefits) Act 2020 and Coronavirus Economic Response Package Omnibus (Measures No. 2) were passed by parliament on 8 April 2020. More legislation is expected to come as Australian authorities continue to study the broader prolonged impacts of COVID-19.
State and local governments within Australia have also announced a wide range of measures in addition to those announced by the Federal Government.
[1] Based on AUD-USD exchange rate 21 April 2020
Support for Businesses
JobKeeper Subsidy
The Australian government has committed $130 billion in ongoing support to business through the JobKeeper subsidy. The payment is available to businesses that are suffering a reduction in turnover to keep Australians employed during the outbreak. The JobKeeper subsidy is a gross fortnightly payment of $1,500 for each eligible employee for a 6-month period. The full $1,500 payment is to be paid to each eligible employee, either as a partial subsidy if their wage is greater than $1,500, or as a full subsidy if their wage was previously less than $1,500. The gross payment will be taxed at normal rates, although employers are not obliged to make additional superannuation contributions.
The scheme includes sole traders as well as businesses and not-for-profits (NFP).
Boosting Cash Flow for Employers
Small and medium businesses, as well as NFP are eligible for cashflow boosts to further assist in retaining employees. Tax-free cash flow boosts of $20,000 to $100,000 will be delivered to eligible businesses and organisations with aggregated annual turnover under $50 million. The Government has specifically acknowledged the increasing demand for NFP services during this crisis.
In a series of two payments, each payment will be equivalent to the business’ withheld salary and wages, with a minimum of $10,000 and maximum of $50,000. The first cashflow boost is set to be available between March and July 2020; the second boost will be made to businesses who received the first and will be of an equal sum, to be paid between June to September 2020. By splitting the support into two equal payments, the intention is to provide continued cash flow support over a longer period – increasing confidence and assisting businesses to maintain their operations.
Temporary Relief for Financially Distressed Businesses
Recognising the need for a safety net to allow businesses to resume operation post-crisis, this measure provides legislative support to financially distressed businesses. The temporary changes include reducing thresholds for creditors to issue statutory demands and initiate bankruptcy proceedings, increasing time available to respond to statutory demands, relieving directors from personal liability for trading while insolvent, and providing flexibility in the Corporations Act 2001 when dealing with unforeseen circumstances stemming from the COVID-19 crisis.
The Australian Taxation Office is willing to tailor solutions for directors and owners currently suffering. These may include reductions in payments or deferrals and withholding enforcement actions.
Changes to Asset Write-Off and Depreciation Deductions
The threshold for instant asset write-off is increased from $30,000 to $150,000 and access is expanded to businesses with aggregated annual turnover less than $500 million (previously $50 million) until the end of the 2019-20 financial year (i.e. 30 June 2020).
Up until the end of the 2020-21 financial years, depreciation deductions are accelerated for businesses under the same $500 million threshold. Upon installation of assets, 50% can be deduced with existing depreciation deduction rates to the balance. This measure is considered an investment incentive for businesses.
Supporting Apprentices and Trainees
Eligible employers may have 50% of an apprentice’s or trainee’s wage subsidised between 1 January 2020 and 30 September 2020. When businesses are unable to retain their apprentice or trainee, the subsidy can be provided to a new employer. As a part of this program, Australia’s National Apprentice Employment Network will provide further support in coordinating re-employment of workers affected by the COVID-19 crisis.
Support for Affected Regions and Industries
$1 billion of stimulus funds is reserved to support regions that are most impacted by the COVID-19 crisis. The purpose is to provide assistance during both the outbreak and the recovery. Further, the Australian airline industry is receiving tax and fee relief, with an estimate value of $715 million.
Support Flow of Credit
Immediate Cash Flow Needs for SMEs
The Government is providing guarantees of 50% for SME lenders to encourage new short-term unsecured loans for SMEs. By increasing lender’s willingness to provide credit, Australian businesses will be in a better position to secure loans and increase their cash flow.
Quick and efficient access to credit for small business
Small businesses will have more and faster access to credit as an exemption is provided to ‘responsible lending’ requirements.
Reserve Bank of Australia Measures to Support Credit Flow
The Reserve Bank of Australia (RBA) has made funding available for banks at a fixed interest rate of 0.25%. This measure will reinforce a lower cash rate, helping to reduce interest rates for borrowers. The RBA funding is incentivised to banks who expand their business lending, especially for new loans to SMEs. To complement the interest rate cut, the RBA is taking active steps to achieve a 0.25% yield on Australian Government securities
Support for Non-ADI and smaller ADI lenders in the securitisation market
The Australian Office of Financial Management (AOFM) is receiving $15 billion in funding to invest in structured finance markets. The target of this measure is smaller authorised deposit taking institutions (ADI) and non-ADI lenders.
Australian Prudential Regulatory Authority (APRA) Supporting Lending
APRA is temporarily changing their expectations of a banks’ capital ratios in order to support their lending.
Supporting Individuals and Households
JobSeeker Payment
In response to a sudden and sharp increase in the number of unemployed Australians, a new streamlined processing of JobSeeker claims was introduced. JobSeeker is a pre-existing welfare payment available to eligible Australians while they are unemployed and in the active pursuit of gainful employment.
An employee cannot be in simultaneous receipt of JobKeeper and JobSeeker payments.
Changes to Other Income Support Payments
Recipients of income support payments are eligible for an additional fortnightly payment of $550 for a temporary six-month period. At the same time, eligibility for the payments has been expanded to allow for more Australians to receive the income support, and the supplementary fortnightly payment.
In addition to the ongoing payments, two separate $750 payments may be made to Australian income support recipients. The first payment was made on 31 March 2020, and the second payment is scheduled for 13 July 2020. The second payment is not available to recipients of the $550 fortnightly supplement. These stimulus injections are intended to increase confidence and domestic demand in the economy.
Changes to Superannuation
Australia’s superannuation program mandates wage contributions to a superfund in the purpose of supporting retirees and ensuring they have the financial means to survive and maintain quality of life. With the COVID-19 outbreak, two new measures have been introduced to allow Australian retirees to manage the impact of recent downturn on their superannuation and financial circumstances.
The first measure is allowing individuals to withdraw up to $10,000 from their superannuation in 2019-20 and an additional $10,000 in the following financial year. This withdrawal will not be taxed, nor will it affect income testing for income support payments.
The second measure is a temporary reduction of Superannuation drawdown requirements for retirees with account-base pensions. A reduction of 50% applies in both 2019-20 and 2020-21. This will lower the need to sell investment assets to fund minimum drawdown requirements.
Reduction of Social Security Deeming Rates
Both upper and lower social security rates were dropped by 0.5% on 12 March 2020. Another reduction has been announced, from 1 May 2020 the upper rate will be 2.25% and the lower 0.25%. This measure is in response to lowering interest rates and the reduction of savings income. Practically, this will mean an average increase of $105 in the Age Pension during the first year.
在意大利，收购交易(M&A)在大部分情况下通常是通过收购股权(“股票交易”)、公司或公司分支机构(“资产交易”)进行的。主要由于税收原因，股票交易比资产交易更为频繁，尽管资产交易可以更好地限制买方的风险。股票交易与资产交易之间的主要区别在于风险和买方与卖方之间的关系。
在意大利市场上更倾向于通过收购股权（“股票交易”）而非收购公司或公司分支机构进行收购（M&A）
在意大利，大多数情况下，收购交易(M&A)的执行是通过购买股份(“股票交易”)或购买公司与公司分支机构(“资产交易“)的方式进行的。其他的形式，如合并，则不那么常见。
通过购买被收购公司的股权或股份(“股票交易”)，买方间接获得公司的全部资产(资产、负债、关系)，从而承担与公司先前管理有关的所有风险。
通过收购公司或公司分支机构(“资产交易”)，买方获得一组为经营业务而组织起来的商品和关系（物业、工厂、员工、合同、信贷、债务等）。资产交易的好处在于，双方可以确定转让的范围，从而限制交易的法律风险。
尽管有这一优势，意大利的大多数收购业务都是通过收购股权进行的。2018年，被购买的股份(股权和股票)约为78400股，而被出售的股份约为35900股(资料来源:：www.notariato.it/it/news/dati-statistici-notarili-anno-2018)。应当指出的是，业务转让的数字还包括个体企业家所经营的迷你或小型公司，对于这些公司而言，股权交易的替代方案（尽管可行，但可以通过将公司转让给新公司和出售来实现）由于成本原因，在实践中不可行。
意大利收购业务的经济成本(M&A)
与购买公司（“资产交易”）相比，购买股份（“股权交易”）的主要原因是运营的税收成本考虑，让我们看看它们通常是什么。
在购买股份时，卖方应缴的直接税款按下列百分比计算:
- 如果卖方是一家资本公司（有限股份公司、有限责任公司、有限合伙股权责任公司），税率是资本收益的24％。但是，在某些条件下，c.d. PEX（参股豁免）章程仅对5％的资本收益适用24％的税率。
- 如果卖方是合伙企业（简单公司、普通合伙公司、有限合伙公司），则应对资本收益全额征税，但是在某些情况下，应纳税额限制为资本收益额的60％。在这两种情况下，适用税率是指为透明性分配收入的每个股东的边际税率。
- 如果卖方是自然人，则资本收益率为26％。
在收购股权时，通常向买方收取200欧元的注册税。
即使是在购买公司时，卖方应支付的直接税款也是根据资本收益计算的。如果卖方是资本公司，则税率是资本收益的24％。如果卖方是合伙企业（与自然人合伙人合伙）或个体企业家，则税率取决于卖方的收入。
在购买公司时，通常由买方支付的间接税款是根据分配给每一转让资产的价格份额计算的。价格是转让资产减去转让负债所得的金额。百分比因资产类型而异。总的来说:
- 流动资产征收3％的注册税;
- 商誉需缴纳3％的注册税;
- 建筑物需缴纳9％的注册税 (以及每笔固定金额50欧元的抵押和地籍税);
- 土地需缴纳9％至12％的注册税 (视买方而定)，抵押和地籍税的税额均为50欧元。
如公司由不同税率的资产组成，且双方同意一次性付款，而不区分单个资产的可归属价值，则应将最高税率适用于一次性付款。
应当强调的是，税务机关可以对双方的不动产和商誉进行估价，从而产生增税的风险。
股票交易和资产交易：面向第三方的风险和责任
在购买股份或股权（“股票交易”）时，买方间接承担所有与公司先前管理有关的风险。
另一方面，在收购公司或公司分支机构（“资产交易”）时，双方可以决定转让的范围(资产和关系)，从而在相互关系中确定买方所承担的风险。
但是，在与第三方的关系方面，有一些规则是当事各方不能违背的，这些规则对买卖双方的风险有重大影响，从而对双方之间的谈判协定有重大影响。主要内容如下:
- 雇员:与公司买家的雇佣关系继续存在。转让时，买卖双方应对雇员的所有索赔承担连带责任（条款2112 c.c.)。
- 债务：卖方有义务偿还直至转让之日的所有债务。买方有义务承担会计账目上产生的债务（条款2560 c.c.)。
- 债务和税务责任：卖方有义务支付转让之日之前的债务、税款和税务处罚。
- 除了会计账簿产生的与应付税款有关的义务外 (条款2560 c.c.)，买方还应承担税款和罚款，即使这些税款和罚款未出现在会计账簿中，也应遵守以下限制 (法令472 / 1997，条款14):
- 卖方事先执行的利益;
- 不超过所购买公司或公司分支机构的价值;
- 对于尚未存在争议的税收和罚款，责任只适用于与公司被出售当年及之前两年有关的税收和处罚;在公司被出售前两年之前的税收和处罚，其责任仅适用于该期间内有争议的税收和罚款;
- 在税务机关契约移转日期产生的债务范围内。税务局必须出具一份证明，证明存在争议和债务。申请后40天内未签发的否定证书可免除买方的合同责任:
- 合同：双方可以选择转让哪些合同。就转让的合同而言，即使未经第三方同意，买方也会接管不属于个人性质的经营合同(即卖方提供客观或主观上不可互换的个人性质的给付))。此外，如果有正当理由 (例如，买方由于其财务状况或技术能力不能保证能够履行合同)，第三方可以在3个月内退出合同(条款2558c.c.)。
一些应对风险的工具
为了应对由第三方责任引起的风险以及与收购相关的一般风险，可以使用各种谈判和合同工具。让我们来看一些例子。
在收购公司或公司分支机构(“资产交易”)时:
雇员：可以与雇员就合同条件的变更达成一致，并免除买卖双方的连带责任（来自条款2112 c.c.）。为了使协议有效，必须在“受保护”的基础上(例如在工会的协助下)与雇员达成协议。
债务：
- 通过相应降低价格将债务转移给买方；价格的降低还减少了运营的财政成本。如果发生债务转移，则可以根据债权人的要求获得卖方解除债务责任声明，以保护卖方 (来自条款2560 c.c.); 或者可以预计，买方将在公司转让（“关闭”）的同时偿还债务。
- 对于未转让给买方的债务，请从债权人处获得使买方免于承担责任的声明（来自条款2560 c.c.）
- 对于无法获得债权人解除声明的债务，应同意有利于卖方的担保形式（针对转让债务）或有利于买方的担保形式 (针对非转让债务)，例如，推迟部分价格的付款 (对买方有利)，部分价格的信托保证金 (“托管”)，银行担保或由股东承担。
债务和税务责任:
- 向税务局申请法令472/1997的条款14中关于未决债务和争议的证明；
- 通过相应降低价格将债务转移给买方；
- 商定有利于卖方的担保形式（针对转让债务）和有利于买方的担保形式（针对未转让债务或尚未解决的争议），例如上文所述的一般债务担保。
合同：针对转让合同:
- 检查卖方在转让之日之前所承担的给付义务是否已得到适当履行，以避免可能妨碍合同履行的第三方诉讼的风险;
- 至少对于最重要的合同(除非出于保密原因)，应寻求第三方对合同转让批准的确认。
在收购股份的交易（“股票交易”）中，买方间接承担与公司先前管理有关的所有风险，其中一些工具包括:
- 尽职调查。 对公司进行深入的法律、税务和会计尽职调查，以便在谈判和合同中预先评估并管理风险。
- 声明、担保(R&W)和赔偿。在收购合同(“股票购买协议”)中，预先就公司的情况向卖方提供一系列详细的声明和担保，以及在违约情况下的赔偿义务（“商业担保”：财务报表、参考资产负债表、合同、诉讼、环保法规、开展业务的授权、债务、信贷等）。声明和担保的谈判通常通过管理尽职调查的结果来实施（例如：尽职调查引起的争议不包括在声明、担保和赔偿中，各方在确定价格时须予以考虑）。在意大利的股票交易中，关于公司状况的声明和保证（“业务保证”）以及赔偿义务的规定是必要的，因为如果没有这些条款，如果公司的实际情况与购买时考虑的情况不同，买方则无法从卖方那里获得赔款或补偿（除非在极端情况下、极为罕见）。
- 为买方提供担保。保证买方在对方不遵守声明和担保的情况下获得有效补偿（或部分补偿）的工具。 其中包括：（a）延长部分金额的支付；（b）在声明和担保期间，以及在发生争议到确定争议的阶段，以信托保证金（“托管”）的形式支付部分金额； （c）银行担保； （d）W＆I保单，即涵盖在违反声明和担保的情况下买方所承担风险的最高赔偿额（特定风险除外）的保险合同。
其他影响股票交易和资产交易选择的因素
当然，通过股票交易或资产交易在意大利进行收购交易的选择，也取决于交易的税收成本以外的其他因素。以下是一些情况：
- 购买部分业务。 当资产交易不涉及卖方整个公司的购买而仅涉及其一部分（公司分支机构）时，则选择资产交易。
- 问题公司的状况。当目标公司的状况非常棘手，买方无法承担所有来自公司先前管理的风险时，就选择资产交易。
- 保留卖方的角色。当你想让卖方在被收购的公司中占有一席之地时，你可以选择股票交易。在这种情况下，除了在管理中发挥作用外，卖方通常会持有少数股份，并在一定时间后拥有退出条款（出售权和认购权）。这些条款通常将价格与未来的结果联系起来，因此，从买方的利益出发，可以激励卖方发挥管理作用；从卖方的利益出发，可以增强购买时未实现的利润前景。
Belgian residents working abroad, e.g. in Luxembourg, may have a company car registered in their country of employment. The Belgian regional tax administrations exercise checks to verify whether the user of the company car complies with regional vehicle tax rules allowing an exemption from registration of the car in Belgium and from Belgian vehicle taxes. Especially in the Walloon Region this has given rise to a lot of litigation in recent years, especially regarding Luxembourg workers residing in Belgium.
Belgian vehicle registration rules stipulate that the user of the car must have on board of the car a copy of his employment contract as well as a document drawn up by the foreign employer showing that the latter had put the vehicle at the employee’s disposal. If the driver cannot produce these documents, he is supposed by the Walloon tax administration to have violated the legal obligation to register the car in Belgium and to pay Belgian vehicle taxes.
The consequences are severe. In addition to the vehicle taxes, the driver must pay a hefty fine. Failing to pay these large amounts (often more than EUR 3,000.-) on site at the time of the road check, the authorities withhold the on-board documents of the car, which results in the immobilization of the car.
The Walloon tax administration, initially, did not pay back the vehicle taxes even if it was proven afterwards that the conditions of the exemptions of registration in Belgium and Belgian vehicle taxes were met. At first, the tax administration claimed that the vehicle taxes remained due if the employee showed the required documents only afterwards to the competent authorities. The position of the Walloon tax administration was that the employee must be able to produce the required documents on the spot during the check to be exempted from registration and vehicle taxes in Belgium.
In a recent reasoned order, the European Court of Justice (‘ECJ’) confirmed that this harsh position by the Walloon tax administration was in violation of the freedom of movement for workers. A reasoned order is issued by the ECJ a.o. where a question referred to the ECJ for a preliminary ruling is identical to a question on which the ECJ has previously ruled or where the answer to the question referred for a preliminary ruling admits of no reasonable doubt.
In other words, the ECJ confirms that the requirement to have the abovementioned documents permanently on board of the vehicle to be exempted from Belgian registration and Belgian vehicle taxes is manifestly disproportionate and thus a violation of the freedom of movement for workers.
From a practical perspective, this ruling confirms that an employee resident in Belgium but working in another member state does not have to pay the Belgian vehicle taxes (or is entitled to be paid back) if he demonstrates after the check that he met the conditions to be exempted from registration and vehicle taxes in Belgium.
The legal form of a GmbH (limited liability company) is very popular in Germany and is also one of the most frequently chosen forms of market entry for foreign investors. Its establishment is relatively simple and quick, the GmbH offers shareholders the desired limitation of liability and enjoys a high reputation in business relations, both in Germany and abroad. The statutory minimum share capital of 25,000 euros documents a certain seriousness and is intended to protect creditors.
However, the opening of a German bank account to which the shareholders are to pay their capital contributions is usually a factual problem when setting up a GmbH; the capital stock must be provided before the company is registered in the German commercial register. On the one hand, it is not uncommon for German financial institutions to refuse to open accounts to foreign shareholders per se. On the other hand, it is almost standard today that the opening of a bank account for a new company in which foreign shareholders are to hold shares can take several weeks for various internal bank reasons. In practice, this means that the entry of the company in the commercial register can be suspended for several weeks or even months. Valuable time is lost, especially if you are about to start a project in Germany and everything is already prepared.
Do you have to accept this unnecessary delay? No, not at all.
There is a much faster and more acceptable way.
A bank account is not required for the establishment of a GmbH. The German corporate law does not provide for this either. In practice, however, it has become common to open an account directly when a company is established. Of course, this only makes sense if the account is opened quickly and immediately. If, however, it is foreseeable in advance that there might be problems opening an account with a German bank, a different procedure is recommended.
The managing director of the newly established GmbH (he is usually already appointed during the notarial establishment of the company) has to assure in the registration of the new company to the commercial register that the capital contributions are in the free and unrestricted disposal of the management. The law does not stipulate that this can only take place if the payment is made to a bank account of the GmbH. It is also possible and permissible for the managing director to opens a company cash box (cash register) in which the shareholders hand over the capital contributions in cash and the managing director notes the payment in the cash book. A copy of the cash book or a confirmation of the managing director can be handed over to the notary as proof of the payment, who then also forwards this copy to the commercial register.
In the incorporation practice and experience of the author, this procedure has so far been accepted by the commercial registers without objection. All GmbHs founded in this way were successfully registered.
The author of this post is Dominik Wagner.
A legal due diligence of a Brazilian target company should analyze the existence and the content of Agency Agreements, including values paid to the agent and the nature of such payments and the factual situation of the target’s agents, in order to evaluate potential contingencies.
One usual suspect in legal due diligences of Brazilian target companies in M&A transactions that should not be overlooked is the existence of agency agreements, due to:
- the obligation to indemnify the agent stipulated by law: at least 1/12th of all commissions paid throughout the entire term of the agency agreement; and
- the risks for the agency being disregarded and considered as an employment relationship, subjecting the principal to compensate the agent as an employee with all rights, benefits, taxes and social contributions.
This should be considered for evaluation of potential contingencies and the impacts on the valuation of the target.
No doubt that agents can be an important component of the sales force of the business and can be strategic for the activity of the principal, in view of a certain independence and for not increasing the payroll of a company.
On the other hand, under Brazilian laws, the protective nature of the agency demands the principal a considerable level of attention.
Indemnification
Brazilian Federal Law No. 4,886/65 as amended – the Brazilian Agency Law – determines that the agent is entitled to, at the termination of an agency agreement, receive an indemnification of 1/12th calculated over all the commissions paid throughout the duration of the entire period of the agency agreement.
The Brazilian Agency Law stipulates that if the parties sign a new contract within 6 months after the expiration of the previous, the relation between agent and principal shall be deemed as the same relationship and thus, the duration to calculate the indemnification shall encompass the entire period (past and subsequent contract).
Termination by the agent
The Brazilian Agency Law also stipulates situations that agent could terminate the contract and still be entitled to receive the 1/12th indemnification:
- reduction of the activities in disagreement with the contractual stipulation
- breach of exclusivity (territory and/or products), if so stipulated in the agreement
- determination of prices that makes the agency unfeasible and
- default on payment of the commissions
- force majeure
Termination without cause
Termination without cause can be done, upon payment to agent of the indemnification and with a previous notice of at least 30 days, in which situation the agent shall receive the payment of 1/3 of the remuneration received during the previous 90 days prior to the termination.
Can principal avoid the indemnification?
The only cases where the 1/12th indemnification would not be applicable are when the contract is terminated by principal with cause. The Brazilian Agency Law has limited situations for principal to terminate the contract with cause:
- acts by agent causing disrepute of the principal
- breach of obligations related to the agency activities
- criminal conviction related to honor, reputation
These situations shall be clearly demonstrated. Producing the sufficiently strong evidence of the facts to configure cause for termination may not be an easy task, considering some of the facts may be subject to construing and interpreting by the parties, witnesses and ultimately the judge.
As a result, from past experiences, it is rare to see principals in conditions not to incur in the 1/12th indemnification.
Potential risk: configuring employment relationship
In addition to the indemnification, the activities developed by the agent could eventually be deemed as performed by a regular employee of the principal and, in this case, principal could be subject to compensate the agent as an employee.
Agent vs. employee
For the appreciation of the employment relationship, the individual acting as agent shall file a labor claim and demonstrate the existence of the employment relationship.
The Labor Court judge will consider the factual situation, prevailing upon the written agreements or other formal documents. The judge may rely on e-mails, witnesses and other evidence.
The elements of an employment relationship are:
- Individual: in case the individual acts by himself to perform the services; Personal services: the services are in fact performed by the individual specifically to the Principal;;
- Non-eventuality – exclusivity: the services are rendered in a regular basis;
- Subordination: key factor – the individual has to follow strict instructions directed by principal, such as reporting to an employee of the principal, determined visits;
- Rewarding – fixed remuneration: the individual is awarded regular amounts and expenses allowances
In the event the individual can demonstrate the existence of the elements to configure an employment relationship, he/she could have an award to entitle him/her to have his remuneration considered as of a regular employee for the last 5 years.
As a result, the individual would be awarded the payment of Christmas bonus (equivalent to 1 monthly remuneration per year), vacation allowance (1/3 of a monthly remuneration per year), unemployment guarantee fund (1 monthly remuneration per year) plus other benefits that he/she would be given as an employee of principal (based on the collective bargaining agreement between the employees’ and employers’ unions). The company would also be obliged to make the payment of the co-related social security contributions.
Needless to say, the result could turn into a considerable potential contingency.
The author of this article is Paulo Yamaguchi
The sale and purchase of agricultural land under Polish law have been recurrently amended over the past few years.
For the most part legal provisions aim to protect the country’s food resources as well as to be self-sustained and independent from foreign food suppliers. Agriculture is considered to be one of the decisive economic branches and it’s the Lawmaker’s according belief that it should be accurately regulated. Consequently, the sale and purchase of land which may be used for farming are subject to various limitations, as well as the sale and purchase of company shares or business assets (fonds de commerce) holding such land.
This topic, therefore, is crucial to foreign investors. In this article, I would like to highlight some key points which should be taken into account by foreign investors in setting up a joint venture with a Polish counterpart owning a real estate or acquiring shares in an already existing entity that owns a real estate. These situations are very frequent and the legal risks related to the agricultural land cannot be neglected.
Agricultural land is defined as any land which is qualified as such in the zoning regulation. The agricultural character subsists not only when the real estate is already utilized for agricultural purposes but also if such use is merely potential. Here arises the first issue: it is a matter of facts, not law whether such utilization is conceivable and often arguable.
One may imagine a plot of land which is not used for farming at the moment but still suitable to be used in such a way in the future. Such a real estate will be subject to the legal limitations and the sale and purchase of it offer a significant legal and commercial issue. This pertains green fields in the outskirts of a city which are generally marked as agricultural land under the zoning plan and form an ideal target for investors who wish to construct a production facility (e.g. factory), warehouse or start a business far from farming. Except if planning the construction of residential buildings they will have to face severe legal requirements.
Another point is that in Poland not every region has a zoning plan. Often there is none and the legal character of a given land has to be determined on the basis of other sources; such as a land register or a general concept of zoning plan adopted by a single municipality. Oftentimes the data arising from the two sources are contradictory.
Issue concerns only out of city real estate
The upside is that these strict regulations do not apply to agricultural land situated within the administrative city limits.
Minimum surface: 1 ha and 5 ha
The statutory limitations apply only in case if the land exceeds a certain surface.
For share deals (transactions where the shares in a company or rights in a partnership are transferred) the minimum surface required is 5 ha. If a company or a partnership owns an agricultural land below 5 ha the share deal can be done without further complications.
For asset deals (simple transactions resulting in a transfer of land property) the relevant figure is 1 ha (see below).
Transfer of land
The transfer of agricultural land having a surface exceeding 1 ha to a non-farmer, requires the approval of the State. This is given through an administrative decision.
If the surface is less than 1 ha, transfer approval is not mandatory, but the State has a right of first refusal with respect to such land. As mentioned earlier, these rules do not apply to the real estate situated within the cities.
For these reasons an asset deal in Poland may produce complications.
Transfer of shares in a capital company
The share deals are comparatively easier, even if the company owns an agricultural real estate. They do not require the approval of the State.
However, the State has a right of first refusal with respect to shares in a company (limited liability company or joint stock company) which owns an agricultural land having a surface of at least 5 ha. It has a right to examine the company’s papers and books as well as to request data from the company in order to establish the legal and financial state of the real estate.
The shares owner can only enter into a conditional share sale and purchase agreement with a third party. Such an agreement is conditioned by the mentioned right to a first refusal within a statutory time period of 1 (one) month. However, there is a very important deviation from the regular right of first refusal. If the State considers the contractual price does not meet the market value of the shares it may demand that the share price which the State itself will pay is set by a court. Such price revision does not extend to regular share deals or asset deals. And therein we see the significant risk for the seller.
Transfer of shares in a partnership and accession of a new member
Different rules apply if the sale and purchase agreements relating to the rights in a partnership (general partnership, limited partnership, a partnership limited by shares or professional partnership) owning an agricultural land of at least 5 ha surface.
In such a case, if a current member transfers his/her rights to a third party or a new member adheres, the company is obliged to inform the State of such transfer or adhesion. Subsequently, the State has a right take over the property of the land and to set a price for it unilaterally. Such a price should reflect the market value of the concerned real estate. However, in many cases, the partnership may find the price too low and wishes to challenge it. The partnership thus has to go to court asking for a price revision.
Real estate or shares in a company or a partnership as a non-cash contribution
It is not possible to avoid the above complications if instead of selling the shares or a real estate we transfer them to a purchaser through a different legal act. For example, one may wish to confer it as a non-cash contribution to a different company, exchange it for some other asset or donate it to a third party.
In those cases, very strict rules apply too. The State may take over respectively the land or the shares. The State sets the price unilaterally. The land- or shareowner may challenge the price in court but he has to apply within 1 month from take-over.
Mergers, divisions, and transformations of companies and partnerships
The right to take over the property of a real estate applies similarly to mergers, transformations, and divisions of companies and partnerships. There is a significant legal and financial risk connected to this kind of M&A.
Null and void agreements
If an agreement related to a transfer of land, shares in a company or rights in a partnership does not match all legal requirements it is null and void. In such a case the Buyer does not acquire the rights for which he/she has paid. The value of the real estate in question or importance for the company’s business is irrelevant. Even if the entity owns a relatively small real estate which currently is useless but potentially may be used for agricultural purposes and it is not properly identified within the due diligence process – this may trigger the invalidity of the whole transaction.
Be careful!
For the above reasons the buyer craving to purchase shares in Polish companies or partnerships should carefully investigate if his/her target entity is an owner of any real estate and – if so – what legal status of it might be. If it turns out that the entity owns an agricultural land of at least 1 ha then the share sale and purchase transaction should be performed very carefully and by specialized lawyers. If the relevant procedures are omitted the current share owner may lose the ownership of the shares and the intended purchaser may lose money in case the irregularity is discovered later on, when e.g. the seller gets insolvent, has been liquidated or simply disappeared.
After the transition period, in the last 10 years, the Republic of Serbia has become a stable and well organized society. The stable government, the status of the candidate country for the EU membership, as well as the traditionally well-balanced relations with both the East and the West, have led Serbia to become an increasingly interesting investment opportunity for both domestic, and foreign investors (total production increased of 2.3% from January to September 2018).
Legal framework and tax benefits
Being on the road to the EU membership, the Republic of Serbia has already begun to harmonise its legislation with the EU acquis communautaire, opening its market to foreign investments and striving to follow the current markets trends. On the other side, relationships with China and Russia are also traditionally exceptional good and cooperative.
In line with the aforementioned, the Serbian government seeks to attract as many foreign investors as possible, primarily by providing significant tax benefits, such as: reduced burden on earnings up to 75%, temporary tax exemption of the corporate profits, avoidance of double taxation, possibility of duty-free imports of raw materials and semi-finished products, duty-free imports of machines and equipment, as well as many other benefits.
Setting-up a company
Before presenting a short guidance on setting up a company in Serbia, it is notable to highlight that companies in Serbia can be established by any natural or legal person, both domestic citizens and non-residents. Therefore, the following basic rules of establishment could be of interest for the foreign readers.
Serbian Company Law recognizes four types of companies: Joint Stock Company, Limited Partnership, Partnership and Limited Liability Company. In this post we will focus on the latter, describing in a few lines the process of establishing a LLC (in Serbian: Društvo sa ograničenom odgovornošću – DOO) in Serbia.
A LLC is a company that is established by one or more legal and/or natural persons (which are the members of the company), for the purpose of performing a particular business under a common business name. Regardless of whether the LLC is owned by one or more member, remains, however, an entity separate from its members and liable for its obligations only with its assets.
The basic conditions that a LLC must fulfil in order to be able to submit a proper registration to the Business Registers Agency are:
- Incorporation act: Memorandum of association, in case of a multi-member LLC / Decision on incorporation in case of a one-member LLC;
- Business Name (in Serbian language in Cyrillic or Latin letters);
- Appointment of the legal representative of the company, i.e. the director;
- In Serbian law, contributions can be monetary or non-monetary (contributions in kind), including contributions in work and services. The minimum subscribed capital (monetary or non-monetary) is 100.00 RSD (equivalent to 1 euro). At the moment of establishment of the LLC, the contributions do not have to be paid in. In such case, the member of the company is obliged to determine the deadline for payment of the contributions, in accordance with the Incorporation Act. The deadline cannot be longer than 5 years after the foundation of the company.
When the aforementioned basic conditions are met, the incorporation procedure continues as follows:
- Registration of the company at the Business Registers Agency. The deadline for submission of the application is 15 days after the date of adoption of the incorporation act. When registered, the company obtains: (i) Registration number (in Serbian: Matični broj (MB)); (ii) Tax Identification Number (in Serbian: Poreski identifikacioni broj (PIB)); and (iii) Health insurance number issued by the Republic Health Insurance Institute.
- Opening a company bank account.
- Registration in the Tax Administration.
- Digital signature (optional).
- Company seal (optional).
The author of this post is Dragan Nikolic.
Each country has its approach and practice on doing business. In Latvia the two most popular forms of running a business are – limited liability company and joint stock company. Establishment of a legal entity is simple, fast and proportionate in costs. A limited liability company can be established with a minimum share capital of EUR 1,00, subject to compliance with certain requirements; whereas share capital of a full-scale limited liability company is EUR 2.800,00. For a joint stock company a share capital of at least EUR 35.000,00 is required.
Types of the companies and their specifics
Limited liability company
The limited liability company (LLC) is one of the most popular corporate structures used in Latvia. A LLC is a private company, the shares of which are not publicly tradable.
In parallel to the LLC, there is also micro-capital LLC permitted with the decreased requirement for the share capital, starting from EUR1. Micro-capital LLC has certain limitations to comply with, inter alia:
- it can have no more than 5 founders (shareholders) all of them being individuals;
- any member of the Board of Directors must also be a shareholder of the company; and
- one person can be a shareholder in only one micro-capital company at a time. A micro-capital LLC is mostly used for business activities of a small scale and start-ups.
When it comes to establishing a LLC the main criteria are:
- any amount of founders (shareholders), no nationality criteria, both individuals and legal entities permitted. For a micro-capital LLC – not more than 5 individuals;
- share capital – minimum of EUR 2.800,00. For a micro-capital LLC, share capital can be any in a range from EUR 1,00 to EUR 2.800,00;
- for a regular LLC, the share capital can be paid up either by financial means or investment in kind;
- the Board of Directors of a LLC must consist of at least one member. The same requirement is applicable to micro-capital LLCs.
The composition of shareholders and any changes in relation thereto are notified to the Company Register (Commercial Register), which is a public register.
The management structure of the LLC consists of the Board of Directors, Supervisory Board (if any) and Shareholder Meeting.
Joint stock company
A joint stock company (JSC) is a public company, the shares (stock) of which may be publicly tradable.
The main criteria for establishment of a JSC:
- any amount of founders, no national criteria;
- share capital at least EUR 35.000,00;
- share capital can be paid up either by financial means or investment in kind;
- the Board of Directors shall consist of at least one member. If the stock of the JSC is publicly traded – at least 3 members.
The management structure of the JSC consists of the Board of Directors, Supervisory Board and Shareholder Meeting.
When it comes to differences between LLC and JSC it shall be noted that shareholder register in a JSC is an internal document of the company; whereas in respect to LLC all shareholders are showed in the public data base of the Company Register (Commercial Register).
Registration process – must know tips
Registration of a company in Latvia involves necessity to submit more or less same documents as in any other country, like application for registration, decision or agreement on incorporation and articles of association. However there are few specific aspects to be taken into account.
Name of the company
Before applying for registration, first check whether the name desired is available – both in trade mark register and data base of the Company Register (Commercial Register).
Please also note that there are certain local requirements on the company names, inter alia:
- Latvian or Latin letters to be used solely;
- it is permitted to use only symbols like – &, @, %, +, =;
- it is prohibited to include in the name words “Republic of Latvia”.
Share capital
For micro-capital LLC payment of the share capital must be performed in full before applying for registration of the company. In its turn for a regular LLC the share capital must be paid up in amount of at least 50% and for a JSC in amount of 25%.
Payment of the share capital always involves opening a temporary account in a local bank.
In case share capital is in some part covered by investment in kind, it should be noted that evaluation of a certificated expert of such investment may be required.
Address
The Board of the company must ensure receipt of correspondence at the company’s registered office. While there is a practice to use virtual offices, though in each case it must be evaluated whether such address will be sufficient for the operation of the company.
Moreover:
- each desired address must be checked in official state address data base (kadastrs.lv) to indicate the address correctly in the registration documents;
- only premises or building can be used as registered office but not a property consisting only of a land;
- written consent of the owner of the real estate used as address will be required for registration of the company.
Document signing
It must be noted that certain documents related to registration of the company will require approval of notary public and legalization (Apostille). Documents can be bilingual; however always one language must be Latvian.
Registration
A company will be registered within 1-3 working days.
If concurrently applied also registration with tax administration (State Revenue Service) can be very fast made.
State fees for registration are reasonable, but it should be noted that additional expenses like for assistance of a lawyer, notary fees or translation expenses will come on the top.
Taxation
Each of these corporate structures is full-scale taxpayers in Latvia. They are subject to corporate income tax at a rate of 20% divided by ratio 0.8, such ratio being applied for the calculation of the gross taxable base out of net paid dividends (so practically a rate of 25% is applied). Once the value of services provided or goods supplied within last 12 months exceeds EUR 40.000,00, a company shall be registered with the Value Added Taxpayer’s Register of the State Revenue Service.
From an income tax perspective, small companies corresponding to certain statutory criteria (like micro- capital LLCs) may also apply for a micro-enterprise tax payer status, which is applied to turnover per taxation period of a micro-enterprise. The rate of micro-enterprise tax applied is 15% subject to adjustments in specific cases provided for by the law.
As regards tax reporting, since 2018 the annual report on income is cancelled. Tax payers shall submit a return and pay the corporate income tax each month by the 20th day of the following month. Taxpayers who have a taxation period of a quarter shall submit a tax return and pay tax every quarter by the 20th day of the month following the relevant quarter. With respect to value added tax, the annual tax return shall be submitted by May 1 of the year following the taxation period. Micro-enterprise tax payers have special reporting rules.
It shall be also noted that in Latvia companies have a statutorily designated possibility to halt and restore their economic activity. Activity can be halted for up to 3 years, and during this period, as a general rule, the company shall be subject to regular tax reporting duties.
It shall be noted that information provided in this article covers only general lines of the requirements and processes, therefore it is advised to contact an experts and seek advice to run the processes properly.