05.01.2013
In the end of July 2012 the Law Firm proposed to its client to consider a cross-border merger as an option for restructuring of its business situated in several EU countries.
We structured, advised and drafted all legal documents for transformation involving a Bulgarian legal entity and a Cypriot legal entity. This merger was based on provisions of EU Directive 2005/56/EC of the European Parliament and of the Council (“the Directive”) that are implemented in the Bulgarian Commerce Act as well as in the relevant Cypriot legislation. The provisions of the Directive were transposed in Bulgarian law in 2007. Since then there have been only few cross-border mergers and only 2 of them with merger from a Bulgarian company to a company from another member state country.
The process consists of 4 phases:
1. Preparation of corporate documents, obtaining a permission certificate by the National Revenue Agency of Bulgaria, tax consulting.
2. Announcing a Common Transformation Terms with the relevant authorities in Bulgaria and Cyprus.
3. Obtaining a Certificate of Legality by the Bulgarian Commercial Register in the event of company transformation known in the EU legislations as Pre-merger Certificate under article 10 of the Directive.
4. Ceasing of the Bulgarian legal entity and final deletion from with the Bulgarian Commercial Register.
In December 2012 the cross-border merger was officially completed in both Bulgaria and Cyprus.
With the successful completion of the cross border merger in less than 4 months we met the time expectations of the client as well as we established consistent and highly professional practice for future mergers of such kind.
The involvement of four countries in the work process was an important part of the project. Each decision and step was discussed and resolved by mutual understanding and cooperation with tax and legal consultants situated across Europe and beyond.
Having in mind the tight time limits set by the client the whole process was very intensive.
During the cross-border merger we consulted on regular basis any tax issues that arose as its result.
For more information about the procedure and any legal advice required, please contact us at office@ivlawfirm.com.
